Tenant screening is one of the most critical steps in the rental process. Without a good tenant screening procedure, you can easily end up with unqualified tenants who can’t pay rent on time or leave your property damaged beyond repair. Unfortunately, evicting such tenants takes more time, money, and effort than it’s worth. So, why not choose quality tenants from the start? Today, we’ll review how to evaluate a prospective tenant’s rental history report and why it’s essential for landlords.
Contents of This Article:
- What Is a Rental History Report?
- Why Is a Rental History Report Important?
- How to Evaluate Rental History Reports
- What If Your Tenant Has No Rental History?
- Choose Qualified Tenants With BMG
What Is a Rental History Report?
Essentially, a rental history report is exactly what it sounds like–a comprehensive summary of a tenant’s previous rental history. These reports typically cover details like past addresses, payment history, evictions, damages, late payments, and other important rental information.
It’s important for landlords and property managers in Washington, DC, to ask prospective tenants for this rental history so they can make an informed decision on whether or not they qualify for a certain rental property. Typically, landlords will pair a rental history report with a rental application to learn more about a prospective tenant’s employment and income, along with running a credit report and background check.
Why Is a Rental History Report Important?
Rental history reports are an essential tool for landlords and property managers. After all, you wouldn’t want just anyone living in your rental property. As such, learning as much as you can about a renter and their habits before signing a lease with them can help save you time, money, and resources.
A rental history report will help you easily spot good vs. worrisome applicants. For instance, it will give you details of past evictions, late payments, or other details that may impact your decision to rent to a particular applicant.
That said, a negative rental history report doesn’t automatically make someone a bad renter. If you feel their report isn’t enough to disqualify them, consider meeting with them to discuss any concerns. After all, people can get evicted for various reasons, and some circumstances are worth hearing out.
Ultimately, rental history reports are important for landlords and property managers because they help filter out potential problem tenants and find applicants that will be ideal for your rental.
How to Evaluate Rental History Reports
The tenant screening process is not one to take lightly. You don’t want to skim through a prospective tenant’s rental application or rental history, even if you’re looking to fill a vacancy quickly. Instead, there are several things you’ll want to look out for, including the following.
- Credit History
- Previous Evictions
- Criminal Background
- Potential Red Flags
- Qualifying Income
Credit History
A tenant’s credit history gives insight into their financial responsibility. As such, you’ll want to look for a tenant with a history of paying their bills on time and managing their credit wisely. On the other hand, if they have a history of late payments, accounts in collections, or bankruptcy filings, you may want to inquire further about those before proceeding with them as a tenant.
Previous Evictions
If you’re looking at a rental history report listing past evictions, you may want to proceed cautiously. Past evictions can indicate a tenant’s failure to fulfill their financial obligations or adhere to the lease agreement. That said, it’s important to look at the reasons for eviction, legal proceedings, and the case outcome. From there, you can use this information to evaluate the risks and make informed decisions on whether or not they’re a viable candidate for your rental property.
Criminal Background
It’s always a good idea to conduct background checks on prospective tenants to assess any criminal history that may pose a risk to the property or other tenants. That said, while minor offenses may not necessarily disqualify a tenant, serious crimes or repeated offenses may raise concerns about safety and liability.
Potential Red Flags
There are several red flags to watch out for during the tenant screening process. For instance, you may notice inconsistencies in the rental application, gaps in employment or rental history, refusal to provide references, or a history of disruptive behavior reported by a previous landlord. These points can indicate that an applicant is untrustworthy or could be an unstable tenant to rent to.
Qualifying Income
Many landlords require tenants to have a steady income that meets a certain threshold relative to the rent amount. For instance, you may require that a tenant makes three times the monthly rent to ensure they can pay the monthly bills and are less likely to default on payments. That said, verification through pay stubs, employment verification, or bank statements helps assess the tenant’s financial stability, allowing you to make a more informed decision.
What If Your Tenant Has No Rental History?
Renting to someone without any rental history may seem daunting, but many college students or other first-time renters may not have any history to show. However, that doesn’t mean they won’t be good renters–you just have to use other methods to vet them. Here are a few things you can do during the tenant screening process to learn more about a prospective renter without a rental history.
- Require a Co-Signer- One option is to require a co-signer, also known as a guarantor. A co-signer is typically a financially stable individual, like a parent or guardian, who agrees to pay the rent if the tenant fails to. This can help ease any concerns or risks associated with renting to someone without a rental history.
- Ask for References- Even if tenants lack rental history, they likely have personal or professional references that can speak to their character and reliability. Don’t be afraid to ask for references–and actually contact them. You’ll want to look for reliable references like employers, professors, or other professionals who will give you a fair idea of the tenant’s ability to fulfill their obligations.
- Request Proof of Employment- Verifying a prospective tenant’s employment status and income can help assess their ability to afford the rent and maintain financial stability. You can request pay stubs and employment verification letters or contact their employer if they’re listed as a reference. If they’re not actually employed or have major gaps in their employment history, it could indicate that they don’t have a stable income and may have trouble paying rent.
Choose Qualified Tenants With BMG
If you own rental properties, you know how important it is to find qualified tenants who are reliable and respectful. Part of finding good tenants is having a thorough tenant screening process. As such, it’s important to run through a tenant’s rental history report. That way, you can check with previous landlords to see what they’re like as renters.
Need More Advice? contact us today!
If you’re looking to tighten up your rental screening process and find better tenants for your properties, look no further than BMG. Bay Property Management Group is a full-service rental management company that can help you throughout every rental process. From tenant screening to maintenance, rent collection, and more–we do it all. Contact us today to learn more about our services throughout Baltimore, Philadelphia, Northern Virginia, and Washington, DC.
