The best rental application will protect the landlord by helping them to figure out if a tenant is financially and socially stable.
The application will ask the prospective tenant for a lot of personal information, such as full name, address, social security number, and more. A credit check may also be included with the application to screen candidates.
Since a simple rental application is so important for both the landlord and the applying tenant, it must have all the required information from the start. Look over the application carefully to ensure you ask all required questions so your application is valid.
There are a few basic elements to a successful rental application:
Applicant’s Personal Information
It should include driver’s license information, date of birth, social security number (for conducting background checks), and whether or not any of the prospective tenants smoke. There should also be a section inquiring about the applicant’s current employment and employment history. Very often, income verification is required along with the application (standard practice is to include the two most recent months’ pay stubs). There should also be a section for the applicant’s current address, including questions as to whether the address is rented or owned, how long he or she has been living there, and contact information for the landlord (if applicable).
Details of Address Being Applied For
If you are renting out multiple units, be sure to have applicants clarify which unit it is they are applying for and their desired date of move-in.
This is fairly straightforward – include sections for previous addresses, the nature of living each living arrangement (rent vs. own) move-in and move-out dates, and contact info for each landlord.
Here, the applicant should write the full legal names of any other applicants who plan to live in the apartment. Bear in mind - it is wise to make each applicant fill out a separate application, even if they are applying as a unit.
If you will allow pets in your building, require applicants to specify all pets in this section (species, number, ages, and any other information you will need).
This only applies if your rental includes parking. Applicants should describe the model, make, and size of their vehicle, as well as its condition. Vehicle information is important because it helps you know which cars should, and should not be on the property. Additionally, this will inform you of whether your property will accommodate an applicant's car, should it be electric, and require charging or require special parking due to its size.
These include questions like “Have you ever been evicted?” “Have you ever been convicted of a felony?” and “Have you ever filed for bankruptcy?” Provide your applicants with space to explain each answer.
Have each applicant provide names and phone numbers of at least two references. These may be professional references, such as a supervisor or coworker or personal references, like a relative or close friend, but they should have known the applicant for a reasonable amount of time.
Asking for an emergency contact is a way to track down tenants should they skip out on a lease. If they suddenly leave without paying rent, or cause severe damage to the unit and disappear, referring to who they listed as their emergency contact is a good start to tracking them down.
As usual, the application must conclude with the signature of the applicant as well as the date that the application is completed.
A rental application should be filled out after the potential tenant has viewed the property and shows interest in renting. If there are two or more adults who would be named on the rental agreement, each person should complete a rental application online or on paper. This document asks for basic information about the tenant, including their employment and rental history. It also asks about criminal convictions.
You should attach a copy of the Fair Credit Reporting Act that explains what rights the potential tenants have during the application process. The potential tenants should return the application along with the application fee. The application fee is most often used to pay for the second step, running a credit report.
A credit report and a criminal history report (also known as a background check) can help you determine whether the potential tenant can afford to rent the property and the likelihood that your property will be properly cared for. There are numerous options available for you to run these reports. RentPrep.com charges $28 per application. ScreeningWorks.com and MyRental.com charge $30 per application. E-Renter.com charges $32 per application.
If there was a reason that the potential tenant could not complete the application and you’re both exploring the possibility of creating the landlord-tenant relationship, there are credit and background companies that the applicant can pay to use. LeaseRunner.com costs the applicant $32. MySmartMove.com is owned by TransUnion and it costs the applicant $35. Cozy.com costs the applicant $40.
Make sure that you call the potential tenant’s employer (you’ll most likely need to request to speak with someone in Human Resources) to ensure they’re employed as well as to verify their income. You can also ask the potential tenant for their last two pay stubs. If the potential tenant is self-employed, ask for the last two copies of their federal tax return to show their income.
Call the previous landlords or property management companies listed under “Rental History” on the rental application. Ask about:
Whether the potential tenant was ever late when paying their rent. If so, ask about how often this happened during the previous rental period.
Whether the potential tenant was served an eviction notice (or a notice to quit). If so, what was the reason?
Whether the tenant was loud.
How the potential tenant left the previous residence. For example, was it clean and in good repair (outside of normal wear and tear)?
How the potential tenant appeared to get along with others if the rental was a multi-tenant establishment such as an apartment complex.
