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Tenant Screening - What You Need To Know

By: Alex De Mostafa

For building owners and property manager's there are few things more devastating than entrusting treasured real estate to residential or commercial tenants who abuse the property or fail to comply with the lease. The repercussions can be expensive, frustrating and time consuming.

What many managers and owners do not understand is that this conduct is habitual. These unreliable tenants usually have a history of similar behavior. In fact, they are relying on property managers and owners not performing their due diligence.

In the deepest, most devastating recession in history, unscrupulous tenants see opportunity. These predators are lurking in many different guises that are designed to endear them to hungry landlords. Once these vultures are in, they are difficult to evict and can find a myriad of ways to damage hard-earned real estate equity. Then again, they can disappear in the middle of the night leaving landlords wondering what just happened.

In cases like this, the owners or property manager simply shake heads, get that sick, empty feeling and wonder how they could make such a mistake... again. It is no secret that this is a tough real estate market. However, there are few things more expensive than bad tenants.

Experienced landlords have learned the hard way. The most stalwart defense against renting to an undesirable tenant is a complete tenant background check. Not only is the procedure a safeguard for the landlord but is protects other building tenants as well. Other tenants do not want Saturday night bashes, police at the door, or other undesirable elements on the premises. Bad tenants chase good tenants away.

Knowledgeable landlords make complete tenant checks mandatory. They assert their intention ahead of time, make sure prospective tenants agree to the check and even make prospect pay for the check. That procedure in itself can discourage the predators.

Landlords owe it to themselves to perform tenant checks for every prospect and should make the practice a part of the application process. A tenant who is unwilling to submit to a background check and unwilling to pay for it, is a tenant the landlord does not want.

A complete tenant check will provide:

- State and Federal criminal background history
- State and Federal court activity
- Sex Offender history
- Bankruptcy filings
- Credit reports
- Social security verification
- Proceedings relative to tenancy
- Background verification

Times are tough and bad things do happen to good people. Occupancy decisions are always difficult. However, uninformed occupancy decisions are foolish. Complete tenant background checks are a reasonably priced alternative. Most landlords today include a $40.00 or $50.00 application fee. That amount more than covers the cost of the complete tenant check and could well save the landlord thousands of dollars in damages.

In addition to assessing the prospect's suitability, the landlord should require:

- Application for Release of Information
- Application and Notification for the Release of Information

Prospects who are reluctant to execute these releases are not prospects. Landlords must be consistent with their application process. There should be no deviations from the tenant's application process. Every person who will occupy the property must complete these forms. Landlords must know the names, social security numbers and last addresses for all persons who will reside in the premises. Then complete tenants background checks should be performed for spouses and all adult children.

Even to experienced property managers, tenant checks can be surprising. Some items may require clarification, while others may suggest outright rejection. The landlord is not obligated to discuss the tenant check with the prospect. The wisest course of action is to simply reject unworthy applicants. In some cases, landlords choose to refund the processing fee, but that practice is not mandated by law.

Complete tenant checks are worthwhile. Most landlords qualify for discounted rates because of the repetitive nature of the use. For a nominal fee, landlords can save time, aggravation and financial loss. Submit all prospects to tenants checks without fail and sleep well at night.

Article Source: http://www.newarticledaily.com

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