Today’s most profitable rental property portfolios are the result of meticulous due diligence, countless hours of research, hard work, and foresight. A truly profitable rental property, at the very least, is contingent on several variables coming together and working synergistically on behalf of an investor. However, it is worth noting that there is a single variable that trumps all others: the tenants themselves. If for nothing else, a rental property is only as good as the tenants that reside in it. Tenants can turn a good rental property into a great one, and vice versa.
Rental property investors need to pay special considerations to those they intend to let live in their properties. More importantly, they need to implement a thorough tenant background check, one that will simultaneously award peace of mind and mitigate risk. In doing so, it’s in the best interest of landlords to refer to today’s best tenant background check and screening services.
The 10 Best Tenant Screening Services For Landlords
Several credible screening services have been created to help landlords fill their properties with qualified tenants. However, not all screening services for landlords are created equal; some are inherently better than others. To screen tenants accurately and thoroughly, here’s a list of some of the best screening services made available to landlords:
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First Advantage
Widely considered the best overall tenant background check services on the market, First Advantage has become synonymous with a broad offering of services and resources. Founded nearly two decades ago, First Advantage has used its industry-leading presence to establish 26 locations in 14 countries worldwide. The company’s size allows it to conduct upwards of 75 million background checks a year with diligence and accuracy.
The Pros Of Using First Advantage
The pros of using First Advantage include, but are not limited to:
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A vast library of white papers and data sheets which detail existing landlord-tenant relationships
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Additional services offered by third-party vendors
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Frequently updated criminal records database
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Human component to mitigate errors or miscommunication
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Compliant with the Fair Credit Reporting Act
The Cons Of Using First Advantage
The cons of using First Advantage include, but are not limited to:
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Prices aren’t listed online for convenience
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Navigating the website isn’t as intuitive as other competitors
RentPrep
RentPrep is a tenant background check service that caters to landlords with multiple properties. In particular, RentPrep offers what can only be described as a bulk discount to landlords with multiple properties. The discount kicks in at 50 properties, so RentPrep is typically preferred by institutional landlords. It is also worth pointing out that RentPrep performs manual screening (supported by technology); that’s important to note because most of its competitors depend on algorithms to conduct their checks. As a result, landlords who appreciate a more human touch may prefer RentPrep.
The Pros Of Using RentPrep
The pros of using RentPrep include, but are not limited to:
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Employees are trained in accordance with the Fair Credit Reporting Act
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Bulk discounts applied to landlords with 50 or more properties
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Utilizes TransUnion’s SmartMove Reporting
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Highly rated customer support team
The Cons Of Using RentPrep
The cons of using RentPrep include, but are not limited to:
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Reports are not distributed instantly
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Lacks an option to charge applicants directly
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Applicants’ credit scores are not included in the Credit Check Add-on service
SmartMove
In association with TransUnion, SmartMove provides a tenant background check software with a lot of credibility. SmartMove was specifically designed to help landlords who aren’t property management professionals; that means their software is intuitive and effective. SmartMove’s proprietary technology allows prospective tenants to make credit reports directly to landlords, facilitating the screening process without jeopardizing consumer information.
The Pros Of Using SmartMove
The pros of using SmartMove include, but are not limited to:
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Competitive pricing model
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Screening checks include all of the metrics landlords have come to expect
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Extensive criminal record database can produce results in minutes
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Optionality gives either tenants or landlords the ability to pay for the tenant background check
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Created by TransUnion, a trustworthy company that has been in business since 1968
The Cons Of Using SmartMove
The cons of using SmartMove include, but are not limited to:
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Certain states are subject to limited criminal checks
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The most comprehensive screenings are only available with premium plans
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Smart move is expensive, relative to its closest competitors
National Tenant Network
National Tenant Network provides all of the necessary tenant screening services today’s landlords need to operate. Both real estate agents and property owners have used the National Tenant Network for decades for credit and background checks. The company’s extensive catalog of reports provides insight into what they have done for previous landlords and what they can do for aspiring landlords.
The Pros Of Using National Tenant Network
The pros of using National Tenant Network include, but are not limited to:
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More than four decades of experience gained from running tenant background checks
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Provides eviction and lease violation data to help landlords make better decisions
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Detailed credit reports for optimal insight
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Local, statewide, and multi-state criminal background searches
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Secure servers allow for tenant screening “on the go”
The Cons Of Using National Tenant Network
The cons of using National Tenant Network include, but are not limited to:
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Pricing is not disclosed on the website
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Affordable plans offer minimal services
E-Renter
The E-Renter’s tenant background check service isn’t the cheapest on the market, but it presents great value to landlords relative to its offerings. In other words, E-Renter gives landlords a lot of “bang for their buck.” In spite of its affordable price point, E-Renter still grants landlords access to some of today’s most important screening tools. Founded by two rental property owners who wanted to simplify the process in 2003, E-Renter is a tenant background service created by landlords for landlords.
