All Forum Posts by: Carlos Hennings

Not all background checks are the same!

When choosing a screening service, make sure it covers:

• Credit Report – Looks at payment habits and financial responsibility.

• Judgments & Liens Search – These don’t show on credit reports anymore but can uncover unpaid debts.

• Nationwide Eviction Search – Past evictions are a big red flag.

• Nationwide Criminal and Sex Offender Search – Helps spot any serious legal issues.

• Income Verification Report – Pulls real bank deposit info instead of relying on pay stubs.

Yes, it is standard practice to have the applicant cover the cost of their background check. Just be sure to use a service that provides a thorough and comprehensive report, rather than a basic surface-level check. Having accurate, detailed information is critical when deciding who you are entrusting with your property.

This is becoming more and more common. Many larger property management companies are refusing to provide rental verifications, and even when they do, the information can often be incomplete, inaccurate, or subjective. On top of that, there’s always the risk of an applicant having a friend or family member pose as a prior landlord—something we see more often than you’d think.

Another important thing to remember: rental verifications can be very subjective ("good tenant" to one manager might not mean the same thing to another). Relying on these calls opens you up to inconsistent decision-making, and can even create risks around Fair Housing or discrimination claims.

Instead of relying too much on rental verifications, I'd recommend focusing more on verifiable facts through a complete screening report that includes:

🔹 Credit Report – Reviews overall financial responsibility, payment patterns, and open accounts.

🔹 Judgments & Liens Search – Identifies court judgments or unpaid debts that no longer show up on traditional credit reports.

🔹 Nationwide Eviction Search – Flags any prior evictions that may not have been disclosed or mentioned during a landlord call.

🔹 Nationwide Criminal and Sex Offender Search – Provides a broader view of any criminal background or offenses across multiple states.

🔹 Income Verification Report – Pulls actual deposit data directly from the applicant’s bank account history to confirm real income (much better than chasing pay stubs or letters that could be manipulated).

By leaning more on verified, factual data instead of subjective rental references, you can make safer, more consistent decisions while protecting yourself against claims of unfair screening practices. Always better to rely on what you can document and defend.

The challenge with using AI for tenant screening is that the results often aren’t as accurate as you'd expect. That’s because there are strict reporting laws that limit what screening companies can legally include. If certain details are missing from a record—due to how it was filed or how it’s accessed—the report might come back clean, even if something exists.

Screening providers aren’t liable in these cases because they’re bound by federal law. For the most accurate results, you need a provider that can tap into multiple data sources and, when needed, manually call the court to verify and capture missing info—something AI simply can’t do right now. It sounds fast and efficient, but once you understand the regulations in this industry, the limitations of AI screening become clear.

Are your entitlements being directly deposited into your bank account? If so, your bank statement(s) would reflect this income. 

Great question—and you're definitely not alone in dealing with these kinds of challenges when leasing commercial space to individual business operators.

Yes, you can and absolutely should screen these tenants, both as business entities and as individuals. In cases like yours—where tenants operate through small companies—it’s important to screen both the business and the person behind the business to get a full picture of risk.

Here’s a best-practice approach:

1. Run a Commercial Credit Report on the Business

• This helps assess the company’s creditworthiness, history of financial responsibility, and any patterns of late payments or defaults.

• If the business has limited credit history (common with smaller or newer companies), you’ll want to lean even more heavily on personal screening.

2. Run a Consumer Credit Report on the Personal Guarantor

• Since you’re likely having them personally guarantee the lease, it’s completely appropriate to pull a standard tenant background check on the individual.

• A personal credit report can reveal recent delinquencies, collections, or financial strain that could carry over into the business.

• Also consider running a criminal background check and a separate Judgments & Liens search—these no longer appear on credit reports but can show past legal or financial disputes, unpaid rent, or damages from prior leases.

3. Use Verified Income Reports Instead of Paper Statements

• Paper bank statements, tax returns, or pay stubs are often forged or manipulated. Look for a screening solution that verifies income directly through bank or payroll data.

• This eliminates guesswork and gives you a much more reliable view of their ability to pay.

You're also right to assume that personal financial behavior often reflects how someone runs their business—especially in sole proprietorships or small LLCs. Combining commercial and individual screening gives you the best shot at avoiding the non-payment and lease-break issues you’ve experienced.

If you’re using a screening service, make sure they support both business and individual checks, and that they include things like verified income and Judgments & Liens, which aren’t always standard.

Hope this helps—you’re on the right track in tightening up your process.

Great question—and congrats on exploring the Detroit market!

While I can’t speak to neighborhood selection or property security, I can offer insight specifically on tenant screening, which plays a big role in risk mitigation—especially in areas where the applicant pool may be more varied.

Here’s what a thorough tenant screening report should ideally include:

• ➤ Credit Report – Useful for seeing payment patterns, debt load, and general financial responsibility.

• ➤ Eviction History – A national eviction search can help identify patterns of non-payment or lease violations.

• ➤ Criminal Background Check – Includes national, state, and county-level records, along with sex offender registries (where legally allowable).

• ➤ Judgments & Liens – These are no longer included on any credit report but are still very relevant—especially for spotting unpaid rent or property damage claims filed by past landlords. This data must be pulled from separate databases, and not all screening providers include it.

