Did you know that a landlord in the US has an average income of $97,000 annually? Millions of people in the US earn income from rental property, and it can be a lucrative long-term investment.
To get the most out of your investment, you'll need to ensure you're managing your property effectively. A huge part of this is conducting a thorough tenant background check. Not doing background checks can negatively impact your investment for years to come.
In this guide, you'll learn three reasons you need to conduct tenant background checks and see how they can help your investment property succeed.
1. Tenant Background Checks Reduce Your Vacancy Rate
Thorough background checks reduce turnover, resulting in a lower vacancy rate overall. Evicting tenants is a costly and stressful process. It also impacts your monthly cash flow since rent is not being paid.
If you have an investment property, you'll want to reduce your time finding new tenants. Tenant background checks allow you to find tenants that are interested in staying long-term. Also, low turnover rates ultimately make your property a more desirable place for people to live.
2. You'll Get a Good Overall Picture of Potential Tenants
Tenant background checks give you a detailed picture of who you're renting to. You'll get valuable information, such as:
- Proof of income
- Employment history
- Rental history and past evictions
- Information about previous landlords
- Credit history
- Criminal history
An accurate report of a potential tenant's rental history and employment information ensures that they'll pay rent on time. It also increases the likelihood the property will be clean and well maintained.
It's also important to realize that extensive tenant screening can be a long and detailed process. To ensure you're getting the most accurate information possible, you'll need to hire an experienced property management company to conduct your tenant screenings.
3. You'll Have Fewer Safety and Liability Issues
As a landlord, you're responsible for providing a safe place for your tenants to live. It's your duty to ensure that every person that lives on your property has had a complete background check. You'll need to be able to assess any history of violent crime or sexual offenses carefully.
Remember, denying applicants with any type of criminal past is discriminatory according to the Federal Fair Housing Act. However, you can have policies in place that deny people with specific types of criminal history that would impact the safety of your other tenants.
Tenant background checks also decrease your liability when it comes to denying applications. If you thoroughly screen each tenant, you'll have less chance of facing legal issues from people claiming you refused to rent to them based on things like race or religion.
Turn to the Professionals for Your Tenant Background Check Needs
Remember, a tenant background check is one of the most important things you can do to ensure the long-term success of your rental property.
For help with all your property management needs, it's time to turn to Round Table Realty Property Management. We offer full-service property management and will evaluate your property to create a custom plan for you.
Contact us today to discuss your rental property!