The Pros Of Using E-Renter
The pros of using E-Renter include, but are not limited to:
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Employees are trained in accordance with the Fair Credit Reporting Act
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Landlords can view regulations pertaining to their particular state online
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Entry level package includes more than most competitors’ comparable packages
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No inspection required for landlords to start the process
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Landlords may view sample reports online
The Cons Of Using E-Renter
The cons of using E-Renter include, but are not limited to:
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Lacks an option to charge applicants directly
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Landlords will not receive a full credit report
VeriFirst
As perhaps the most comprehensive tenant background check service, VeriFirst offers landlords an entire suite of services that its competitors do not. In addition to the traditional offerings, VeriFirst provides landlords with instant reporting, debt collections, property management systems, in-depth screening tools that account for both the guarantor and co-applicant and a host of other services. VeriFirst is working hard to be the one-stop shop for today’s landlords.
The Pros Of Using VeriFirst
The pros of using VeriFirst include, but are not limited to:
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Employees are trained in accordance with the Fair Credit Reporting Act
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A vast library of educational material
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Instant reporting
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Seamless integration with property management systems
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Online debt collections
The Cons Of Using VeriFirst
The cons of using VeriFirst include, but are not limited to:
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Pricing isn’t included on the website and must be requested via an online form
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Lacks an option to charge applicants directly
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The website doesn’t differentiate services between premium and basic
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Landlords can’t view sample reports online
Avail
Avail is a tenant screening service that offers landlords of all experience levels credit reports, criminal checks, and eviction history. Property managers can rely on Avail’s services to streamline the tenant screening process. Avail is seen as an entry-level screening service with a user-friendly operating system, but its products can help everyone from single-home landlords to professional real estate managers.
The Pros Of Using Avail
The pros of using Avail include, but are not limited to:
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User-friendly approach focuses on new landlords
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Offers a platform for marketing properties online
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Several plans award landlords with optionality
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Online pricing available
The Cons Of Using Avail
The cons of using Avail include, but are not limited to:
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Basic services do not include tenant tracking and insurance management
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Relatively new compared to more established competitors
Apartments.com
Previously known as Cozy, Apartments.com has fallen into a niche that serves professionals and businesses. The company’s software suite includes everything professional property managers need to screen tenants: online rent collection, tenant screening, renters insurance, and all of the necessities associated with tenant background checks.
The Pros Of Using Apartments.com
The pros of using Apartments.com include, but are not limited to:
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Great tenant screening services
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Online rent collection platform
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Screening tools designed for professional property managers
The Cons Of Using Apartments.com
The cons of using Apartments.com include, but are not limited to:
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Pricing is not available online
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Customer support is lacking
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More geared towards professional property management companies
MyRental
As its name suggests, MyRental is a tenant background check service that enables landlords, real estate agents, and property managers to identify quality tenants. MyRental’s services include everything a landlord could need when screening tenants: credit reports, tenant scores, eviction history, and background checks.
The Pros Of Using MyRental
The pros of using MyRental include, but are not limited to:
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Affordable plans with optionality and an entire suite of features
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Various payment options for landlords and tenants
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Vast library of data spanning billions of records over more than 50 years
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Seamless application process
The Cons Of Using MyRental
The cons of using MyRental include, but are not limited to:
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Premium plan requires credit consent
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MyRental is relatively costly
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Landlords are liable for payment under the Basic package
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No free trial
RealPage
RealPage is a tenant background check service that’s trying to bring the industry into the twenty-first century. Most notably, RealPage offers a more predictive model that utilizes artificial inelegance (AI) to transcend traditional metrics. Through the use of AI, RealPage claims its algorithm can provide tenant screening and background checks and determine a renter’s future ability to pay rent.
The Pros Of Using RealPage
The pros of using RealPage include, but are not limited to:
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A vast library of educational material
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Algorithms with predictive modeling
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Rent payment history database
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Instant reports and quotes
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Fair Credit Reporting Act compliant
The Cons Of Using RealPage
The cons of using RealPage include, but are not limited to:
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Online pricing not available
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AI algorithms don’t use some traditional metrics
What Can A Tenant Background Check Tell You?
Rental properties, or at least their ability to award savvy investors with reliable income, are only as dependable as the tenants living in them. The importance of tenants, for that matter, can’t be overestimated. Truly great tenants can turn a good rental property into a great one. On the other hand, poor tenants can ruin the prospects of profitable assets. It is, therefore, in the best interest of today’s passive income investors to vet those they intend to live in their homes accordingly. Investors may simultaneously mitigate risk while avoiding the headaches that have become synonymous with poor tenants. A proper background check should help investors vet their tenants accordingly and help them pick the best renters for their property.
