Rental Verification: What Is It and How to Do It?
As a landlord or property owner, it’s essential to know how to provide proof of rental history for each tenant. Tenant screening, or determining a tenant’s quality, is often done through the rental verification process. Checking out what previous landlords have to say about your prospective tenant is a great way to find out how they will act as your tenant.
Below is an easy rental verification guide to follow for your next tenant.
What Is Rental Verification?
So, what is rental verification exactly? As mentioned above, it’s when a landlord contacts a prospective tenant’s previous landlord to verify their rental history. In other words, background checks and credit checks only go so far — talking to a previous landlord will give you a better idea of how high-quality and reliable your future tenant is.
Through rental verification, the landlord has an opportunity to ensure that the information that was provided in the applicant's rental history is authentic. Think of it as a safeguard that they take during the tenant screening process when going through prospective tenants.
The specific timelines of the rental verification process can vary, but on average, it takes a rental property anywhere from 48-72 hours to complete the rental verification process. In the case that the landlord has received more than one application for the same rental property, this process can take even longer to complete.
Why Does Rental History Verification Matter?
Here are some ways that rental verification can assist you:
- Ensure that landlords can make informed decisions about prospective tenants;
- Allows for peace of mind knowing that the tenants will be reliable;
- Helps to protect your property;
- Avoids the risk of potential tenants damaging property or failing to pay monthly rent on time.
Without undergoing this process, there are potential downsides such as:
- Renting to someone who has a previous history of damaging property;
- Ending up with a tenant who doesn't have sufficient income to afford rental payments;
- Renting to someone who has a history of issues such as noise complaints, cleanliness issues, etc.
By looking over the prospective tenant's rental history, it helps to protect yourself from future problems before they have a chance to begin.
How to Verify a Prospective Tenant’s Rental History
Not all landlords are familiar with this process. Even when references are contacted, you might not know how to use them. Verifying tenant rental history can be done in one of two ways. You can either get a reference, meaning getting the potential tenant's previous landlord's contact information directly from them through a rental application, or you can try special software that looks into a rental history report on your behalf.
As a landlord or property manager, here are some ways that you can help to verify the rental information from a prospective tenant.
Step 1: Ask for a Rental Application and Consent
Before moving forward, it is pivotal that you get signed consent from the tenant. In the majority of states, this is required in order to discuss a tenant with their previous landlord due to privacy laws. If tenants are reluctant, try to explain to them your reasoning so they better understand the purpose.
What to Ask for in a Rental Verification Form
Here are some things that you should ask for in this form:
- Questions about rental history such as the length of tenancy, rental payments, and rental verification, and whether there were any complaints or problems;
- Annual income information;
- Job status and title;
- Credit history or a credit report;
- Information on criminal history;
- Eviction records;
- Pay stubs;
- A reference from the current and previous landlords;
- Any history of property damage.
From there, you can verify that the information in the form matches the information from the references.
Step 2: Call the Landlords
Next, you’ll want to get in touch with the landlords who were provided as a reference in the form. If you’re not able to get ahold of them via phone, you can try contacting them via email for information on the tenant. You’ll want to ask questions that help you understand the habits of the tenant and whether or not the tenant would be a good fit for your rental situation. Having this verification can give you peace of mind that you’re moving forward with a responsible tenant who will pay their rent on time and be respectful of your property.
Step 3: Confirm Details with the Tenant
The final step in rental verifications is to circle back with the tenant and confirm this information with them. In the case that the landlord gives you any concerning information regarding tenancy history, you'll want to address this with the client. Although it isn't likely, it's possible that former landlords are lying about the tenant as they're unhappy with the tenant leaving the property.
In this situation, most landlords follow their gut. Simply asking a few questions to either party can make it clear whether or not you're entertaining a potentially bad tenant.
What If a Tenant Doesn't Have a Rental History?
There are a handful of reasons that a tenant might not have a rental history. He or she might be new to the area or they have always lived with their parents up until this point. In other scenarios, they might have been living in temporary accommodations such as in a hotel.
In the case that there's no history:
- Ask for references from employees or other personal references that can back up the character of the tenant and their background;
- Run a credit history check to see if there are any underlying financial issues that should be noted as these could impact the ability to pay rent on time;
- Require a larger security deposit (if possible) to help cover yourself if there are any significant issues with the tenant during your stay.
Even without access to a formal residential history or an official tenant background check, it's important to know that your tenant won't cause issues and can consistently pay rent.
Rental verification is a simple step in the leasing process that will undoubtedly save you time, money, and many headaches in the long run. Their previous landlords are a great source of information regarding your possible tenant, and with their experience, you can feel more confident in their reliability and care.
If you are worried about finding the right tenants for your property, consider turning to an expert real estate company to take the job off your hands. The professionals at 33 Realty have the experience and knowledge of the industry to help you tackle any leasing issue that. Contact us at 33 Realty today!