As a landlord, your rental property is more than just an investment—it’s a source of income, security, and future financial growth. Selecting the right tenant is critical to maintaining your property’s value and ensuring consistent, hassle-free income.
While meeting potential tenants and reviewing their financial stability are important parts of the process, one of the most effective ways to evaluate a tenant’s reliability is by checking their rental history. This key step helps you avoid bad tenants who may disrupt your property’s operations or cause financial strain through unpaid rent or damages.
In this guide, we’ll discuss why rental history matters, the best ways to check it legally, what red flags to watch for, and how to verify the accuracy of the information you receive. With this guide, you’ll be equipped to make more informed decisions and protect your property from potentially problematic tenants.
Rental history provides valuable insights into a tenant’s behavior and can serve as a predictor for how they will treat your property and lease agreement. Just like a credit score gives lenders an idea of a borrower’s financial responsibility, a rental history report helps landlords understand a tenant's track record with previous landlords.
Here’s why checking rental history is a key step in tenant screening:
At the core of any landlord-tenant relationship is the expectation that rent will be paid on time, every month. A rental history report highlights whether a tenant has met this expectation in the past. If a tenant has consistently paid rent late or missed payments altogether, it raises immediate concerns about their ability to meet their financial obligations in the future. Reviewing this information can help you avoid tenants who may jeopardize your cash flow.
In addition, the history of payment behavior can indicate broader financial habits. A tenant with a consistent history of on-time payments is more likely to respect lease terms and demonstrate financial responsibility across the board.
Evictions are one of the most significant red flags in a tenant’s rental history. When a tenant has been evicted in the past, it usually indicates serious issues such as failure to pay rent, violation of lease terms, or even legal disputes with previous landlords.
Evictions are costly and time-consuming for landlords, often involving legal proceedings and months of unpaid rent. By reviewing a tenant’s eviction history, you can identify tenants who may be more likely to cause similar issues in the future.
However, not all evictions are created equal. Sometimes, extenuating circumstances may have led to an eviction. It’s always a good idea to ask the tenant for an explanation if there is an eviction on their record, especially if it’s a one-time occurrence rather than a pattern of behavior.
A tenant’s rental history not only reveals where they’ve lived but also how long they’ve stayed at each property. Tenants who frequently move from place to place may signal instability or an inability to commit to long-term leases. This could mean higher turnover rates for you, leading to increased costs associated with finding new tenants, vacant periods, and potential property wear and tear from frequent moving.
On the other hand, tenants with a history of long-term rentals suggest stability, which is an attractive quality for landlords seeking dependable, long-term occupants. Longer tenancy periods generally lead to fewer turnover costs and consistent income, which ultimately helps protect the value of your investment.
One of the most valuable aspects of a rental history report is the feedback from previous landlords. These reviews provide direct insight into the tenant’s behavior, how well they maintained the property, whether they paid rent on time, and whether they were respectful of neighbors and the community.
Positive reviews from previous landlords can provide the confidence you need to move forward with a potential tenant, while negative feedback can prompt you to dig deeper or reconsider your decision. It’s important to take these reviews seriously, as past behavior is often a good indicator of future behavior.
Rental history reports may reveal instances where tenants have violated lease terms or been involved in legal disputes with landlords. These violations could range from having unauthorized pets to engaging in illegal activities on the property. Such actions can cause significant problems for landlords, from costly repairs to legal battles and damage to the property’s reputation.
By reviewing a tenant’s rental history, you can make more informed decisions and reduce the risk of taking on tenants who might cause financial or legal headaches down the road.
As a landlord, it’s important to ensure that you’re conducting tenant screenings in a legal and compliant manner. This means following both federal and state laws that protect tenants' rights, particularly under the Fair Credit Reporting Act (FCRA). Here’s a step-by-step guide on how to check tenants’ rental history legally and effectively.
Before conducting any background or rental history check, you must obtain the tenant’s written consent. Most rental applications include a section where applicants agree to background and credit checks. Without this consent, checking a tenant’s rental history could violate the law and open you up to potential lawsuits.
Several tenant screening platforms are designed to help landlords legally check rental history and other relevant background information. These platforms ensure compliance with FCRA regulations and provide detailed reports that can help you make informed decisions. Below are some of the most popular platforms:
Using these services ensures that you are operating within legal boundaries while accessing the information you need to make a sound rental decision.
In addition to rental history, reviewing a potential tenant’s credit report can provide further insights into their financial responsibility. A poor credit score or a history of unpaid debts might indicate that the tenant struggles to manage their finances, increasing the risk of missed rent payments.
When screening tenants, it’s important to ensure that you’re following the Fair Housing Act. This federal law prohibits discrimination based on race, color, religion, sex, national origin, familial status, or disability. Make sure that your screening process is transparent, consistent, and free of bias to avoid any legal issues.
If you decide not to rent to an applicant based on the information in their rental history or background check, you are legally required to provide an "Adverse Action Notice." This document explains the reason for the denial and provides the tenant with the contact information of the screening company used. It also informs the tenant of their right to dispute any inaccuracies in the report.
By following these legal steps, you can check tenants' rental history while protecting both your property and your legal standing.
When reviewing a tenant’s rental history, it’s important to know what specific issues to look out for. While not all red flags mean you should reject a tenant outright, they can help you make a more informed decision and ask the right questions during the screening process.
By keeping an eye out for these red flags, you can avoid taking on tenants who may cause problems for your property.
Even after reviewing a rental history report, it’s important to verify the information for accuracy. Some tenants may provide false or misleading information, so it’s essential to cross-check their rental history with references and other sources.
One of the best ways to verify a tenant’s rental history is by reaching out to their previous landlords. Ask specific questions about their behavior as a tenant, including:
A previous landlord’s feedback can provide valuable insights into whether the tenant will be a good fit for your property.
If a tenant’s rental history has gaps or if you have concerns about the accuracy of the report, ask the tenant for documentation. This could include lease agreements, rent payment receipts, or letters from previous landlords. Documentation can help confirm that the tenant has been truthful about their rental history.
If you’re using multiple tenant screening services, cross-check the information between reports to ensure consistency. Differences in rental history, credit reports, or background checks may indicate an error or misrepresentation.
While most tenants are honest about their rental history, there’s always the chance that some may try to mislead you. By verifying rental history through multiple sources, you can make sure that the information provided is accurate and complete, giving you confidence in your tenant selection.
As a landlord, ensuring that you rent to reliable tenants is key to protecting your investment and minimizing risks. By checking tenants’ rental history, you can gain valuable insights into their past behavior and make more informed decisions about who to rent to.
Remember, tenant screening isn’t just about finding someone who can pay rent; it’s about selecting tenants who will respect your property, adhere to lease terms, and contribute positively to your property’s long-term success.
Protect your investment—contact RiverTown Realty today to learn more about how we can help you screen tenants and secure the right renters for your property.