According to a UK survey, 90% of the time landlords pay for property damage. This is despite the fact that tenants are responsible for the damage. So the research encourages property owners to create a stringent inventory process to avoid such financial losses.
Thorough background checks ensure that the people you allow into your property won’t cause problems or create unsafe situations for future guests. But how far back should these checks go to be effective without crossing the line into unnecessary invasiveness?
Understanding the balance between gathering enough information and respecting guest privacy is key. Too little information, and you could end up with risky guests. Too much, and you might alienate people who feel over-scrutinized.
Criminal History Checks: What’s Relevant?
Criminal history checks are a common part of the guest screening process, but how far back you should look depends on the type of crime and how it might affect your rental.
Recent Offenses:
For violent crimes, drug offenses, or any sort of property damage, it’s essential to go back at least seven years. These types of crimes suggest potential risks for your property and other guests. Anything more recent than seven years should raise a red flag, but even older offenses can be worth considering depending on severity.
It’s important to weigh these factors against the nature of your rental. For example, if you manage a luxury property, you may have higher standards for guest behavior and might not accept any violent or property-related crimes, no matter how long ago they occurred.
Non-violent Crimes:
For non-violent crimes, such as misdemeanors, you might opt for a shorter lookback period. Three to five years could be reasonable, depending on the type of infraction. Non-violent crimes often pose less of a direct threat to your property but may still be relevant if you’re worried about repeat offenses or a pattern of troubling behavior.
Juvenile Records:
Many criminal records from a guest’s youth may not be accessible depending on local laws. Even if they are, consider whether holding someone accountable for actions they took as a minor is fair or relevant to your business. A general rule of thumb is to prioritize recent adult records over older or juvenile ones, as they more accurately reflect current behavior.
Also consider that some local councils are proposing laws to ban criminal background checks, which they believe are too restrictive and unfair.
Credit History: How Much Weight Should It Hold?
Credit history can tell you a lot about someone’s financial responsibility, which directly impacts their likelihood to follow through on rental payments, treat your property with care, and not leave you with damages or unpaid bills.
However, financial struggles can happen to anyone, and past issues may not reflect a person’s current situation. This is where the timeline matters.
The Seven-Year Rule:
Just like with criminal checks, the seven-year rule is common in credit history checks. This includes bankruptcies, defaults, and other major financial issues. Many property managers consider seven years a fair cutoff, as it’s long enough to show whether someone has improved their financial habits or if they are still struggling.
Recent Financial Behavior:
While older credit issues may not be relevant, recent patterns of financial instability—such as missed payments or evictions in the last two to three years—should be flagged. A recent eviction is a strong indicator that the guest might not respect your rental agreement.
Ultimately, whether a past financial issue should disqualify a guest comes down to judgment. If a guest had financial troubles more than five years ago but now shows steady income and a clean record, they may be a safe bet. On the other hand, someone with very recent issues might not be worth the risk.
Patterns in Guest Behavior: What Should Stand Out?
Beyond criminal and financial background checks, it’s essential to look at the broader picture of a guest’s behavior, especially repeat offenses or patterns over time. Someone with a one-time incident several years ago might not pose a significant risk, while a guest with several smaller offenses might indicate someone who doesn’t respect rules or boundaries.
Check for Recency and Consistency:
If you see a recurring pattern—whether it’s multiple run-ins with the law, repeated financial issues, or constant complaints on their rental history—it’s a clear sign they may not be the right fit for your property. Patterns are often more telling than isolated incidents.
Consider Guest Age and Time Passed:
A guest who committed a minor offense 10 years ago in their early twenties may not be the same person today. On the other hand, someone with a history of incidents over the last decade shows a continued pattern of behavior that’s less likely to have changed.
How Long Do You Keep Guests’ Records?
Another important aspect to think about is how long you keep records of guests’ past stays and behavior. Should you retain records for every guest indefinitely, or is there a limit?
Two-Year Minimum:
As a best practice, most property managers keep records for at least two years. This includes any red flags, complaints, or damages related to the guest’s stay. If a guest requests to book again in the future, this gives you a solid amount of information to determine whether you want to accept them.
Five-Year Threshold:
For guests with significant issues, like property damage or violations of house rules, you may want to retain their records for up to five years. If someone caused major problems during their stay, five years is a good timeframe to ensure their behavior has improved. After that, it might be time to reconsider whether to give them a second chance or to permanently block their ability to book with you.
Background Check Regulations: Staying Within the Law
No matter how thorough you want your background checks to be, it’s essential to ensure you’re complying with local laws and regulations. The Fair Credit Reporting Act (FCRA) in the United States limits how far back you can look into someone’s credit and criminal history in certain situations. Many states also have their own rules around background checks, such as restrictions on using older criminal records.
To avoid legal issues, always make sure your guest screening process aligns with local laws. This could mean consulting with legal experts or using a third-party service that specializes in compliant background checks for the short-term rental industry.
Automated Tools To Streamline the Process
When running background checks, it’s easy to get bogged down in the details. Manually reviewing each guest’s criminal history, credit report, and overall behavior can be time-consuming, especially if you’re managing multiple properties.
Automated systems like Autohost can help streamline this process, ensuring you get a thorough background check without all the hassle. These systems can quickly flag potential issues based on criteria you set, such as the types of crimes or credit issues you’re most concerned about. This allows you to focus on what matters most—running your business—while still keeping your property safe.
Final Thoughts on Finding the Right Balance
Ultimately, how far back you look in a rental background check comes down to finding a balance. You want to gather enough information to protect your property and ensure a smooth guest experience, but without making it overly invasive.
The key is to focus on recent behavior, patterns, and major offenses while also considering the guest’s overall history. With the right tools and approach, you can significantly reduce the risk of bad bookings while maintaining a fair and respectful process for your guests.