Landlord Credit Checks & Tenant ScreeningTenant Screening for landlords and property managers is a great way to help reduce risk from property damage and limit costly eviction processes by running checks before a property is rented out. It is important to know whether or not a protential renter has a good credit record, wether or not they have a crminal history and what previous landlords have to say about them. Finding out this information can provide landlords and property managers with the data they need to make an informed decision.
An important factor leading to evictions is a rent to income ratio. 25% of renters spend 50% or more of their income on rent according to the 2015 survey. Renters spending more than 30% of their income on rent have a higher ratio of evictions than those who spend less. When you run credit checks on prospective renters, this is something that should be considered before making your rental decision. According to a RedFin survey 2.7 Million people faced eviction in 2015, and those are just the knows ones that went through the court system. Part of the reason why this is occuring is that rental prices have gone up 66% since 2000 while median income has only increased 35% leading to people being evicted from rental properties they could once afford, but can no longer do so.
According to a recent TransUnion survey, the average eviction proceeding costs a landlord $3,500 per instance and can take up to 3 or 4 weeks to complete. This is an enormous cost for a landlord, especially ones that aren't huge commercial property owners. Making sure that you have credit-worthy tenants can really help reduce these risks.
In addition to criminal background checks and credit reports, running eviction reports can give you an even better idea of whether or not a prospective tenant may lead to eviction proceedings. Statistically, previously evicted tenants are 3 times more likely to be evicted again than never-evicted tenants.
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