• ➤ Income Verification – Instead of relying on pay stubs (which are easy to manipulate), look for reports that verify income directly through bank or payroll data. This gives a much clearer picture of the applicant’s actual financial standing.

Not all screening providers include the same depth or data sources, so it’s worth checking that your provider includes all of the above—especially Judgments & Liens and verified income, which are often overlooked but highly valuable.

 Tenant screening is one of the most effective ways to proactively reduce risk from day one.

Great question—and welcome to the world of real estate investing!

Renting to students can be a great strategy in a university town, but it does come with unique considerations. Since many students don’t have established credit or rental history, it’s important to adjust your screening process while still protecting yourself as a landlord.

Screening Student Tenants:

• ➤ Always run at least a criminal background check, including a sex offender registry search. This is essential for safety and due diligence.

• ➤ Judgments & Liens searches should still be run—even if the applicant is young or has limited credit.

  • ⚠️ Judgments & Liens are no longer included in credit reports, so they must be ordered separately.

  • This is especially important with students in their second year and beyond—past landlords may have filed for unpaid rent or property damage, and that won’t show up on a traditional credit report.

Co-Signers:

• ➤ Yes, always get a co-signer for student tenants, ideally a parent or guardian with a strong financial background.

• ➤ Screen co-signers just as thoroughly as the primary tenant: run credit, verify income, and check for any red flags like collections or legal judgments.

• ➤ Do not rely on pay stubs to verify income, as these can easily be faked. Instead, look for a screening company that offers verified income reports using bank or payroll data to ensure legitimacy.

Protections & Lease Considerations:

• ➤ Use joint and several liability language in the lease so each tenant (and co-signer) is responsible for the full rent amount.

• ➤ Set clear expectations in your lease regarding parties, guests, and maintenance responsibilities to protect your property and minimize issues with neighbors.

• ➤ Consider including a clause stating that the lessee and co-signer are responsible for any and all legal and collection fees—this provides additional backup should enforcement become necessary.

Student rentals can be very successful when you have strong systems in place. Best of luck as you start your investing journey!

Congrats on your first investment property! 🎉 That’s a huge milestone.

When it comes to setting tenant screening criteria, having a clear and consistent standard in place is key—not just for finding reliable tenants but also for staying compliant with Fair Housing laws. Here are some commonly used benchmarks and best practices:

Standard Screening Criteria:

• ➤ Credit Score
  Many landlords look for a minimum credit score in the 600–650 range, but what's most important is reviewing how they got there—look out for recent delinquencies, charge-offs, or accounts in collections.

• ➤ Income Requirements
  A common rule of thumb is a 3:1 income-to-rent ratio. Look for a screening company that offers income verification to eliminate the chances of fake or fraudulent stubs, bank statements, etc.

• ➤ Criminal History
  It's best to avoid blanket policies. Instead, consider the nature and age of any offenses. A minor or dated infraction might not be a dealbreaker, while more recent or serious offenses could raise red flags.

• ➤ Rental History
  Prior landlord references, eviction records, and payment history can say a lot. I’d recommend checking for missed payments, lease violations, or property damage claims.

• ➤ Judgments & Liens
  These are no longer included on credit reports, so look for a screening company that offers this data separately, as many do not.

Things to Avoid or Watch Closely:

• Vague or incomplete applications.

• Applicants who push back on screening or try to rush move-in without documentation.

• Over-reliance on credit score alone—always look at the full picture.

Creating a written rental criteria form helps ensure consistency and protects against claims of discrimination. It also makes your decision-making process more transparent and efficient.

Best of luck with your new property! Hope this helps.

Not all background checks are the same. Here's a breakdown to consider when evaluating tenant screening software:

Tenant Screening Components

• ➤ Credit Reports

  •  Typically consistent when pulled from the same bureau.

  •  ⚠️ Judgments & Liens are no longer included in any credit report—these must be run as separate searches.

• ➤ Criminal & Eviction Records

  •  Vary by provider depending on data sources, update frequency, and filtering practices.

  •  Some services offer more comprehensive or nationwide coverage.

• ➤ Identity & Income Verification

  •  Not always included by default.

  •  Some platforms offer automated tools, others may require manual document uploads.

Rental Management Platforms

• ➤ Financial Tracking & Reporting

  •  Look for options that sync with your bank and provide cash flow dashboards and tax reports.

• ➤ Lease Management

  •  Useful features include e-signing, lease templates, and secure storage.

• ➤ Tenant Communication & Maintenance

  •  Portals for rent payments, maintenance requests, and messaging help streamline daily management.

Trying a few platforms via demos or free trials can help you find what fits your needs best. Hope this helps!

So glad you asked this! While many platforms offer background checks, it's important to note that not all background checks are created equal. For example, credit reports may be similar when sourced from the same credit bureau, but other components—like criminal, eviction, judgments & Liens (Which no longer appear on any credit reports) and income verifications—can vary significantly between providers. Differences often lie in how the data is sourced, how frequently it's updated, and how thoroughly it's verified. So while one service might offer a general snapshot, others may offer more comprehensive or customizable reports depending on specific needs.