If you're wondering whether you should run a background check on a tenant, the simple answer is yes. The better question is: how to do it right?
See, a good background check must be thorough. You'll need to look at their credit, criminal, rental, and employment history. Each of these categories could reveal red flags that indicate a tenant is a bad fit for your rental.
Need some help with conducting a tenant background check in Grisham, OR? Here's what this process should look like and how to do it justice.
Get Written Consent
In Oregon, the first step of any screening procedure is to get consent from the tenant. You can have the consent form be part of the application form.
The consent form should contain a statement about your intent to run a background check. You should also let the tenant know what this check will involve, as well as their rights regarding this process.
Gather a Tenant's Information
Once you've obtained written consent, it's time to start gathering tenant information. To do that, however, you'll first need some specific details.
In general, the best way to learn more about your applicant is via a rental application. This allows you to get their name, date of birth, current address, and Social Security number. That's all you need to get started!
Run Background Checks
The next step of this part of the rental process is to run the actual checks. Here's a short list of the things you need to pay attention to.
An applicant's credit history will help determine if they can pay rent on time. Look for negative marks like unpaid debts, late payments, or bankruptcies. You can run a credit check through any major credit bureau.
The 30% rule says that a tenant shouldn't spend more than 30% of their income on rent. Their employment history is a solid indicator they can afford your rent prices. Look for gaps in employment or job history inconsistencies.
You can get an applicant's criminal history through a consumer reporting agency (CRA). Pay attention to arrests and other legal considerations, but don't base your decision to accept a tenant solely on their record.
Rental history can tell you a lot about an applicant's ability to care for your property. Did they have any evictions or broken lease incidents in the past? You can get this information from their previous landlords.
Verify Received Information
The best way to ensure your background check provides accurate information is to use a screening service. Otherwise, it never hurts to verify.
For instance, let's say you notice a gap in the applicant's employment. In this case, check in with their current employer. Depending on their perspective, you may want to decide to ask for additional bank statements.
Tenant Background Check Made Easy
Even with all the above steps, a tenant background check usually won't take too long. If you follow this guide, you can get everything done within days.
Not sure how to access some of the information outlined above? If you live in Grisham, consider outsourcing your background checks to Kerr Properties! Contact us here to learn more about our tenant screening services.