You’ll want to consider their credit score, their job history, their income, their criminal convictions (if any), and previous rental history. Keep in mind that there are legal protections in place to stop discrimination. So, be very careful and make sure that, if you deny someone, that you’re doing so for a lawful reason. If you decide to rent to the individual, send them an approval letter, and collect the security deposit after you create the rental agreement. If you’re denying the application, send out a rejection letter. Keep a copy of the letter for future reference.
You’ll want to consider their credit score, their job history, their income, their criminal convictions (if any), and previous rental history. If you decide to rent to the individual, send them an approval letter and collect the security deposit after you create the rental agreement. If you’re denying the application, send out a rejection letter. Keep a copy of the letter for future reference.
A background check is an important component when deciding if you want to rent to someone. You should look at the potential tenant’s credit (including their credit score), current employment status, their income, their previous rental history (including whether they’ve been evicted), and ask for references.
This portion of the rental application will describe whether or not a fee will be charged for applying with the landlord. If an application fee will be charged, indicate the amount that will be charged to the applicant.
If pets will be allowed in the rental, indicate the maximum number of pets allowed in the apartment. Besides, specify the amount required to cover the pet deposit. These figures will specify the deposit required for one pet and two pets. Also, specify the non-refundable deposit amount.
This section identifies the landlord and provides his or her contact information. When filling out this section, be sure to specify the following:
Full Address (Including city, state, and zip code)
Landlord’s Email Address
Landlord’s Telephone Number
In this section, the property is presented for rent is described, including the particular unit/rental information. Provide the following details about the rental property:
Property Address (including city, state, and zip code)
Number of Bedrooms
Amount of Rent Due and How Often
Security Deposit Amount
In this section, the applicant’s details will be highlighted. These details include the applicants:
Date of Birth
Social Security Number
Date of Birth
Other personal information that will highlight their employment and rental history.
This portion of the application highlights the employment and financial history of the applicant. This section gives the landlord an in-depth look into the applicant's life to help him or she determine whether or not the applicant will be a good candidate to rent the apartment or rental property. Information required includes current and past employers, positions held, and a period where the position was held.
In this section, the applicant will provide personal references that will back up, or give further account to who they claim to be on paper. In this section, the applicant will provide the following information for each person that can support their claims, and give the landlord further insight on who they are as a person:
Relationship to Applicant
This section highlights some personal details of the applicant and helps the landlord determine whether or not he or she will be a promising tenant. These details include whether or not the tenant smokes, or has been evicted. Additional details include whether or not the applicant has been convicted of a crime, or declared bankruptcy.
So, why would anyone become a landlord? The basic answer is simple. The rental property produces income. This income may be supplemental to one's current monthly income, or it could help provide an investment income. The rental property may even serve as income for someone when they retire.
Rental income isn’t the only way that someone can make money on rental property.
Real estate ownership is a form of leverage for an investment portfolio.
There are also tax advantages of buying property to use as a rental property.
Several tax write-offs come from owning rental property. Of course, a landlord may not be able to take every deduction every year. If you purchase property to act as a rental, you must consult with a CPA to determine which deductions you can take on your taxes. The most common deductions are:
Interest paid on the home loan
Depreciation of the rental
The cost of ordinary repairs made to the rental
Travel did for rental purposes (either actual expenses or the IRS standard mileage)
Long-distance travel for rental purposes
Home office expenses
Wages of employees and independent contractors
Certain losses caused by casualty or theft
The cost of legal and professional services
For you to make an educated decision about whether you should enter into the real estate industry as a landlord, you should be aware of some of the disadvantages involved. Like all businesses, being a landlord has risks. In this section, we’re going to talk about some of the most common risks you would face as a landlord.
Liability is one of the biggest risks.
There are unexpected expenses that often pop up.
Bad tenants are another disadvantage for landlords.
Rental property that remains vacant is also a disadvantage.
There are things that you can do to manage the risks you face as a landlord:
First, make sure that your lease is legal. If your lease or rental agreement doesn’t abide by the laws of your state, it cannot be enforced by you or even by the court. For emphasis, we will say it again: leases and lease agreements are state-specific and must include certain terms. Make sure that you know the laws in your state related to the lease or lease agreement.
Second, make sure that you have the right types of insurance to help you recover from any losses that you may experience. This may include homeowner’s insurance to protect the premises (your policy may need a rider for renting out the property), a business policy, which is often necessary since being a landlord is a business, a rental dwelling, or landlord policy, and an umbrella or extra liability policy.
