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Tenant Background Checks!

At some time or other, most landlords will experience some kind of problem with a tenancyit’s just the nature of the game! We hope serious tenant and tenancy problems don’t happen to you but they might, so you need to know what do you do to prevent potential problems in the first place.  Whilst the risks cannot be completely eliminated, it makes sense to use all the tools at your disposal to reduce those risks as much as you can, and to give yourself an understanding of the person or persons you are just about to grant a tenancy to.

A tenant background check is what every landlord needs before they grant a tenancy, but do landlords need to spend hard money on a tenant background check or are there ways of making an assessment of the tenant before committing to purchasing tenant background checks ? 

A Tenant Background Check is the “process of looking up public records, and commercially available records as well as the financial records about a particular person. Usually, a Background Check is a process  normally undertaken when someone applies for a finance, maybe a mortgage or a loan and in these circumstances, background checks are normally mandatory.

A Tenant Check for a landlord is not normally as in depth as one for Bank or Mortgage Lender but never the less provides sufficient information for a landlord who is keen to be certain that a potential tenant has no bad credit history or no eviction history.

Tenant Background checks are important because they allow the landlord to be more informed about potential risks of a tenant. However, there are ways of assessing a potential tenant before entering into the formalities of a tenant background check and here are just a few tips from OneLandlord.com

Gut Feeling

As the landlord, you will likely meet the person who is going to rent your property from you, good old fashioned “gut feeling” is about as good as any other barometer for initially assessing the potential of a tenant. True, it’s not going to give you information about their background, but you will be able to work out pretty quickly if you are happy to rent your property out to this person or persons. If you are happy with what you see and hear from them, you can move to the next step and arrange formal background checks.

Social Media:

Today, most people live their lives on Social Media and the information they put out there is normally in the public domain, so it’s really easy to find and it can give a great insight into someone’s life style, and the kind of person they are.  It never ceases to amaze us what people will put on Social Media and what you see in person may not be the same person who appears on Social Media, and what they tell you to your face, may not be the same as they reveal on Social Media. We think that Social Media is one of the best ways to find more about potential tenants and whether they are who they say they are!

Google Search:

A Google Search of the persons name can reveal a great deal about someone, even news events and press publications can be found easily with the help of a Google Search. In the past, we have uncovered serious criminals from a simple Google Search, revealing things which no Tenant Background Checks could have ever revealed!

On Line Tenancy Application

At OneLandlord.com, we have created a unique on-line tenancy application which helps landlords assess the suitability of a prospective tenant. The Application will check for certain information revealed by the prospective tenant and will inform you if there are any concerns. It won’t make a formal assessment or approval, only you can do that, but what it will do is highlight points which you may not otherwise consider and it will allow you to either decline the application or proceed to the next stage, which of course is the formal tenant checks, in other words, it will help you filter out non desirables and time wasters before you spend any money on background checks.

Tenant Background Checks

The types of Tenant Background check you may need, depends on how deep you wish to dig and about the minimum information you need, these could include:

Credit Check – Address Verification
Credit Score –
ID Check
Right To Rent Checks
Employment References
Landlord or Lender Reference

The bare minimum should be a basic credit check, but we believe that it’s always worthwhile putting calls into employers and landords (where applicable), just to find out as much as you can about your prospective tenants.

What You Should Be Careful Of !

Most landlords are trusting, some might even say naive and this can be damaging!  What we say is that you should take a step back from your normal trusting nature and make an assessment based on the fact that despite how nice your prospective tenants may appear, you don’t know them. This is simply our experience, but we suggest that you be suspicious of anyone who is not listed on the Voters Roll, especially if they cannot be traced at all, or if they have not been on the Voters Roll for some time. It is not illegal not to be on the Voters Roll, and it’s certainly not uncommon, but it is also quite common not to show on a Voters Roll search when someone is trying to hide an address for some reason, maybe because they have bad debt or even an eviction at the previous address.

In circumstances where a person is not listed on the voters roll, you must insist on some form of proof of residency (POR), such as bank statements, utility or council tax bills or other official documents, but never ever accept personal mail!  You should also try to obtain proof of residency for the period that they have said they live where they live, not just for a snap shot month or week. For example, let’s say that a prospective tenant has stated that they live at an address and have lived there since 2015, a search does not show them listed on the Voters Roll, so as a bare minimum, you need them to prove that they actually do live there and that proof should be one item of proof from each of the last three years. If they do not come back to you with that proof, then it’s likely they weren’t telling you the truth in the first place!

Bad Debts, CCJ’s etc.

This is a judgement call for you to make, many people have “blips” on their credit file and it does not mean that they are going to be a problem, but if banks and building societies use this information to make an informed assessment of the risk, then you should too, if it’s good enough for them, then it has to be good enough for you!  Don’t simply ditch the prospective tenant because of a poor credit score or a judgement order, there may be a reasonable explanation, but use the information you have available, combined with all the other information you have to make an informed decision. However, where there is a poor credit rating or bad debt showing on someones profile, then the old caveat is very relevant “buyer beware”!

We hope that this article has helped you understand what you need to do to make a reasonable assessment on a Tenant, one final thing we would say is that if you are unsure, or there is a bit of a blip on their credit file, but you feel that you would like to offer them a tenancy, then only do so with the support of a Guarantor or you might regret it later!

OneLandlord.com provides Tenant Background Check to Landlords to find out more, to to www.oneandord.com