Rental properties can be a very lucrative business and property owners stand to gain financially from both rent paid and property appreciation. The problem arises as tenants go bad and damage your property, refuse to pay rent, and ultimately refuse to vacate the premises. To limit the potential of selecting a bad tenant, you’ll need to properly research your applicants.
Contact your local housing rental authority and see if they have any standard application forms that you can use for every applicant. If they do not have the information and cannot point you in the right direction you can either shell out a large chunk of cash to a real estate attorney or create the forms yourself with a bit of internet research. The forms should be the same for every prospective tenant and should collect all the vital information you need regarding the person and their living situation. You’ll also want to get them to authorize, by signature, you to search their backgrounds a bit and to gather their credit report.
Now, you can either do the background check yourself, or you can hire a company to perform this search for you. It can be an involved process and hiring an outside agency, especially if you have many rental units, can be well worth the added expense. You can have this company also get the person’s credit check or you can take care of that yourself.
Make sure that you research the listed references and previous landlords as this information can be absolutely invaluable.
There is no excuse for skipping any of the due diligence in this matter as a bad tenant can end up costing you thousands and may tie you up in court for years.