Pre-screen Tenants or it will cost you!

I saw the movie Pacific Heights, in 1990, about a young couple ( Melanie Griffin and Mathew Modine) who bought a large house in San Francisco. They planned to renovate it, live in part of it, and rent the rest to cover their own living costs. A prosperous looking tenant (Michael Keaton) moves in but never pays any rent, drives the other tenants away and systematically ruins the house and the lives of the owners.

I remembered this movie recently as my neighbor, who lived a few houses away, had a tenant trash his house and left owing him three months rent.

His issue, as with many landlords, was not pre-screening tenants. Landlords want prospective tenants to move in quickly. Don't fall into that trap. Remember this, it is harder to get people out than in some times. You must make sure your tenants are the type of people who you would like to have a long term relationship. When selecting tenants to rent space in your commercial properties, make them fill out an application form. Check their credit, employment and rental history. It will cost you something, but will save you a lot in the long run. Do not take any deposit money from them until you are satisfied with their background. It is more expensive to use the sheriff to evict a bad tenant than to let it sit empty for a couple of months.

I want to sell you commercial properties, but unless you are going to use all of the the space for yourself or your company, then you will rent to people you do not know. So let's crunch a few numbers so you know what a pre-screening will cost.

There are many companies that can do these things for you. If you are going to be doing a lot of rentals, you should form a relationship with one so you get a flat rate. A simple internet search gives you a smorgasbord of services and prices. You can get complete searches for $34.95, National Criminal checks for $15.95. People Search for $9.95 and General Background checks for $19.95. For $50 you get: Nationwide Tenant Background Check which includes, SSN Verification, Address History, 7-Year National Criminal Database Search, Courthouse Verification of Criminal Database Records, National Sex offender Registry Check, all covering 43 states and the District of Columbia, including courthouse verification of all potential records associated with the subject. Including SSN verification, address history, a nationwide National Sex Offender Registry, and options to add a Federal Criminal Search, Education Verification, and Employment Verification.

So as you can see, it's only a few dollars, but it could save you a lot of money and aggravation down the road.  (by the way the movie is rated R and has lots of violence....so it's not for everyone.)