Make sure that you inspect the property. Of course, you need to have the property inspected when you first purchase it. You also need to inspect the property before the tenant moves in, during their tenancy (with proper notice in the lease or rental agreement as well as a reminder of when you will inspect the property), and when the tenant leaves the property.
As you look for a tenant, you must be aware of and abide by both federal and state anti-discrimination laws. In this section, you’re going to learn about advertising to the tenant, the importance of a screening process, how to screen and legally reject applicants, how to screen tenants based on criminal history, and how to execute the lease package and transfer possession of the property.
One of the main pieces of legislation that you need to know about is the Fair Housing Act. It states that it is illegal for a landlord to advertise a rental property that indicates a preference toward someone of a specific race, skin color, heritage, gender, disability, religion, or familial status.
Many of the violations of the Fair Housing Act happen during the advertising process. If you are reported and investigated for violating the Fair Housing Act and if it is found that you have violated this act, you could be fined.
Make sure that you describe the property and not who you believe would be the ideal tenant. Describing an ideal tenant doesn’t necessarily violate the Fair Housing Act, but it does create a slippery slope. It could be argued that you’re only showing the property to people that you prefer to rent the property. The Fair Housing Act also forbids discrimination on familial status. Stating that your property is perfect for a retired couple may be seen as discriminating against others because of their family status.
If you plan to post photos of your property, only use photos of the property.
Do not include photos that depict a certain type of person enjoying life in the rental unit. This can be seen as exclusionary and it can lead you into hot water. This includes the use of photos of any particular race or able-bodied individuals.
Although the Fair Housing Act has some exemptions, it is important that you still work to follow the non-discriminatory provisions in your advertising. To learn more about the Fair Housing Act and its exemptions, speak with a licensed landlord-tenant attorney in your state.
When you are screening applicants, you need to know about:
Income and employment verification. If the potential tenant does not have sufficient income to pay the monthly rent, it is legal to send a rejection letter based on insufficient income.
Credit. Credit checks are important because it gives you insight on whether or not your applicant has a habit of paying his or her bills late.. or at all. Poor credit history is another simple and legal reason to decline to rent to someone.
Criminal history. You will learn more about criminal history in the next section.
Housing history. One of your applicants may not have had a good credit report, but they may not have any evictions and they may have a perfect rental history. However, if there is someone who has an eviction (or multiple evictions), you are within your legal rights to reject the potential tenant. Also, someone who has a history of moving around may be a risk.
Pets, cosigners, and other considerations. You may choose to reject prospective tenants based on pet ownership (if you do not allow pets or only small pets), their need for a cosigner, or other considerations.
If someone presents a risk, but you think that they may still be a good tenant, you may have the option to charge a higher security deposit and allow that tenant to rent your property. Just keep in mind that many states have caps on security deposits.
To a degree, landlords often have the right to deny a potential tenant based on their criminal history. HUD allows landlords to exclude someone based on criminal history if they have a clear, defensible, and evidence-based policy for why they do it.
When it comes to your screening policy and criminal history, your screening policy cannot:
Deny tenants based on just any criminal charge or conviction.
Deny tenants based on arrests.
Make a decision to deny based only on criminal history.
Your screening policy should:
Distinguish between which acts on someone’s criminal history is acceptable and which are not.
Take into account how long ago the occurrence happened.
Consider what type of crimes occurred and the severity of those crimes.
Residential Lease Agreement: A document that sets out the legal terms by which a residential property is leased out from a landlord to a tenant.
Residential Sublease Agreement: If allowed by the original lease agreement, a sublease agreement allows a tenant to rent out the property to a subtenant, along with the same provisions of the main lease agreement.
Rent Receipt: A rent receipt is a form that provides proof of payment for rent by a tenant to a landlord.
A rental application is a tool to identify an ideal tenant who best fits the criteria of a rental agreement and helps the landlord find a tenant they can have the best relationship with.Read More
A lease agreement is an agreement between two parties that enables one party to essentially borrow and use something that belongs to the other party. The lease agreement defines the terms and conditions of the lease.Read More
A Rent Receipt is documented proof and protection for both landlords and tenants of rental payments having been made.Read More
Month to month lease agreements offer flexible rental arrangements for landlords and tenants. Each party is only contracted to comply with the negotiated and agreed terms on a monthly basis.Read More