Did you know that Ashville was recently rated as the 4th hottest rental market in the US? According to ABC 13, the city scored this high by having 96% of its rental units filled! You must be picky about potential renters when a market has that much demand.
A proper tenant background check protects your investment property and ensures a great landlord-tenant relationship, even in a high-demand market. Read this brief guide to learn which tools to use in your tenant screening process.
Key Components of a Tenant Background Check
Several helpful tools and processes exist to give landlords the information they need for a rental application review. Each provides an insight into a tenant's risk profile, history, or financial abilities.
Credit Checks
A tenant's financial responsibility can show how reliable they are. You can get insight into how willing and able a tenant will be to cover rent and other expenses by referring to information like:
- Credit scores
- Payment histories
- Outstanding debts
- Bankruptcies
While a perfect score isn't essential, consistent financial responsibility is a beneficial trait to have in a tenant.
Income Verification
Verifying income ensures that a tenant can afford the rent. A general rule is that a tenant's income should be at least three times the monthly rent.
Ask for recent pay stubs or tax returns for self-employed applicants. You can also consider contacting employers directly to confirm employment status and income.
Rental History
Contact previous landlords to gain insights into the applicant's rental behavior. Ask about payment punctuality, property upkeep, and any issues during the tenancy.
Criminal Background Checks
Criminal background checks are essential in tenant screening to help ensure the safety of your property and the surrounding community. These checks reveal past offenses that may indicate risky behavior. In North Carolina, a background check is the only way a landlord is allowed to access this information.
However, you aren't simply allowed to discriminate on the basis of prior convictions. You must adhere to federal Fair Housing laws when making your decision. This includes giving people with prior convictions fair consideration in your application process.
Types of Background-Checking Services and Methods
Landlords commonly conduct background checks in one of three ways:
- Using online background check services
- Hiring property managers for services like tenant screening or placement
- Performing the background checks themselves
Doing a background check on your own can be time-consuming and risk non-compliance with the relevant laws. Working with an online service avoids this risk, but you never know if the platforms' databases are complete.
Working with a property manager gives you access to a more comprehensive service. They can screen and place tenants in a manner tailored to the landlord. They can also offer future support with services like lease enforcement and help with evictions.
Find the Best Tenants Today
A tenant background check can be the difference between a year-long profit or loss. Ensure that your background checks are done to a professional standard to avoid financial and legal risks.
For most landlords, the best way to do this is by working with a property manager. At PMI Mountain and Main, our expertise delivers comprehensive background checks and tailored tenant placement, reducing risks and maximizing rental income. If you want to work with the best Asheville property management company, contact us today.
