They seem like nice people, why do I need to run an application?
Looks can be deceiving!!!
Your rental application should consist of:
- First of all, a current credit report of ALL applicants over the age of 18.
- Landlord reference checks on ALL applicants over the age of 18.
- A current criminal background check on ALL applicants over the age of 18.
- Finally, Income verification of ALL applicants over the age of 18.
A current credit report is like a picture... worth a thousand words! The report will tell you if your applicant is diligent in paying their bills. It will show you that they do not have any past collections with property managers/landlords and/or utility companies. It will also reveal if the applicant has been honest and provided you with all of their past addresses.
Calling all past landlords is time intensive. The general rule of thumb is to look at the 2nd (3rd and 4th ) most current landlord references. A current landlord may give you bogus information to, either, keep the tenant or because the tenant upset them by moving. Really, not everyone is honest... landlords included. Because of privacy laws and the fear of being sued most Landlords will not give you information unless you can fax/email signed authorization from the prospect. Also, you must ask very specific questions. Any ambiguous or broad questions will not be answered.
The credit check may reveal addresses that the applicant did not disclose. A simple search will reveal the owner of that property so you can research a contact method for that person resulting in additional landlord references.
It is nearly impossible to obtain a current criminal history. It can be done but it is expensive and requires appropriate contacts. HUD does limit the use of a criminal background check (you can view HUD’s ruling here ). Still, you can use this information to formulate your decision, only if your Rental Policy Statement is clearly outlined.
You want to know that your tenant can pay their rent right? You may collect pay-stubs, bank statement and/or tax returns but is the applicant still working for that company? Make sure the provided proof of income is the most recent. The applicant could have quit the job. It is imperative to call and verify employment.
Clarity is key... your applicant must be aware of what information you plan to collect and what you will do with that information. You have a duty to inform them of your requirements. The result... the applicant will most likely be able to determine the outcome, as a result saving everyone some time. MOST NOTE WORTHY... the applicant must sign a release for you to collect this information so as you can provide that to your sources.
Obtaining all of this information on one or more applicants takes time. If you interview a property management company or a background screening company that tells you that their application turnaround time is less than 48 hours you need to run the other way. Consequently that you will not get the comprehensive landlord reference check and the complete criminal background check.
To learn more about our tenant screening process call us today.