The Important of a Checking a Tenant’s Credit Report
Renting out a property can be a lucrative opportunity for you. Not only is it a great secondary source of income, but if you hire a management company to take care of all of the work, you can basically sit back and enjoy the extra cash flow. One thing that is important to note though is that there is a chance you’ll come across some issues with your tenant’s monthly payments. It’s extremely common as financial emergencies do happen with people – but it’s obviously not acceptable if it’s a consistent pattern. If you want to minimize the chances that the latter would happen, it’s best that you run a credit check on each potential client and thoroughly review each detail. The two main priorities on an application that you should focus on are the criminal history and the credit report. Each one gives you an idea of how qualified your tenant is. There are multiple low cost tenant verification services available online, if you prefer to do it yourself. After receiving a pass from the tenant screening services company, you can focus on their credit. Since you set the bar for what their credit score should be in order for them to move in, you can designate a range in which their credit must fall in, in order for them to proceed with the application process. On a credit report, look for things like: late payments, bankruptcy issues, and debt. These figures are important because you’ll most likely get a sense of how their finances are as well as their ability to make payments on time. If you hire a property manager, you’re going to have to regularly pay them. If your tenants fall behind on rent, it’ll only put more financial stress on you especially when the costs of running the property begin to add up. High credit scores tend to be less a risky option for you. But don’t completely rely on the credit score itself. The number won’t indicate whether or not your tenants are going to cause trouble or get along with their neighbors. An application will only paint ¾ of the picture. It’s essential to run a credit check on an applicant. Not only will it verify their ability to pay on time, but also the fact that they’ll actually be able to afford your monthly rent. As a landlord, you need to take on the responsibility of managing your finances correctly and with a smooth-running operation; you’ll be able to enjoy the luxuries of owning real estate rather than stressing out.
Tenant Screening Services, LLC has been performing background checks for landlords and employers for more than 29 years. If you are in need of a landlord credit check, visit their website today for more information.