Decoding Rental History: A Landlord’s Deep Dive

How do you truly look at rental history? It’s more than just glancing at a list of addresses and dates. It’s about weaving a narrative, understanding patterns, and assessing risk. You need to consider multiple facets: verifying information, interpreting behavior, and predicting future tenancy. It involves cross-referencing applicant-provided data with third-party reports, contacting previous landlords with insightful questions, and using your experience to read between the lines. It’s about forming a holistic view to make the most informed decision possible.

The Art and Science of Rental History Analysis

Analyzing an applicant’s rental history is both an art and a science. The “science” involves the factual data—addresses, dates, rental amounts, and credit reports. The “art” lies in interpreting that data and using your intuition to understand the story it tells.

Verifying the Information

First and foremost, verify every piece of information provided by the applicant. This includes:

• Addresses: Ensure the listed addresses are valid and correspond to the dates provided. A simple Google Maps search can often flag discrepancies.
• Landlord Contact Information: This is crucial. Don’t rely solely on phone numbers provided by the applicant. Try to independently verify the landlord’s information. A property management company’s website or a quick search on county property records can often provide alternative contact details.
• Dates of Tenancy: Cross-reference these dates with the applicant’s employment history. Unexplained gaps or overlaps can be red flags.
• Rental Amounts: While this can be trickier to verify directly, look for consistency with market rates for similar properties in those locations at the time. A sudden jump in rental amounts without explanation could indicate inflated information.

Contacting Previous Landlords: The Golden Standard

This is arguably the most important step. A thoughtful conversation with a previous landlord can reveal invaluable insights. Remember to prepare a list of targeted questions:

• Did the tenant pay rent on time and in full? A simple “yes” or “no” isn’t enough. Probe for specifics: “How often were there late payments? Were there ever any NSF checks?”
• Did the tenant maintain the property in good condition? Ask for examples of any damage beyond normal wear and tear.
• Were there any noise complaints or disturbances involving the tenant? This can be a strong indicator of potential problems.
• Did the tenant follow the terms of the lease? Inquire about any violations, such as unauthorized pets or subletting.
• Would you rent to this tenant again? This is the ultimate question. Pay close attention to the tone of the response. Hesitation or qualifications can be just as telling as a direct “no.”
• Reason for Leaving: Understanding why the tenant left their previous residence helps in assessing long-term stability. Was it for a job relocation, a family matter, or something more concerning like eviction?

Reading Between the Lines: Interpreting Patterns

• Frequent Moves: A pattern of short-term tenancies (less than a year) at multiple locations might suggest instability or a tendency to break leases. Dig deeper to understand the reasons behind these moves.
• Gaps in Rental History: Unexplained gaps can raise questions. Ask the applicant directly about these gaps. They might have lived with family, traveled, or owned a home.
• Inconsistent Information: Any discrepancies between the information provided by the applicant and what you uncover through your verification process should be addressed immediately.
• Credit Report Insights: A credit report provides a snapshot of the applicant’s financial responsibility. Look for patterns of late payments, collections, or bankruptcies. However, remember that a credit report is just one piece of the puzzle.

Legal Considerations

Always be aware of fair housing laws and avoid discriminatory practices. Treat all applicants equally and base your decisions solely on legitimate, non-discriminatory factors related to their tenancy history. Document your decision-making process carefully to protect yourself from potential legal challenges.

FAQs: Rental History Demystified

Here are some frequently asked questions to further clarify the process of analyzing rental history:

1. What if an applicant has no rental history? Everyone starts somewhere. Consider alternative factors like employment history, credit score, and references. You may require a larger security deposit or a co-signer.

2. How far back should I look at rental history? Generally, looking back 5-7 years is sufficient. More recent history is typically more relevant.

3. Can I deny an applicant solely based on a low credit score? No. A low credit score can be a factor, but it shouldn’t be the sole reason for denial. Consider the overall picture and the applicant’s explanation for the score.

4. What are some red flags in a rental history? Evictions, consistent late payments, property damage, lease violations, and negative references from previous landlords are all major red flags.

5. Can I charge an applicant for running a background check? Yes, in most jurisdictions, you can charge an applicant a fee to cover the cost of a background and credit check, as long as you comply with all applicable laws and regulations.

6. What if a previous landlord is unresponsive? Document your attempts to contact the landlord. Consider weighting other factors more heavily in your decision.

7. How can I verify employment history? Request pay stubs, W-2 forms, or contact the employer directly (with the applicant’s permission).

8. What if an applicant only lists personal references? While personal references can be helpful, they are less reliable than landlord references. Insist on contacting previous landlords if possible.

9. What should I do if I suspect an applicant is lying on their application? Confront the applicant directly. If they are unable to provide a satisfactory explanation, it’s best to deny the application.

10. How do I stay compliant with fair housing laws when evaluating rental history? Treat all applicants equally, use consistent screening criteria, and avoid making decisions based on protected characteristics such as race, religion, or national origin.

11. Is it legal to ask about an applicant’s eviction history? Yes, it is generally legal to ask about eviction history, but be mindful of local laws that may restrict how far back you can inquire or how you can use that information in your decision-making process. Some jurisdictions have “ban the box” laws that limit inquiries into criminal or eviction history.

12. What are some resources available to help me screen tenants? Several online services provide tenant screening reports, including credit checks, background checks, and eviction history. Some popular options include TransUnion SmartMove, RentPrep, and Experian Connect. Always ensure that any service you use complies with the Fair Credit Reporting Act (FCRA).

By carefully considering these factors and asking the right questions, you can effectively analyze an applicant’s rental history and make informed decisions that protect your investment. Remember that thorough due diligence is key to finding responsible and reliable tenants.