Consider the consequences of renting your property to someone with a history of evictions for non payment of rent or a habit of writing bounced checks. Or the effects of allowing someone who has a criminal record or several collection accounts to live on your property. What about a terrorist or sex offender?
It only makes sense that a conscientious landlord would want to know everything possible about a prospective tenant before renting to them. But sadly, there are many property owners who do not take the time to properly screen their applicants. If they choose to rent based on feelings rather than facts and don’t run a tenant background check, they risk paying the price in the end.
In addition to the information revealed on a person’s background check for tenants, there may be red flags that become apparent as you meet with the candidate and go over their application.
#1 The applicant can’t or won’t give you contact information for their current landlord, employer, or personal references. What are they trying to hide? Perhaps these people have negative information or experiences with the candidate that could negatively influence your decision as to whether you’ll want to rent to them or not.
#2 The applicant provides suspicious pay stubs. If your applicant has not supplied employer contact information, you should ask for their most recent pay stubs to verify their employment. It is imperative that you check all the basic information on the pay stub closely and look for any discrepancies in the numbers, formatting and overall quality. This is a long-used scam that has become more popular with the rise in the number of websites that offer fraudulent pay stubs. Self-employed applicants should supply a tax return document with proof of earnings and income.
#3 The application omits information or is inconsistent. Carefully review the application for omitted information or inconsistencies. The profile on the reports should match the person who filled out the application. Make certain that the date of birth, employment history and most importantly, the Social Security Number match the person’s profile.
#4 The deposit check is greater than the amount you are asking for. Always ask for a cashier’s check or money order in payment for the security deposit and first month’s rent. When an applicant wants to pay the deposit or even their monthly rent in cash, it might be an indication that they run a non traceable business or have an illegal occupation.
Be suspicious if they ask you to accept a deposit check in an amount greater than you are asking for with a request for you to refund them the overpayment. Never accept more money than the specified rent for your property and do not accept an out-of-state cashier’s or paper check, especially if it is for more than you are due. This is a well-known scam that will leave you without your money and without a tenant.
Someone who wants to pay the deposit in installments probably lacks the income to rent the property. It may also be that they are not planning to make those additional payments at all. Do not sign a lease until you know that you will receive the security deposit in full before the move-in date. Keep in mind that there are a few cities that have passed “Renter’s Choice” bills which may allow tenants to pay their deposit in payments, but you can still incentivize tenants to pay the deposit in full.
If they are allowed to postpone paying the full security deposit, you may never see that money or the rent for the following months. Should you begin the eviction process, they know that it will be several months before they must vacate the premises. In the meantime, they are living in your property rent-free.
#5 The applicant insists you use a copy of the credit report they provide. Beware if the applicant tries to give you a copy of their “credit report” rather than have you order your own. This could be an attempt on their part to keep you from seeing their true financial history. With today’s technology available to anyone, it is surprisingly easy to create a favorable credit report that will lead you to rent to someone who is not a reliable tenant. Note, New York has recently allowed tenants to furnish their own credit reports, but that still doesn’t mean you can’t pay for and run a credit report yourself. Always verify.