Should Landlords Run Background Checks on Prospective Tenants?

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Should landlords run background checks on renters or not?

Background checks are one of the big hurdles for many newer real estate investors — and even some experienced ones. It can be a sticking point, causing paralysis. So can you perform background checks on tenant applicants? Should you? Or is it a waste of time that is killing your occupancy rates and real estate returns?

Background checks are among the list of items that can slow landlords down as they try to fill rental properties. There are decisions to be made on credit, income, and money paid up front, too. Ironically, background checks are the one item that you don’t need to get a mortgage loan. You can take out a $5M mortgage without a background check, even if you’ve had a couple foreclosures in the past. Still, many landlords demand upfront money to pay for a background check on $1,000-a-month rentals.


Related: 3 Sneaky (But Legal) Ways to Screen Potential Tenants

Regulations Surrounding Tenant Screening

The housing industry in general appears to be heading in two different directions on this. You can get a real estate, mortgage, or securities trading license in many places even with a criminal background. According to the application forms from some states, you may even qualify for a license if you are still on probation. In Seattle, regulations are increasingly determining who landlords can accept or deny as tenants and on what grounds. In many places, you may not legally be able to do background checks on employees or take them into account in your hiring decision.

On the other hand, some motels and extended stay hotels have been running background checks on guests. Value Place and Motel 6 are two of them — although it is worth noting that one Rhode Island police department decided to turn down the nightly guest lists being supplied for screening by a motel chain.

Are Background Checks Truly Valuable for Landlords?

What’s the value in running background checks for landlords? The most common reason is to look for past evictions, which is absolutely fair. Others might argue it is to identify people who are likely to cause property damage. Additional concerns may be sexual predators, drugs, and terrorism.

Related: 4 Old School Tenant Screening Tips That Still Hold True For Modern Landlords

I agree with background checks for all these reasons, but the big question is where do you draw the line? At a misdemeanor? A felony? A certain type of offense? If it was yesterday or 10 years ago? A one-time thing or a lifelong rap sheet? It’s also worth considering what happens if your local landlord-tenant laws change to block you from this. What if individuals have paid their dues and done their time? What if it was a bogus case?


Four important things to consider here are:

  1. How does running background checks improve your responsibility as a landlord?
  2. What greater issues might be caused by refusing housing to anyone with past interactions with the law?
  3. How can you avoid discriminating?
  4. What will the impact on your investment property performance be?

Certainly credit and income may be greater predictors of likely tenant performance. In many cases, the truth is that reformed criminals may be better tenants than those who haven’t been caught yet. Landlords may have certain responsibilities to neighbors and other unit residents. You might also consider if a boom in homelessness spur more crime, hurt the community and property values, and rocket local property taxes?

It is your choice to run a background check or not and at least for now, who to accept. Be ahead of the game and make sure your processes don’t break the law. You can’t unfairly discriminate, and you have to know your local landlord-tenant laws. For now, most can come up with a flat and fair policy and run with it. Watch your performance and the laws, and adjust it in writing over time and with market trends.

What about you? Have you had issues with tenants you rented to? What applications standards do you have? Have you ever had issues with tenants who had clean background histories?

Let me know what you think with a comment!

About Author

Sterling White

With just under a decade of experience in the real estate industry, Sterling currently manages over $10MM in capital, which is deployed across a $26MM real estate portfolio made up of multifamily apartments and single-family homes. Through the company he co-founded, Holdfolio, he owns just under 400 units. Sterling was featured on the BiggerPockets Podcast and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single-family investing and apartment investing to wholesaling and scaling a business.


  1. Chad H.


    I totally agree with you one hundred percent that you’ve mentioned. I too run background checks because of those important reasons. I not only consider acquiring creditable tenants to occupy my rental unit, but also put into consideration of the safety and well being of other homeowners and renters that occupy other units. it’s nice to occupy your property get the cash flow or whatnot, but reputation can be lost very quickly if you don’t do your due diligence. Enjoyed your post, great job and great investing.

  2. Kathleen Leary

    FACT: applicants lie.
    Running background checks (potentially) accomplishes two things: one, if the prospective tenant knows you’ll be doing it, they tend to either choose another property or are more up-front with less-than-desirable information. You’ll find out, anyway.
    Two, it’s a verification of what they have already told you – or not!

    And it also tends to weed out folks who KNOW they have terrible credit, evictions, outstanding warrants, etc. They just don’t bother applying. Landlords are always complaining about their horrible tenants, but more often than not, they haven’t done enough due diligence before turning over the keys.

