“Rental Verification Letter From Property Managers” written byÂ Mike Marko.
As a property manager, have you ever been asked to provide a rental verification letter for a tenant? Â
Itâs not uncommon for property managers to provide rental verification. Â As a property manager, Iâve been asked to provide that several times a year. Â
But if you are required to provide a ârental verification letterâ you have to be careful about what you put in it. Â Thatâs why I want to discuss rental verification letters and what to do about them.
Learn More About Rental Verification Letter
Most rental verification letters are often used or needed Â to open bank accounts, loans or other financial reasons. Itâs common for a new person in the area, someone who doesnât have an extensive financial background or someone establishing or re-establishing bank accounts, to ask for a rental verification letter. When a tenant asks for a rental verification letter it is best to understand what the letter will be used for in the future so you can include the required information within the letter for the tenant.
IMPORTANT: Before you provide a rental verification letter make sure you get written permission from the tenant first.
Anytime you write a rental verification letter you should make sure it is professional, gives details of the rental noting payments and type of tenant. In addition to bank statements or receipts showing payment for rent the rental verification letter could be used to verify behaviors and other personal habits. Some requirements for a rental verification letter include but aren’t limited to the following: to secure student loans, establish funding from outside sources, open new bank accounts or gas or electric services accounts or other reasons detailed by the tenant.
If a tenant presents a rental verification letter from a past landlord you can use that letter to get details of the renterâs past behaviors and may give you insight from previous landlords about their behavior while renting a property.
Understanding the uses and requirements for a rental verification letter is key when needing to write one for a tenant or when reviewing one from a prospective tenant.
What Is A Rental Verification Letter?
Ok, so letâs start with the obvious questionâ¦
A rental verification letter is a letter that details your financial and personal experience with the tenant while they are renting from your business. Being detailed and accurate on a rental verification is highly important because the letter could be used for years after the initial uses are satisfied. For instance, the tenant could ask for a rental verification letter to secure enrollment in school, obtaining a loan, or when they are applying to a state or federal assistance program. Â
After this initial use has been satisfied the tenant has this letter and like an employment reference letter they use it as a reference letter for future rental, future financing needs, opening bank accounts as well as other uses that you might not be aware of when writing the letter.
Rental Verification Letter From Property Manager
A rental verification letter from previous property managers is as important as personal references, a wise and experienced property manager would use the letter to determine if the tenant would be a good qualified renter for their property. When you receive a Â rental verification letter written by a previous landlord or property manager the letter could include information about the behavior and character of the applicant based on their previous landlordâs point of view. Since the letter is requested by the tenant, it can include important personal information about the tenant and does not violate their privacy.
A rental verification letter is helpful in detailing past personal and financial behaviors of the tenant from someone who has previously rented to the tenant. If presented with a verification letter with rental documents it is logical to use it in understanding the tenant on a more personal level than just relying heavily on cold written reports.
Reasons Why Rental Verification Letter Is Needed
As the property manager you need to understand why the rental verification letter is needed to be written for tenant. A tenant often asks for a rental verification letter because they need it to enroll in school, obtain a loan, or applying to a state or federal assistance program.
Why It May Be Needed
A rental verification letter is legally required for the following reasons:
- Proof of residence
- To prove that he/she has paid or secured a deposit on the property
- To help them have a stronger application for loan if they have a poor credit score
- To verify their rental financial history to lenders, to they are responsible in paying and renting
- Creditors or banks could require it to determine if they will loan funds requested by tenant
Most banks require rental verification letter if they need to verify the residence of an individual. In most cases, banks are not accepting a rental verification letter from a landlord because it can be easily forged. The letter must be written by the property manager or a real estate agent, include verifiable financial receipts and detail what is asked or required. Banks are more likely to accept a rental verification letter from a registered professional because they are less likely to write the letter in a fraudulent manner.
Property Manager Screening
As the property manager during the tenant screening process you could also request for a rental verification letter from a past landlord or property manager. Â The most common reason you would request this type of letter is that you are unable to obtain the information easily from the tenants past landlord or your bank could require it to verify your rental of the property to the tenant.
