Sept. 6, 2019
In the rental industry, you’ve probably heard operators and fellow property managers throw around the term “background check.” Typically, this is used as an umbrella term that includes different types of information searches. These searches are particularly prevalent among long-term rentals where the rental agreement is a bigger commitment, and untrustworthy tenants are far too costly. To protect themselves, long-term rental companies perform deep background checks, which include verifying a potential tenant’s identity, checking their credit score to make sure they’re in good standing, calling employers to confirm their employment history and yearly income, requesting bank statements to make sure they can afford the rent, finding out where they currently live and why they’re moving, calling former landlords to get a sense of whether they’re an agreeable tenant, and, if they’re really serious, a criminal record check.
This extensive list requires a huge time investment, additional costs ranging from $20 -$50 per person, not to mention consent from the potential tenant and the assistance of multiple external sources, like employers, landlords, and the police in the case of a criminal record check. While it would be ideal if short-term rentals could operate at a similar level, the industry is often too fast-paced to go to these lengths. With such frequent turnovers, you have to rely heavily on information provided by the online travel agencies (OTAs), which is limited to the guest’s name, date of arrival, length of stay and other non-personally identifiable information.
That’s why it’s important for short-term rental companies to perform their own version of a background check, one designed for the hospitality industry. Short-term rental companies should have a streamlined process to properly screen guests, set house expectations and collect personally identifiable information that abides by all privacy laws. In doing this, you need to verify the guest's ID and payment method, research the guest's booking history and gather pertinent trip details, such as where the guest is travelling from, the reason for their stay and how many guests will be joining them.
This will help you avoid dealing with situations like a 20-person party, a trashed unit and your cleaner quitting on you mid-day because they’re overworked and tired. By verifying the guest’s identity and ensuring they’re exactly who they say they are, you can avoid these risky reservations and protect yourself against rule violations, parties, loss of revenue, property damage, credit card fraud and identity theft.
But even with the guests that do pass the screening process, it's still important to set expectations. This will ensure that there's no room for any misunderstandings. Property managers should have guests review and agree to all of the short-term rental's house rules, holding guests accountable for their actions. Guests who violate the rules should be evicted; no questions asked.
In the short-term rental industry, guest screening is the only way to protect your properties. It’s also our duty as operators to rent responsibly, thereby keeping our neighbourhoods and communities nuisance- and disturbance-free.
Running a full background check on your guests, much like a long-term rental, is too costly and complicated for the short-term rental operator. So, next time a property owner inquires about background checks, set the record straight. Responsible property management companies perform accurate, systematic and fair screenings of guests because that’s the non-intrusive, legal and non-discriminatory way to guard your operations. With proper and responsible guest screening, your neighbours, building staff and communities will thank you.