You wouldn't let a stranger borrow your car keys without knowing a thing about them. So why would you do the same with your rental property?
A tenant background check serves as a crucial vetting process to protect not just your investment, but also the community you're fostering in your rental units. With over a dozen elements to scrutinize, from criminal records to references, it's easy to overlook the importance of employment histories.
However, this part of the check shouldn't be glossed over. It's a cornerstone for making informed, secure decisions about your future tenants. So let's dive in and discuss this issue further.
Employment Histories Tell You More Than You Think
Okay, let's dive into the good stuff. You might think an employment history is just a list of places someone has worked. Sure, on the surface, it might look like that; however, this list can be a treasure trove of valuable information.
For starters, it offers clues about a prospective tenant's job stability. Long stints at multiple jobs? That's a sign the person is reliable.
A string of short-term jobs might be a red flag, though. While not a deal-breaker, it's something you need to consider.
Employment History in Tenant Screening
In your tenant screening process, you'll likely run a credit check, ask for references, and even do some social media snooping. But remember, an employment history is also a critical tool.
Just like a credit check can provide insight into someone's financial habits, employment history gives you a peek into their professional life. You learn about their income level, which directly impacts their ability to pay rent.
You also find out about their skill set. For instance, a highly skilled job (like these jobs) could indicate a higher income, making you more confident in their ability to meet monthly payments.
How to Collect Rent with Confidence
Now, let's get real. Your primary goal as a landlord is to collect rent on time, right?
Well, you can boost your confidence in this area by thoroughly vetting employment histories. If a tenant has a stable job and has been in the workforce for a while, chances are they can manage their finances better. This makes it more likely for you to collect rent without a hitch; they've shown they can handle responsibility, after all.
Do Employment Histories Replace Credit Checks?
A credit check reveals a person's ability to manage debt and make timely payments. But it doesn't always give the full picture of their financial stability.
A good job today can assure you they'll likely have the funds to pay the rent. So, in your quest to find the ideal tenant, don't underestimate the power of a solid employment history.
Legal Concerns You Should Be Aware Of
It's also wise to treat every applicant the same. This way you can avoid any potential claims of discrimination.
Finally, if you do decide to reject an applicant based on their employment history, you'll need to inform them of the specific reasons why.
The Underrated Element of Tenant Background Check
Tenant background checks are like jigsaw puzzles. Each piece brings you closer to a clearer picture of your potential tenant.
If you want to do a tenant background check the right, get in touch with us at PMI North Dallas today!