Every landlord dreams of perfect tenants, who take great care of your property, pay rent on time, and stay long-term. A modest real estate portfolio filled with these kinds of tenants means you'll enjoy a reliable stream of passive income. Unfortunately, not all tenants are this dependable.
If you rent to the wrong people, you could face property damage, unpaid rent, and various other expenses. If you get a few of these nightmare tenants at once, your income stream evaporates. Sometimes you could even lose money. Luckily, there's a solution.
By doing an extensive tenant criminal background check, you'll identify those most likely to cause problems. Read on to learn more about why the renter verification process is so crucial.
1: Protect Your Investment
One of the main reasons to go through the background check steps is to ensure renters don't damage your property. If someone has an extensive criminal history, they're much more likely to damage your property than the average person, particularly if they have a history of vandalism or drug-related offenses.
Even if they don't directly cause damage, tenants with a criminal record are more likely to get evicted. Whenever this happens, you'll face various turnover costs. For example, you'll need to pay for:
- Cleaning the property
- Advertising for new tenants
- Doing the tenant screening process for the new applicants
Avoid these expenses and protect your investment by doing an extensive tenant criminal background check.
2: Ensure the Safety of the Community
If you let people with a criminal record stay in your property, you could be putting other residents at risk. When other residents don't feel safe in the neighborhood, they'll likely look for somewhere else to live. If you own multiple units in the area, this affects you directly.
Even if you don't own other local properties, renting to untrustworthy people could still harm your passive income. If the neighborhood gets a reputation for being unsafe, local rental rates will plummet.
3: Avoid Legal Liability Issues
If you rent to a tenant with a known history of violence, and they harm another tenant, you could be held liable. But, if you have proof you did an extensive background check, you can demonstrate you take rental property safety seriously, and you can't be charged with negligence.
You'll also likely find many insurance policies require you to screen applicants. If you fail to do so, you may face increased insurance premiums. In some cases, insurance companies may even refuse to cover you at all.
A tenant criminal background check is Crucial
As you can see, failing to screen your tenants properly is a huge mistake. Without a tenant criminal background check, you risk signing a rental contract with people who'll damage your property and put locals at risk. You may also face problems with the law or your insurance company.
PMI of the Midlands is a locally owned and operated property management company that understands your property is an important investment in your future. We specialize in running comprehensive background checks. If an applicant has any skeletons in the closet, we'll be sure to find them.
Contact us today to learn more about the process.
