Background Screening

The answer is YES, YES, and YES! If you’re only looking at criminal records and a credit report, you’re not getting the whole story. In today’s economy not only are homeowners losing their homes to foreclosure, people who rent are losing their homes to evictions. Lost jobs, medical bills, poor credit decisions and divorce have caused the number of evictions to skyrocket over the past few years. If you’re not looking for eviction records you’re not getting one of the most important pieces of screening information a property owner can use to make an informed rental decision. Someone who has been evicted has given up one of the basic necessities of life, shelter. If you’re not ordering a separate eviction report and rely solely on the credit report for eviction information, you’re missing out on 75% of the evictions filed. The only eviction records that show up on the credit report are monetary judgments which can take up to 90 days to show up on the credit report. If you’re not getting a...

Many property owners ask for co-signers in situations that involve students with limited income or renters with poor credit. If you ask for a co-signer you will need them to complete a separate agreement that stipulates that they agree to pay rent and damages if the primary tenant fails to pay. Most property owners get into trouble when they make changes to the lease with out the co-signers written approval. This can be adding or deleting a person to the lease. Adding pets to the lease or even renewing the lease if the co-signer does not sign the new lease. How do you avoid problems? Its easy, just make sure you get the co-signers signature every time you make a change to the lease agreement.

If you own rental property in Colorado have you updated your Move-In Move-Out sheet? If you haven’t your opening your company and self up to potential liability. As a property owner or manager you should have a signed Move-In Move-Out sheet for every rental unit that includes this specific verbiage: After inspecting the premises, resident acknowledges that the premises contain no condition constituting or posing a material danger or hazard to resident’s life, health or safety. If you don’t have this form you can download from the Rental Services Website.

Last month we talked about the income of your applicant. I wanted everyone to focus on how important it is to make sure they have enough money to pay the rent. Now that we know they have the money, lets look at the next step in screening your applicant. Yes, it's time to talk about credit. The credit information is valuable if you use it as a part of the overall screening process. The reason we want to look at an applicants' credit is to review their payment patterns. An applicant with poor payment patterns has demonstrated that they are a greater financial risk. When looking at the credit report you should look at the credit score, percentage of delinquencies, collections and bankruptcy records. This information can be used to paint a picture of your applicants' credit worthiness. Make sure you have credit criteria established so you can qualify each applicant using the same standards. If you don't know how to read a credit report, you should look at a scoring model li...

I talk to people about tenant screening on a daily bases and everyone is always concerned about credit information. As a property owner you should really be concerned about the applicants income level. If someone has great credit and makes $3,000 a month they may seem like they would be a good renter, unless of course the rent is $2,800. Living on $200 a month is next to impossible and your applicant will struggle to pay their bills. To decide how much money an applicant needs to qualify to rent your property you need to come up with a rent to income ratio. It's best to establish a ratio as part of your rental criteria so each applicant knows your expectations. The rental housing industry generally uses a 3/1 ratio for income to rent. What this means to you is if the rent is $1,000 the applicant would need to make $3,000 or rent x 3. This is an easy way to make sure your applicant can afford the monthly rent and pay their other bills. You may not believe this but some applicants li...

Rental property owners we work with are having great success using free tools like Craigslist.com. The more successful property owners and managers tell me they use Craigslist along with HTML to add multiple photos and a link to their main website to contact the property and set an appointment. This action demonstrates that your applicant has a real interest in your rental property. Several of the property owners we work with have told us that if the prospect contacts them from their website, they have a higher closing ratio then from other traffic sources. If you’re not advertising on the internet, Craigslist is a great starting point, and if you have been advertising on the internet for years adding you probably already know Craigslist can be very cost effective.

Have you ever used a copy Machine? Have you ever made a copy of personal information? Does your business have a copy machine? If you answered yes to any of these questions I would recommend you watch this video. Video Link