Notes on Background Checks

[Jim K.]

I handle the bulk of my own local background checks for free, although when I get a good-looking applicant who has spent a significant part of their lives somewhere else, I use and highly recommend TransUnion SmartMove. That doesn't actually happen all that often. Here in the Burgh, we have a local computerized court records system for the county and we also have the PA Unified Judicial System Web Portal. This is an insular city -- most people, especially the kind of C-class tenants I rent to, are born here and spend almost all their lives right here in this county. Their court records: family, criminal, marriage, property, traffic -- are all online and all free for anyone to look at.

It's not difficult to learn about docket sheets and case summaries, but when you do, a wealth of eminently useful information opens up to you. Good tenant vetting is at least 75% of the whole game of making money in C-class. With online public information and a careful social media search, you can build up a nuanced profile on a potential applicant or person you're considering putting on your waiting list very easily.

To be clear: in the kind of C-class long-term properties we rent out, we are NOT LOOKING FOR people with exceptional credit and perfect track records. While you will actually find quite a few of these people down in C-class, they're often careful with their money and upwardly mobile to the point where they won't stay with you for six, seven, eight years at a time. They won't log those years of turnover-free rent that are the key to making long-term C-class rentals profitable. What we look for are people with forgivable records who are trapped by one circumstance or another in their current living or financial situation. Those are your moneymakers. Something is holding them back and keeping them right where they are financially and personally.

Another huge part of this is the kind of job they have. I LOVE renting to long-term health care workers, and actively work to find new people in the field to place in my properties. The US health care system does a superb job of educating, monitoring, and reporting on the people who work for it. If someone can survive five years in the same position in the same facility, they're invariably more reliable as a tenant than other people with similar income. What their record was before their employment, who they're living with, what troubles they've seen from previous landlords -- none of that ever ends up really mattering next to some solid years working in health care.

Now again, there is very much a time and a place for TransUnion SmartMove. I've used the service and I believe in it. But it doesn't give you the wealth of information and nuance that really makes the difference in picking the right tenant for a long-term C-class property in a city where no one ever goes anywhere else. It will get the basic job done quickly and cheaply, weed out seriously problematic potential tenants, especially if you have your tenants pay for their own background searches. But it won't help you find what I've defined here as the best people to rent to in C-class.

If your goal is to build up a tight little long-term portfolio for your retirement, as ours is, you might want to investigate what you can learn about potential tenants through free local public records.