You've probably heard it a million times, but you'll hear it again; investments are risky. This is no different when you invest in real estate.
However, real estate is a more attractive investment in Schaumburg, Illinois, because it's not as volatile as other investment vehicles. Still, you need to protect yourself from risk as a rental property owner.
The biggest risk is having a bad tenant, which is why you should always conduct a tenant background check. Keep reading to learn the importance of tenant screening.
Importance of a Tenant Background Check
There are key reasons why you should always conduct a tenant background check on a rental property applicant. Screening can secure your investment, offer you peace of mind, and provide comfort and safety to other tenants.
Tenants are a risk you take on as an investment property owner. To mitigate your risk, you can conduct an Illinois tenant background check to see if the applicant is who they say they are, at the very least.
Tenant screening will uncover the following:
- Rental history
- Credit history
- Employment verification
- Bankruptcy search
Specifically, a criminal background check for tenants will uncover their criminal history. You can retain tenants by keeping the property safe with this type of screening.
Tenant Screening Laws in Illinois
Schaumburg landlords need to follow tenant screening laws from the state of Illinois. These are the basics to know:
- The application fee is non-refundable
- There is no limit on how much you can charge for application fees
- There's no limit on what you can charge as a security deposit
An application fee differs from a security deposit and is collected at different times. An application fee covers the cost of tenant screening. A security deposit protects the landlord against damages to the property once the tenant starts living there.
Most Common Screening Mistake
The best tenant screening service will ensure that you comply with state laws, but it's up to you to avoid this common screening mistake. Before you can complete a background check on a tenant, you need to get their consent.
Consent should be in writing and can be included as a provision on the rental property application. Without consent, you cannot legally investigate the tenant's background.
A rental property management company can help you create a legally binding document with a section about background checks. In this section, include that the application fee is non-refundable to avoid disputes in the future.
Let Rental Property Managers Help
A tenant background check is the ideal way to see if an applicant is a good fit for your rental property. With the help of a property management company, you can screen tenants while staying compliant with the laws.
PMI Chi-Town helps Schaumburg, Illinois, landlords like you transition from struggling owners to profitable ones, starting with tenant screening.
With over 20 years of local experience, we know the importance of treating your investment as our own. We can help you grow by finding quality tenants and persuading them to stay.
Contact us today to learn more about our beneficial services.
