One of the keys to success with owning rental properties in Portland Oregon is conducting a thorough tenant background check. This is essential because, if a background check is not done right, it’s very possible that you will rent your property to an unqualified tenant who will cost you a lot of time, money and hassle.
Thankfully, success leaves clues and knowing how to conduct a background check is easy if you follow a winning formula.
In this article we will provide you with effective tips for conducting an effective background check from start to finish.
Tips For Conducting An Effective Tenant Background Check
Before running a background check, define your tenant screening criteria. Consider factors such as:
- Minimum credit score
- Income requirements (e.g., three times the rent amount)
- Rental history
- Criminal background considerations (in compliance with fair housing laws)
- Pet policies
Having these criteria in place ensures fairness and consistency in tenant selection.
Obtain a Signed Consent Form
You must have the applicant’s written permission to conduct a background check. Include this authorization in your rental application form, stating that you will review credit, rental history, and criminal background records.
Verify Identity and Personal Information
Start by confirming the applicant’s identity. To ensure accuracy, request a valid government-issued ID, such as a driver’s license or passport. Verify that the information matches what is listed on the application.
Check Credit History With Background Check
A credit check provides insights into a tenant’s financial responsibility. Look for:
- Credit score (higher scores indicate reliability)
- Payment history (late or missed payments are red flags)
- Debt-to-income ratio
- Bankruptcies or past evictions
You can obtain a tenant’s credit report from agencies like Experian, Equifax, or TransUnion or use tenant screening services that consolidate reports.
Verify Employment and Income
Ensure the tenant has a stable income to afford rent payments. Request pay stubs, tax returns, or employer verification letters. The tenant’s income should be at least three times the monthly rent.
Contact Previous Landlords
Speaking with past landlords provides valuable insight into a tenant’s rental history. Ask questions like:
- Did the tenant pay rent on time?
- Were there any complaints from neighbors?
- Did they maintain the property well?
- Would you rent to them again?
Be cautious of fake landlord references by verifying the property owner’s details.
Check Criminal Background
A criminal background check helps ensure the safety of your property and neighbors. However, be mindful of Fair Housing Laws, which prohibit discrimination based on certain criminal records. Focus on:
- Felony convictions related to violent crimes or property damage
- Recent serious offenses
- Patterns of criminal behavior
Use reputable tenant screening services to access nationwide criminal databases.
Verify Rental History
Check for past evictions, lawsuits, or disputes. Evictions can be a red flag, indicating non-payment of rent or lease violations. Many online screening services provide eviction history reports.
Interview the Applicant
A face-to-face or virtual interview can help assess the tenant’s demeanor, honesty, and ability to comply with lease terms. Ask open-ended questions about their rental experience, employment, and lifestyle.
Be Fair and Compliant with the Laws
Ensure your screening process complies with Fair Housing Laws and local regulations. Avoid discrimination based on race, religion, disability, or other protected categories. Apply the same standards to all applicants to avoid legal issues.
11. Make an Informed Decision
Once you have gathered all the necessary information, compare the applicant’s profile against your criteria. Weigh the pros and cons before making a final decision. If you reject an applicant based on their credit report, provide an adverse action notice explaining why.
Contact Us
Conducting a thorough background check minimizes rental risks and helps you find trustworthy tenants. Property managers can ensure a smoother leasing process and maintain a successful rental business by following these steps.
At Rent Portland Homes – Professionals we take pride in offering our clients professional property management services which includes thorough background checks. To learn more about the services that we can offer you contact us today by calling (503) 646-9664 – Talk to a Live Person – Our office answers the phone 9 AM to 5 PM Monday through Friday – or click here to connect with us online.
