The Common Red Flags to Look for in a Tenant Background Check

The Common Red Flags to Look for in a Tenant Background Check

In some cities, evictions are soaring over 50% above pre-pandemic levels. Evictions are stressful for both landlords and tenants, and it's in your best interest to avoid them. When you have a problem tenant, however, that can be tough.

A good tenant background check can help you avoid some of these common issues. You can catch red flags early. But what are those red flags?

Read on to learn the top red flags in a tenant background check.

Poor Credit History

Most landlords include a basic credit check when they do a tenant background check. Why is this?

A tenant with a history of financial irresponsibility (which can be indicated by a low credit score) may pose a risk to a landlord. A poor credit history can indicate a tenant's inability to manage their finances and pay rent on time.

There are, of course, exceptions. If a tenant is improving their credit or if they have no credit at all, they may still be a safe option. If the rest of the application seems good, you may be able to look past a mediocre credit score during the tenant screening process.

Previous Evictions

A history of evictions or legal disputes with previous landlords is, in many cases, a red flag.

It suggests that a tenant is unable (or unwilling) to comply with the terms of the lease. They may have trouble paying rent, disrupting other tenants, and more.

Landlords should be cautious when renting to tenants with eviction records. If the tenant otherwise seems good, consider opening up a conversation. There are, of course, cases in which the eviction wasn't the fault of the tenant.

Criminal History

Certain criminal convictions, especially for violent offenses or drug-related crimes, can be a red flag for landlords. While people with criminal histories deserve housing, you should take this on a case-by-case basis.

It's important to consider the nature (and recency) of the convictions when trying to determine the risk they may pose to the property and other tenants. Consider consulting with your property management company to ensure you're not breaking any fair housing laws with your decision.

Inconsistent Employment or Income

You need your tenants to pay rent. If they don't have consistent employment or income, this could be a problem.

A tenant with an inconsistent work history, frequent job changes, or unstable income may have difficulty paying rent every month, and this will affect your income. Landlords typically prefer tenants with a stable source of income that is sufficient to cover rent and other living expenses.

Keep in mind that this "income" may not always come from a 9-5. Bank statements can be more reliable than paystubs as many tenants may have stipends, 1099 work, and more.

Watch for These on a Tenant Background Check

When you're conducting a tenant background check, you need to check for these red flags. Remember, one red flag doesn't always mean that a tenant will be problematic, but it's something to keep in mind when you're comparing applicants.

Are you a landlord in Bend, Oregon? PMI Central Oregon is here to help you make the most of your investment. Our full-service property management team will make your life as a landlord easier, offering plenty of landlord advice and more.

Schedule a free consult so we can discuss your property management needs.