You might have a thorough screening process in place, where you check credit, verify income, and look for evidence of criminal convictions in an applicant’s background.
All of those are important steps in screening a tenant, but no process is complete without verifying a tenant’s rental history. This is necessary because understanding how a tenant has performed in rental properties in the past will tell you how they’re likely to perform in the future.
Always verify rental history and always do a reference check of current and former landlords. This is not a step that a lot of landlords take, but it’s worth your investment of time and resources. Income is important to ensure your tenant can pay rent on time every month. Credit and financial information will tell you how responsible your tenant is with money.
Rental history, however, is perhaps the most important part of any screening process. It covers everything from financial to physical behavior.
If you’re not sure how to prioritize digging into an applicant’s rental history, we have some tips for you today.
Collect Rental History Information and Consent on the Application
The first part of verifying rental history is gathering information from your prospective tenant on their application. There are some specific things you need:
- Addresses of current and former places of residence. You can also ask how much rent was paid and what the dates of residency were.
- Contact information for previous and current landlords. You should ask for a full name, a phone number, and an email address.
- Permission from the applicant to contact those landlords or property managers.
Rental history is considered private information, so it is never a good idea to get in touch with your applicant’s former landlords without permission and consent. There needs to be space for that on your application.
Your applicants need to know you’ll be checking these references. You want and need consent to conduct a full background check, including landlord references.
Look for Gaps in Rental History
Once you have a complete application that is signed and dated and inclusive of consent to check rental history, you’ll want to begin reviewing the timeline that your applicant has provided for where they’ve lived previously.
There should be a logical flow to places that the tenant has lived previously. If you notice any gaps, you might want to discuss that with the applicant and find out what their living situation was during those time periods. Maybe they were traveling. Maybe they were living with family. It isn’t necessarily a bad thing if there’s a year where no rental history can be accounted for; you simply want to ask for an explanation so you can be sure it doesn’t indicate a problem. If a tenant had a particularly bad experience with a landlord or was asked to leave their property, they might want to leave it out entirely.
Rental History Includes Checking for Prior Evictions
The next logical step is to look for prior evictions.
Evictions can be tricky. Many landlords and property managers have a zero tolerance policy on evictions. If an applicant has ever been evicted, it’s an automatic reason to disqualify them from renting a property.
You can decide how you want to handle these situations.
As you’re putting together a set of standard rental qualifying criteria, you’ll have to decide whether or not you’re okay with renting your property to someone with a history of evictions.
We hesitate to rent to people who have been evicted from rental properties previously, especially if those evictions were recent. However, a bit of nuance is sometimes required. For example, an applicant who was evicted 20 years ago but has spent the last decade establishing a positive rental history would probably be okay. Someone who has been evicted twice in the last five years, however, would be more of a risk.
Decide what you’re willing to work with before you begin checking rental history. You have to be consistent and hold each applicant to the same standards.
How do you check for prior evictions? You can find eviction records in credit reports, but not always. Conduct a nationwide eviction check before you approve your new tenants.
Court records will show whether a tenant you’re considering has been evicted, but these are local. You’ll need to hire a third party company to conduct a thorough eviction search or a Las Vegas property manager. It’s worth it. You don’t have the time to check court records for every state, and you don’t want to miss potential evictions by focusing only on Nevada.
An eviction record search results will include basic information about the filing. You’ll receive a record that includes the tenant’s full name, the name of the plaintiff or property owner, the address of the property, the dates that the eviction was filed, the location of the court the eviction was filed with as well as the outcome of the eviction proceedings.
When you run your own eviction search, make sure you’re working with accurate records and data. It’s especially important that you’re looking at records belonging to the correct person.
Contacting Former Landlords
Verify rental history by talking to current and former landlords.
There are several ways to manage the reference checking process. You can talk to former landlords on the phone or send an email when you’re verifying a tenant’s rental history. Sometimes, property owners will have a specific form that they email out to landlords.
Some of the questions you’ll want to ask include:
- How long was the applicant a resident of theirs? Make sure the dates match up to what’s on the application.
- How much rent was paid?
- Was rent paid on time?
- Was there any property damage left behind?
- Did they receive their security deposit back?
- Was proper notice given before the tenant moved out?
- Did the tenant have pets, and were they well-behaved?
- Would you rent to this tenant again?
A prospective tenant’s previous landlord will be able to answer all of these questions and tell you if rent was paid on time, how rent payments were usually delivered, if there were any problems with neighbors, and if there were any problems with pets or lease violations.
Most landlords are more than willing to give out this information. They understand what it’s like to turn a property over to a tenant, and they’re happy to help out when they can. If you have trouble getting in touch with a landlord, let your applicant know. Or, move on to another landlord reference who may be more available.
Always verify that you’re talking to the actual property owner or property manager. If an applicant had a bad experience at a former home, they might not be willing to give you contact information that’s accurate. Don’t be fooled into speaking with a friend or family member.
What If an Applicant Does Not Have a Rental History to Verify?
Most applicants will come to you with some rental history to provide. However, if you’re potentially renting out a home to a college student, a young person who has lived at home for many years, or someone from out of the country who has no one local you can call to verify rental details, you’ll have to be creative. These applicants are new to the rental market and just because they don’t have a rental history to provide doesn’t mean that they’re risky tenants.
Don’t disqualify renters without a rental history too quickly.
If you find yourself in this situation, there are several things you can do to limit the risk you’d take on with a tenant who has no rental history.
- Proof of employment can show you that there is regular income expected, and the obligation to pay rent will be met. While this does not make up for rental history, it does provide some extra context into whether or not your tenant will be struggling from month to month.
- You can ask for a higher security deposit. In Nevada, you are legally allowed to charge up to the equivalent of three months’ rent for a security deposit. If you’re concerned that you cannot call prior landlords, you can protect yourself with a larger deposit.
These are some of our best practices when it comes to verifying rental history. Make sure you’re following all fair housing laws during your screening process, and if you need help, don’t hesitate to reach out to a local Las Vegas property management company. We’d be happy to serve as a resource for you.
Please contact us at New West Property Management. Our team expertly manages residential rental homes in Las Vegas and throughout Clark County, including Henderson and North Las Vegas.