A rental history report is an overview of a tenant’s past rental record as a tenant, including any eviction actions and lawsuits. It is part of a complete tenant screening report and is essential to an unbiased screening process that will help you select a responsible tenant. Whether you are a landlord or a property manager, finding a great tenant and rule-abiding tenant is key to your success. Here is how a rental history report can help.
Damaged property, costly eviction, unpaid rent. These are a landlord’s worst nightmare. The last thing a landlord wants to deal with is a bad tenant. Thankfully, rental history reports — an essential part of a thorough tenant screening process — can help you weed out unwanted renters and find the perfect ones for your property instead.
What Is A Rental History Report?
A rental history report is exactly what it sounds like — an overview of a tenant’s past rental record. Rental reports typically include information such as previous addresses, rental payment history, evictions, damages, late payments, and other relevant details. In other words, it’s a document that will give you a pretty good idea about what a potential tenant is like.
Why A Rental History Report is Important
Running a rental history report, also referred to as an eviction report, is a way for you to carefully evaluate a potential tenant. When you review it, you’ll be able to identify any red flags that signal whether or not they will be a good fit. Likewise, you’ll be able to spot tenants who have a positive track record.
A rental history report that checks off all the right boxes is a pretty good indicator that they will be a good tenant, treat your property respectfully, are financially stable, and will likely pay rent consistently and on time.
On the other hand, if the report reveals evidence of past evictions, late payments, or other worrisome details, it’s a sign that you should probably consider another applicant. However, if you feel that the negative marks on a report aren’t reason enough to disqualify a tenant, consider meeting with them to discuss your concerns. For example, a tenant may have been previously evicted because they lost their job and simply didn’t have the funds to continue paying rent.
Rental history reports are significantly important for landlords because they offer valuable insights that help you make informed decisions about which tenants to filter out and which ones will be the most ideal for your property.
Evaluating Rental History Reports
Skimming a rental history report without opting for a comprehensive tenant screening package can cause you to overlook crucial details, and possibly make the wrong decision about a tenant. When you a tenant screening report, here are a few things to look out for:
Assessing the applicant’s credit history will help you gauge whether or not they are financially responsible and will be able to meet their monthly rent obligations. A strong credit history with a good credit score makes a tenant a strong contender. A poor credit history however, may reveal a pattern of financial instability or unpaid debts.
If a rental history report lists evictions, take it as a sign to proceed with caution. Evictions are usually a result of a significant breach of a lease agreement. A rental history report will provide details such as the reason for eviction, legal proceedings, and the outcome of the case. As a landlord, you can use this information to evaluate potential risks, and to make informed decisions about whether or not to accept an applicant.
Ideally, a tenant’s pre-tax earnings should be at least three times the monthly rent, but you can adjust this requirement as needed. To protect yourself, ensure the applicant earns enough to comfortably afford the rent.
A criminal record affects a tenant’s eligibility. If a report shows that an applicant has a criminal background, you can reference HUD’s guidelines and local laws to determine how to handle the situation, and you may decide to disqualify them altogether.
Pay attention to frequent changes of residence, inconsistent application information, and poor landlord references. Any or all of these can mean an applicant is not trustworthy or will be an unstable tenant.
How To Handle Tenants With No Rental History
If a tenant doesn’t have a rental history, don’t let it stump you.
Learn more: Take a Chance on First Time Renters
First-time tenants like college students, Gen Z renters, and Millenials, may very well submit an application with no rental history at all. However, it doesn’t mean you have to disqualify them as a potential tenant.
There are other methods you can use to vet them. You can:
Request Proof of Employment
If there’s evidence that the applicant has steady income, you won’t have to worry as much about them making rent every month. As an extra precautionary measure, it’s wise to contact the listed employer reference to verify their employment.
Ask for Income Tax Returns and Pay Stubs
If the applicant is in fact employed, they should be able to provide proof of income, which can give you a better picture of their financial behavior.
Require a Cosigner or Guarantor
To help mitigate potential financial risks, you can also require the applicant to have a cosigner or guarantor. Doing so will give you an added layer of security, and also peace of mind.
When considering personal references, ask for feedback from coworkers, supervisors, professors, mentors, or other professional connections. Avoid accepting references from an applicants’ family members and friends, since it may introduce biases or conflicts of interest.
Trust Your Gut Instincts
Your initial impressions during the tenant screening process, including how the applicant presented themselves, communicated, and interacted with you, can guide your decision. Trust your intuition and use your best judgment to determine if they will be a suitable option.
Tips For Landlords Before Running A Rental History Report
Let applicants know that you plan to run their rental history report. Clearly communicate with them to tell them it is a requirement if they wish to move forward with the application process.
Rental History Release Agreement
Include a tenant information release form with your rental application. A release form gives you the rights to review their past rental history information. Written consent should be obtained in compliance with applicable privacy laws and regulations.
Alternatively, include this requirement in your initial rental listing. Doing so will encourage applicants to be upfront with any information you request, saving you both time.
Verify The Applicant’s Identity
Before running a rental history report, request official identification documents such as a driver’s license or passport and compare them with the information provided by the applicant. This way, you can prevent potential fraud and ensure that the rental history report pertains to the correct individual.
Use A Reputable Reporting Agency
To ensure accurate and comprehensive rental history reports, choose an agency that specializes in tenant screening services and has a track record of delivering reliable information. Conduct research, read reviews, and consider recommendations from other landlords to identify which agency will best suit your needs.
Fill In Any Tenancy Gaps
Before jumping to conclusions about why there may be breaks in tenancy, ask the applicant about it. There may be a valid reason, for example, they may have decided to move back in with family to save money. Or, it may signal that the applicant has something to hide.
Identifying Responsible Tenants
Whether you’re a seasoned landlord or just starting out in the rental industry, understanding and utilizing rental history reports can greatly enhance your tenant selection process. By making informed decisions based on reliable data, you can create a positive rental experience for both yourself and your tenants.
Remember, rental history reports are powerful tools, but they should be used as part of a comprehensive tenant screening process that includes other factors such as interviews, references, and credit checks. By combining these different elements, landlords can gain a well-rounded perspective on potential tenants and make the best decisions for their rental properties.