Finding the right tenants can make or break your rental property experience. In Houston, where eviction filings reached 81,105 last year (Eviction Lab), property owners face real challenges regarding tenant reliability.
Understanding the key elements of a tenant background check can help protect your investment and give you peace of mind. Keep reading to learn how four simple steps can improve your rental screening process.
1. Credit History Examination
The first step in tenant screening is reviewing the potential tenant's credit history. This gives insight into their financial responsibility, which is crucial in determining whether they can pay rent consistently. Look for:
- Payment history
- Debt-to-income ratio
- Bankruptcies or foreclosures
It is vital for landlords to maintain a consistent rental income, and evaluating a tenant's credit report can help predict their future payment behavior. To do a credit check, you need the tenant's written permission.
Also, under the Fair Credit Reporting Act (FCRA), landlords must treat all applicants fairly and avoid discrimination. Make sure to use the same screening process for everyone to stay compliant with the law.
2. Criminal Background Check
In Houston, landlords can perform criminal background checks as part of the tenant screening process. However, there are essential guidelines and legal considerations to keep in mind to ensure compliance with local, state, and federal laws, such as the Fair Housing Act and Houston's local ordinances
Landlords should create a clear, written policy on how criminal history will be considered and apply it consistently to all applicants. To prevent legal complications during landlord-tenant checks, they must avoid making decisions based on old offenses or those that do not pose a risk to the property or other tenants.
3. Rental History Verification
Verifying a tenant's rental history can provide valuable insights into their past behavior as renters. This can help avoid headaches down the line. Contact previous landlords to inquire about the following:
- Payment punctuality
- Compliance with lease agreements
- Overall conduct as a tenant
4. Employment and Income Verification
Lastly, confirming that your potential tenant is gainfully employed and has a stable income is crucial to their ability to pay rent. You should request:
- Recent pay stubs
- W-2 forms or tax returns
- Employment letters
For self-employed tenants, you can verify income using tax returns, recent bank statements, or profit and loss statements.
It's important to compare their income with the rent cost to ensure they can consistently make payments. Using background check services for property management in the Houston area can significantly streamline the process and ensure property investment protection.
Why a Tenant Background Check Matters
A tenant background check protects your investment and ensures a smooth rental experience. In Houston's competitive rental market, these steps will help you find reliable tenants and secure your property. Professional property management services understand this process and ensure thorough tenant screenings.
PMI Bear Creek is here to simplify your tenant screening and property management process. As a locally owned and independently operated office, we provide expert services backed by PMI's nearly 20 years of industry experience. Contact us today to see how our technology-driven approach can protect your investment and keep your rental property running smoothly.
