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I have a bunch of people coming to look at my house on Sunday. This is the first time we are renting out our home. Sorry if this seems like a stupid question but, how do I do a background check? Do you suggest a specific website/company? Do I charge them (I would think so right??) and how much will it cost me to do a background check? I have to have them sign something allowing the check right? What should I look for that might help weed out a possible bad renters?
thanks everyone. I am feeling overwhelmed but am so happy I can come on here and ask questions!
You can google search 'tenant screening' and come up with many options such as this one.
Most LLs do it themselves by ordering a credit report from one of the three majors, and asking for the names and phone numbers of past landlords, and calling those up and asking them if there were any issues with those tenants. These same orgs can do a criminal background check, if you wish. It is generally an additional fee, and you will have the option of either a local or a nationwide search. Obv the local search will only turn up results in the local municipality or county.
Note that you need written permission from the applicant in order to obtain their credit report. For this reason, some LLs request that applicants bring their own copy of their credit report (dated recently). Of course, there's always the possibility that someone will fake their report. But it avoids the problem of having to get permission and paying for the service.
Did you nix the idea of using a property manager? Just my opinion but since you're moving out of state and haven't done this sort of thing before, you really should seriously think about letting someone with know-how take care of your house. I know you said you have family nearby who can oversee but if they've no experience either they're not going to be of much help to you if things do go wrong. Just reading through this forum should show you that you really need to know the renting business to save yourself from potential major problems. Good luck!
I have a bunch of people coming to look at my house on Sunday. This is the first time we are renting out our home. Sorry if this seems like a stupid question but, how do I do a background check? Do you suggest a specific website/company? Do I charge them (I would think so right??) and how much will it cost me to do a background check? I have to have them sign something allowing the check right? What should I look for that might help weed out a possible bad renters?
thanks everyone. I am feeling overwhelmed but am so happy I can come on here and ask questions!
The wording "overwhelmed" worries me....this is just the beginning. If you have no clue what to ask or look for then you will be in for major issues...Tenants overall are professionals when it comes to renting and not everybody is honest and many could get an academy award for acting/lying!
The wording "overwhelmed" worries me....this is just the beginning. If you have no clue what to ask or look for then you will be in for major issues...Tenants overall are professionals when it comes to renting and not everybody is honest and many could get an academy award for acting/lying!
So true. OP, please think carefully. There are enough naive angry tenants and naive landlords on this forum spouting their woes and one less would be awesome. Cheers!
Some companies won't allow private people to conduct a background check....so you have to check carefully.
The one we work with is only allowing myself and one other person in our company to email/fax it and than they call back to verify if it is us requesting it. Ones one of our realtors had faxed them a form and they didn't allow it. That is to prevent people from obtaining peoples SSN for other purposes than legal things.
I agree with the others -- there is just so much to know about renting out property that you have to be really well educated on it or it can turn around and bite you in the end (i.e. law suit). What are the mandatory disclosure forms you need to give each tenant? What lease clauses are prohibited in your state? What will you do if the tenant fails to pay rent? Are you aware of the laws regarding notices required fo eviction? You will not be near the home -- does your family have experience in LL/tenant issues? Are they prepared to be called at any hour to repair something?
Many people do manage to be adequate private landlords on their own -- of course -- but I do think many in your boat (LL be default, so to speak) get thrown into this without knowing the laws and potential ramifications of not knowing all of the laws.
Research on this forum alone will give you some clue about how things can go wrong quickly, from both the tenant and a LL perspective.
I urge you to reconsider hiring a PM company, but regardless of what you do, I wish you luck.
I'm just worried about how much a PM company will cost... I mean we aren't selling because we can't take the loss. I cant afford to pay out of pocket. Everyone has given me alot to think about, which I am doing very seriously.
We rent out a house we couldn't sell, and unfortunately fair market value for it for rent does not cover our entire mortgage, insurance and property taxes anyway. We get $1100 a month for it and pay about $1500/mo, plus the PM company takes 10% so we really are looking at a loss of $over $500 a month. But that's better than it just sitting there empty and we have the knowledge that someone with a ton of experience is handing the tenants -- we have not had to deal with that whole part of things at all.
Ask for permission from the potential tenant for an analysis of their credit report, and seeking professional help from property managers is also a good idea.
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