what background and credit search do landlords usually use?

[grasswire]

My cousin is looking to rent out a duplex. Is there a preferred online service for doing the usual check on a potential renter? Are there scams? Any hints?

[handmade34]

1. you can pay a realtor to do the checks

I was burned really bad and lost an estimated $20,000. due to bad tenant. If your cousin has just the one unit, it may be worth paying someone to do background checks.

[SmileyRose]

2. online services are almost all not trustworthy.

Even if they mean well, your access to databases online will be limited. A full background search company has other access point the online databots don't have. It's been so long since we hired someone at work I forget the name of the security company. They do good work - costs about $200 - and we get the info back within 24 hrs. Seems like a lot but much less than one month's rent, that's for sure.

I'll bookmark this page and find out tomorrow who we use. I'll pm you tomorrow evening.

[grasswire]

4. so why do landlords charge $18 - $45 for credit-background check?

If it costs a couple of hundred to do the job? A review of craigslist listings shows that most rentals ask for $18-$45. Is that just a way of generating extra revenue?

[Uben]

3. Just qualify them yourself

I have a couple of houses I rent out. I take applications for lease, then pick the best one. I usually take in 10-15 apps, call every reference and check every fact, verify employment, and length of employment, and sometimes even check to see how solid their job is. It's worth the time up front. The main thing is to make sure they can afford the rent. I use 25% of income as a benchmark. If they don't have references or rental history, I don't lease to them.....no exceptions.

I've been burned so many times, I have scars! Nowadays, I don't take chances. Either I get a good tenant or I don't lease.

[On the Road]

5. I Have Found That Calling to Verify Isn't Always Sufficient

Sometimes the previous landlord just wants to get rid of a bad tenant and gives them a clean bill of health. I let a bad tenant in that way and lost thousands in the process.

I do criminal checks, which are free in Maryland, and a basic credit check. Looking not just for total score, although that helps, but multiple unpaid balances. The cheapest credit check I know of is on Mr. Landlord ($10-15), although it's difficult to know how it compares with other sites.

There are a huge variety of options -- you can spend nothing, but the $200 is believable if every screening test is purchased for every person on the lease. (Often a spouse with bad credit hides behind the other spouse.) Some of the options, though, are just overkill.

I would like to add a search of eviction records, but in Maryland you have to visit the courthouse. I have heard it said that examining a monnthly bank statement gives a good idea of how the applicants spends their money (for example, you may be able to see child support payments, which are a big items that are often hidden). And if possible, a home visit at the current residence gives a good idea for how the applicant lives.

Different methods may be appropriate for different situations. If your properties are middle-income houses, it might pay to spend more up front. Mine are working class, and most of the applicants have some blemishes on their records (I have one good tenant coming out of bankruptcy and another who was convicted of manslaughter a few years ago). It's a matter of deciding which things can be overlooked.

[Uben]

6. Mine are definitely working class homes

I've had my share of deadbeats. Worst nightmare was a cop! I screen fairly heavy. I have a feeling if the whole structure was steel, some would figure out how to screw it up! I have model tenants in my homes right now. I hope they stay a while.