There are two types of applicant background checks that you truly must avoid like the plague if you want to be a successful housing provider for very long.
By Scot Aubrey
Variations of the phrase “avoid like the plague” have been in use for more than 400 years. It has become synonymous with staying away from something as much as possible.
In recent years, we could adopt a new phrase, “avoid it like COVID.” No matter how we use it, when it comes to performing background checks on your new potential tenants, a necessity of our current times, there are two types of background checks that you truly must avoid like the plague if you want to be a successful housing provider for very long.
No. 1: The Applicant Background Check You Do Yourself
With an ever-increasing crime rate and the ability for people to steal another’s identity or change their own, these chameleon types should put you on notice.
You excel at investing and managing properties, and that should be good enough for you, so why then do so many of our fellow housing providers take it upon themselves to also perform background checks?
My advice is to stay in your lane and let the experts handle things. I’ve heard countless times that people just “trust their gut” when it comes to doing background checks. They rely on their investigative questioning and have full faith and confidence that the applicant is providing them with correct information.
Guess what? Your “gut” can be wrong, and lie to you just as much as your applicants do.
Applicants, especially those who have been recently evicted or have something to hide, are masters of disguise and put their best face forward when it comes to meeting you and viewing your property.
You might be tempted to pepper your applicant with personal question, but beware: Becoming too familiar with the personal life of an applicant brings compassion into the equation… which is no good (especially when they tell a good story).
Lastly, you lack the real tools of an investigator who can receive and confirm proper ID, date of birth and Social Security numbers. Remember, desperation drives creativity, and if someone is desperate enough, they will pull out all the stops to get into your property – and then they may be hard to get out.
No. 2: The Instant Applicant Background Check
Contrary to what a marketing department tells you, there is no “instant” database that holds all current records.
At best, you may be accessing 50% of available data, and that doesn’t guarantee accuracy or completeness. Instant databases gather information from public sources and aggregate it into a single searchable source.
They do not update every second; rather, they update every other month or quarter.
Wouldn’t you want to know if your applicant had a criminal conviction last week, or even yesterday? Or if they are currently in the middle of an eviction?
Of course you would, and you just can’t have that kind of certainty with an instant report. With the recent rise in stories of serial squatters in the news, having a complete, in-depth look at your applicant can help you avoid this alarming trend.
Also, if an instant report says “no records found,” it does not mean that the applicant doesn’t have a criminal history. It just means that they did not find any records in their particular database.
As a professional housing provider, trying to save money by doing one of these types of background checks is not worth the low – and often not so low – price.
In almost every market I know of, the applicant pays, so why expose yourself to the risk? This is one plague that you can and should avoid at any cost.
About the author:
Scot Aubrey is vice-president of Rent Perfect, a private investigator, fellow landlord and cohost of the Rent Perfect Podcast. Subscribe to the weekly Rent Perfect to stay up to date on the latest industry news and for expert tips on how to manage your properties.