  3. Brad Ter Beek

    My brother (@Brett TerBeek) rents out two SFRs in Colorado Springs. On his most recent vacancy he ran background checks on each of the applicants. One of the applicants claimed he had no evictions and yet the background check revealed that he was evicted from his most recent residence. I know I’ll be sticking with background checks!

      • Brett TerBeek

        Sterling and Brad,

        What an awesome article that I wish I had read when I was going though our first tenant search!

        I couldn’t say enough how important screening and background checks have been to the early stages of our business. The best tool that I have found that is incredibly user friendly has been the SmartMove tenant screening website. Once a written application has been filled out by prospective tenants and they meet the initial standards, I will have them participate in this second stage of the screening process by filling out their information on the SmartMove website. This program checks for previous evictions, credit scores, as well as criminal history for around $12/person. Not only does it perform a robust background check but you also can accept or deny applications through the program. As Brad mentioned, this revealed serious issues in one prospective tenant which immediately precluded the individual from renting our property. I also obviously take a close look at the credit score and credit history and generally like to see a 700, but we can negotiate for a higher security deposit if the credit score is a bit lower than this.

        I would also mention that being in the Colorado Springs area and having a vast population of military families (to include us!) in the area has given us access to an incredibly reliable group of people. Knowing a family is serving in the military can easily allow us to establish an allotment from the tenants LES (leave and earnings statement) in which we are assured that we will receive rent every month.

        Again, great article and thanks for posting!

  4. John Teachout

    I agree that if potential tenants KNOW that they are going to be investigated, it gives them reason to be upfront with info or move on. I tell people what will be looked at, ie, credit history, criminal background, sex offender, rental history, etc. I then ask them if there’s anything that is going to come up that could be an issue. They can save their $30 if I know they wouldn’t be approved.

    I think NOT doing some type of background check is unprofessional and could be considered grounds for legal trouble if one of the un-investigated tenants causes a problem. (the old “should have known/could have known”)
    Everyone needs to make their own decision regarding this but most tenants expect an application fee and I tell them that’s what it’s for.

  5. Jeanette Bartels

    It is important to do background checks on any new tenants. Some will tell you that their credit is not very good and reasons why. What they won’t tell you is any history of eviction or felonies. Another problem I had on my first income property were tenants that are on SSI Supplement and SSA disability. Being nice to people and helping them out don’t always work out. They seemed like a very nice family with a little bad credit due to the husband being laid off a few years back, and now was on SSA disability, including their two kids on SSI. They had enough income coming in per month, and monies to put down for first month and security deposits. After two months, it became a nightmare! How lucky was I to have bad tenants on my very first rental? Ugh!

    They finally moved out 3 months later, so we lost out on 3 months rent. They knew we were going to evict them. We could have taken them to court to get a judgement against them and send the credit reporting agency an eviction against them, but we didn’t. People on SSI Supplement or SSA disability are untouchable and their income is not garnishable like people working. My partner didn’t feel it was worth the cost of court fees and time off work to go to court when they can’t pay you back. Yes, it would have been great to place a blemish and eviction on their credit report, but we didn’t. After that, the tenants we found were good tenants. No complaints!

    So, if you rent to people with SSA disability and SSI, BEWARE!!! You can be ripped off!

  6. Tenant background checks are the only way to predict the potential for tenant payments and potential tenant damage to your property. If you think of renting as loaning someone you don’t know money (which is actually what you are doing), you will run a background check every time.
    Even better than a standard background check, using a company that screens your tenants and offers a rent payment guarantee, is a big step in eliminating the risk in renting real estate.

  7. It is vital to perform these checks on prospective tenants. How can you rent your place to someone without conducting a background check. You could potentially be renting your place to a criminal or someone that is bound to default on rent. I would never take that sort of risk. Another good read on this is 

    I actually use that website quite frequently, it costs me about 20 dollars to run a thorough background check. It just makes sense! I’d advise any land lord to do the same.

  8. Solomon Johnson

    Answering on the main topic question, I would definitely say “of course” because renting nowadays without background checking your prospective tenants is comparable with eyes closed driving. But somehow, I agree with the editor and others that background check gives you an opportunity to filter all tenants, but in any case doesn’t give a guarantee that you will get your payments in time and have no damage. Considering the fact, that TBC is mostly free these days, ignoring this feature – is a great mistake for landlords! Also, here another interesting articles on this topic, that I’ve found similar to this one:

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