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Did you know that an effective tenant background check is one of the best ways to protect your investment property's value? Because background screening is vital to a successful landlord-tenant relationship, following the proper steps is essential.
Skipping a crucial step or following the incorrect process can have negative consequences. For example, it might land you in legal hot water or cause you to overlook critical details about your tenants.
In this post, we go through the four key steps for tenant background checks in Arizona. Keep reading to learn more!
1. Get Your Applicants' Written Consent
The federal Fair Credit Reporting Act (FCRA) only allows a person to use consumer reports in background checks if they have a permissible purpose. You need your applicants' written consent to the background check to show the Federal Trade Commission (who enforces the FCRA) that you have a permissible purpose.
To cover your legal bases, inform your applicants of your intention to do a check at the start of the application process. It's best to obtain consent from prospective tenants simultaneously when you collect their application fee. If you charge an application fee, you must also state its purpose in writing (e.g., to pay for background checks).
2. Collect the Information You Need
After you get consent to do the check, collect your applicants' personal information to do a thorough background check. Key pieces of information include:
- Full names
- Date(s) of birth
- Social Security Number(s)
- Current address
- Contact information for references
- Previous addresses and employment details
This information allows you to access screening reports, including criminal records, credit records, and even tenancy histories.
3. Select a Tenant Background Check Service
Next, you'll want to find a reliable background check service. There are many options, but you must ensure your chosen service complies with the FCRA's rules.
If you're the DIY type, you could use an online platform for your renter screening process. These services are affordable, and many allow you to customize the criteria you use for your check. However, one major drawback is that their databases may be slightly inaccurate or outdated.
Alternatively, you could outsource your tenant approval process to a registered property manager. The benefits of this option include:
- Better legal compliance and expertise
- Background checks are more thorough and detailed
- Property managers are experienced in finding great tenants
4. Make Your Decision
Finally, you should carefully evaluate the background check results. Some key points to focus on are:
- Criminal history
- Credit history and financial means and prospects
- Rental history
You must consider Fair Housing Laws when assessing applicants' results. These laws prohibit discrimination based on race, religion, nationality, and other similar identity markers.
Make Professional Property Management Decisions
Following these steps ensures you conduct your tenant background check legally, thoroughly, and fairly. This will allow you to protect your investment by choosing reliable tenants. Diligence in the tenant verification steps helps create a stable, long-term landlord-tenant relationship.
We can help simplify your tenant screening with excellent property management expertise in Mesa, Arizona. We provide thorough, compliant screening processes to secure reliable tenants. Contact us today and allow us to ensure that your property stays profitable and well-maintained while you enjoy stress-free ownership.
