If you’re a landlord who neglects to conduct background and credit checks on prospective tenants because you’re a good judge of character, consider yourself forewarned.

Relying strictly on a smile and a handshake could be a costly mistake.

Many landlords fail to do a detailed screening of tenant applications.

It’s hard to comprehend that owners will hand over the keys to their hard-earned investment to a complete stranger.

So, if you are a homeowner and are thinking about renting, I suggest you take heed. 

First of all, you need to screen future tenants very carefully if you want to prevent landlord-tenant disputes down the road.

Background checks and credit record searches are one of the best assurances you can do to protect your costly investment.

These checks will protect you against fraud and help minimize the risk of income loss.

It’s not only the headaches involved with dealing with bad tenants, it’s the financial losses you could suffer during the process – losses suffered from court time and uncollected debt.

Many companies require written consent from their employees before verifying employment information.

If the renter is self-employed, you should request tax returns for income verification.

The general rule of thumb is the tenant’s monthly pay should be about three times more than the rent amount. So if the rent amount is $800 per month, the tenant’s income should be at least $2,400 per month.

Moral obligations to your community should be factored into the screening process as well. You don’t want to rent your home to a criminal who has instances of theft or pedophile issues on their resume.

Remember, there are laws and regulations that don’t allow pedophiles to live within so many feet of places where children congregate – places like playgrounds, schools and churches.

Credit checks are an essential part of the tenant-screening process. Credit checks will “red flag” tenants who have been consistently late in their rent. Credit checks can also offer crucial information on a renter’s financial situation. 

When reviewing references, don’t settle with a satisfied last landlord. Call at least two references back, since a current landlord might want to get rid of a difficult tenant. Earlier landlords usually don’t feel this kind of restraint and will give a more honest opinion of the renter.

Make sure an applicant is not using a friend to pose as the former landlord for purposes of recommendation.

Following these simple rules will not only put your mind at ease, but will keep the neighbourhood as it should be – safe and sound.

Frank Fourchalk writes bi-weekly on home and business security for The Peace Arch News. www.yourhomesecurity.ca