There are, of course, certain qualities—both tangible and intangible—landlords may not discriminate against. State laws prohibit landlords from discriminating against tenants based on race, religion, and gender—among other things (and rightfully so). However, certain aspects of a background check may reveal red flags, each of which you need to pay special consideration to.
The items included on a typical tenant background check include, but are not limited to:
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Criminal Records
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Credit Reports
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Proof Of Income
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Previous Landlord References
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Eviction History
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Employment History
Information gleaned from a tenant credit and background check could prove invaluable. At the very least, the resulting information will help investors make an informed decision as to who will occupy their property. Of course, to vet tenants accordingly, investors must follow the appropriate steps.
How To Run A Tenant Background Check
Even the best tenant background check isn’t guaranteed to catch every red flag. Nonetheless, investors need to know how to screen renters. A simple tenant background and credit check will often reveal everything there is to know about a pending applicant, which awards investors the greatest asset of them all: peace of mind. For detailed information on how to run a tenant background check of your own, please refer to the following steps:
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Gather The Appropriate Information
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Execute The Appropriate Checks
How To Gather The Appropriate Information
The best background check for landlords begins with gathering the appropriate information. After all, how can you expect to run a tenant background check without the necessary criteria? Here’s how you go about gathering the information you need to run a background check on tenant applicants:
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Require Tenants To Complete An Application: First and foremost, you’ll need to acquire a legitimate rental application. If you don’t have one already, you should be able to get one at your local real estate association or even with a quick search online. Not surprisingly, the application should furnish investors with all of the necessary information they will need to conduct a thorough tenant background check. However, the application should ask several important questions that have become ubiquitous with background checks. Personal information, personal references, banking and credit inquiries, proof of income, and past living arrangements are just some of the topics the application should touch on. Once you are certain you have an application that asks all the right questions, request each applicant to fill it out.
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Request Credit Report Authorization: To legally gather the impending applicant’s credit information, investors must ask for permission to run a credit check. The Fair Credit Reporting Act (FCRA) requires landlords to ask for permission to run such a credit check, so be sure to have a completed credit report authorization form before obtaining an applicant’s credit report.
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Interview The Applicant: I highly recommend conducting your own interview. The applicant is someone that you’ll deal with on a regular basis, whether it’s collecting rent or discussing maintenance concerns. You will want to make sure you have a good idea of who your income will depend on.
How To Execute The Appropriate Checks
Once you have collected the necessary information, you may proceed to run the tenant credit and background check. Here’s how:
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Obtain Credit Report: Use one of the major credit reporting bureaus (Experian or Equifax) to run a credit report check. You’ll be given insight into an applicant’s ability to remain financially reliable and stable. More importantly, you should be able to identify any reason their financial situation may be a cause for concern. However, it is worth noting that you must send an applicant an “adverse action” letter if you deny them because of any negative information on their credit report. The letter needs to inform them of three things: the reason you rejected them, the name and address of the agency responsible for identifying the negative information, and the applicant’s right to obtain a copy of the report.
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Pull A Background Check: Use a verified tenant screening company to run a background check on the applicant. Verified background checks will shed some light on an applicant’s criminal record, rental history, etc. A tenant background check will help you find those who have demonstrated a propensity to be good renters. According to the aforementioned FCRA, an approved Consumer Reporting Agency must do the background check. Contact the Consumer Finance Protection Bureau for a list of agencies you may choose from.
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Talk To The Applicant’s Employer: Using the information provided on the original application, proceed to contact the applicant’s employer on record. In doing so, make sure you confirm both the employment status of the individual and their stated income.
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Talk To The Applicant’s Previous Landlords: Previous landlords may serve as the best source of information for anyone looking to run a tenant background check. If for nothing else, previous landlords can offer first-hand accounts of how the applicant was to work with. Ask questions that will give insight into how good of a renter they will be. This is your chance to learn if they paid rent on time, how they treated the property, and whether or not they were easy to work with.
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Follow Up With Personal References: Do not forget to consult with the personal references on the initial application. While often biased, personal references can award inquisitive landlords with some good information. The right questions could easily tell investors about their character, demeanor, and manners.
Summary
Ensuring your rental properties are inhabited by the best tenants is of the utmost importance, and nothing grants today’s investors with more peace of mind than a proper tenant background check. Understanding how to screen renters and translating the findings into actionable steps will go a long way in placing the right renters in your homes. Then, and only then, will a rental property become a truly great investment.
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