Being a landlord can be a very lucrative option. in certain areas of the country, landlords will make more than an average wage in the United States.
Texas happens to be the 11th best state for landlords in terms of earnings. On average, they make $70,000 per year, which is almost $20,000 higher than the average national salary.
As profitable as being a landlord is, it also comes with a lot of responsibilities, one of which is conducting a tenant background check for each new tenant or group of tenants.
We'll talk about why this is so important in this article.
Why You Need to Do a Tenant Background Check
A landlord's entire livelihood relies on their tenants, so choosing tenants is very important. A good tenant should be trustworthy and respectful.
They should be willing and able to make rent and keep the property in good working order. To this end, there are certain things you should be looking for.
1. Basic Verification
The first step in conducting a background check is to verify the potential tenant's information. Do they have an ID? Is there any chance it's a fake ID or that they're using someone else's?
Where have they lived? When you call these places, do the landlords, realtors, etc. agree that the person has lived there? Do they still live at the address they claim to live at?
Go through the same process with employers.
2. Credit Score
You should also run a check on the applicant's credit score. A credit score is a measure of how good the person is with money. A high credit score indicates that they have a good history of paying their bills.
Meanwhile, a lower credit score often means they're not great with money, may have a lot of debt, or rack up debt with no intention of paying it back.
This can become a much bigger problem if the tenant becomes a squatter. A squatter is someone who occupies a property they don't own and refuses to leave. There is legal recourse for this in some cases, but it's time-consuming and costly.
3. Criminal Record
This one can be somewhat tricky. Just because somebody committed a crime or had a troubled past doesn't mean they intend to do it again.
Many former criminals have every intention of transitioning back to society, and many struggle with it. For that reason, many people, and even some states are making efforts to expunge the records of some criminals, especially those with minor charges.
That being said, there's also no guarantee that they are trying to turn their lives around. If their criminal record shows recent arrests, caution is advised.
The Importance of Running a Tenant Background Check
A tenant background check is one of the tools a landlord has at their disposal to ensure they don't get swindled. We've talked a bit about what to look for in a background check in this article, but being a landlord involves a lot more than background checks.
If you want to know more about rental property from various perspectives please visit our site. Please contact us if you have any questions or concerns.