If needed a rental verification letter is normally required when a tenant is renting a new property. We both know that using an online tenant screening service is the most preferred way to know the background of the prospective tenant. A detailed report can show history but a letter from a past landlord can help detail personal behaviors of the tenant at their past rental property and can help you know what a kind of person is the applying tenant.
A common reason a property manager could use for requesting a rental verification letter is to understand or give details on past rental behavior either good or bad. Background and credit reports give dates and details of payments and other verifiable information. However, if you saw several late payments or a bad credit scores and the tenant claims this behavior never affected their rental then you could request the letter to answer questions such as, âhow many times were they late?â âWere they a disruptive resident?â or âAre they responsible tenants?â. Personal references and verifications from past landlords as well as a rental verification letter from the applicantâs previous or current landlord can tell you what kind of person they are.
Tips In Writing A Rental Verification Letter
After you have determined that you will need to write a rental verification letter for a tenant it is best to understand how to write the rental verification letter. As the property manager, it is important to have a knowledge on how to write the letter correctly to protect your name, business, while fulfilling your tenant’s request.
Here are some tips for writing a rental verification letter.
- If the letter was requested by an agency, the request should be made in writing and give details of exactly what the agency is looking for in the letter. If it is to be used to avoid identity theft or verify identity make sure this is included in the letter all the ways that you verified the tenants identity. As the property manager, it is important to protect your tenant from someone who is pretending to be a bank or an organization. Checking the requesting organization or agencyâs website or calling their telephone number is advisable to verify its legitimacy.
- After verifying the request, inform your tenant about the information that you will include in the rental verification letter. This is important to avoid any misunderstandings or the need to write an additional letter. You should have a signed agreement with your tenant allowing you to write the rental verification letter for them. In this authorization you would include that their behavior and any useful information will be included in the rental verification letter.
- As part of rental verification documentation, make sure that you have records of the tenantâs rent payments, include the date they move-in, the amount of rent they paid and whether they paid on time. The length of time that the tenant had lived in a property should also be included.
- The letter should not be written generically or can be used for different purposes. You should address it to a specific person. Remember after you write the letter the tenant may have access to it in the future and could use it for other future needs. Consider adding the property manager’s evaluation about the tenantâs behavior or character. Your contact information should also be included in the letter.
- It is important to begin the letter introducing yourself before explaining the reasons why the letter is made. This frames the letter in credibility and also shows that you are a verifiable source and can be contacted to answer any questions from the letter.
When youâre done writing the letter, compare it to tenantâs current lease to make sure the information is true and correct. It is also important to review the letter with the tenant to make sure that they agree with the information given. Mail, fax, or email a scanned copy of the letter to the requesting party and always keep a copy of the letter.
Just a reminder, the rental verification letterâs purpose is to prove the tenantâs residence and is best to keep information detailed to their rental.
Final Thoughts About The Rental Verification Letter
In this article we covered the key points you need to consider when asked to provide a rental verification letter. Â If you follow the tips I provided you, then it will help make sure you stay protected. Â The important thing to remember is to make sure it is a valid request from the tenant, and that you have that permission provided to you in writing.
If you have any questions or comments please add them below.
Have questions and want to connect?
Add me on Facebook then shoot me a message:
Disclaimer: This commentary is a matter of opinion provided for general information purposes only and is not intended to be taken as investment or trading advice under any circumstances. Information and analysis above are derived from sources and utilizing methods believed to be reliable, but we cannot accept responsibility for any losses any person may incur as a result of this analysis. Individuals should consult with their personal financial advisers. By using this web site or any information contained in it, the user specifically and expressly agrees that no advisor-client relationship is created between said user and any author, owner, executive, or principal of this web site by either use of this web site, or by any information, product, or service offered by or on this web site. No express or implied guarantees or warranties as to investment or trading results are made, and any perceived insinuations of such are hereby expressly disclaimed.