“How To Execute A Good House Rental Application” written by Mike Marko
The success of a house rental application ultimately comes down to help well the property manager executes a good house rental application process.
A good property manager doesn’t accept just any person that shows interest in the residential property. Rather, each potential tenant undergoes a rental application process to determine suitability.
This can be difficult, particularly when these prospective tenants are deemed unsuitable and have to be turned away. Fear of long vacancy creeps in… but don’t let this deter you.
It is more important to ensure that you find the right tenants to occupy your property, to prevent issues in the long-run. This guide will help you sort out the things you needed to do when executing a house rental application in order to filter out the right tenants from the bad ones.
Quick Guide to a Good House Rental Application
From a tangible business perspective, executing a good house rental application can be extremely helpful. A good house rental application allows you to ask the applicant questions that are most important to consider when renting your properties.
There are good and bad tenants. Filling out the rental application and subsequent interviews with the applicant helps you determine if the applicant would be a good or bad tenant for your property. Executing house rental application allows the applying tenants to make their best effort to rent the property. The answers the applicant provides regarding their past rental history and financial situation allows you to begin to determine whether they’re qualified or not.
When developing an effective house rental application there are certain factors you should consider. These factors will give you a better chance of finding a great tenant for your rental property. In the next sections, we will discuss the most important factors that need to be included and considered to execute a good house rental application.
What Is a Rental Application
The rental application helps property managers streamline their application process and find quality tenants to rent your properties. This screening document allows you to evaluate candidates objectively and ensures compliance with fair housing rules.
The rental application can also be personalized by adding more questions of your choice to meet your requirements. So what do you have to do to make a good house rental application? Let’s find out.
Ask for an Application Fee
As a property manager asking for an application fee enables you to weed out uninterested and non-committal applicants. Fees used to cover the cost of any tenant background checks help in making review process easy and efficient. Oftentimes tenant background checks will reveal tenant history or financial habits that will eliminate or make the tenant more desirable as a rental tenant.
In addition, requiring the applicant to pay for running a credit check to qualify for renting your property has become common practice in most areas. Requiring the applicant to pay for a credit check shows they are serious and wanting to rent the property you are offering. Additionally, the credit check is an excellent tool to help determine the most qualified tenants for your property.
However, keep in mind that the application fee should be reasonable, covering the credit check and some administrative costs, so as not to be accused of taking advantage of the situation.
Do A Background Check
To find the best and most qualified applicants for your rental properties you may have to dig deeper into their rental and financial backgrounds. Running background checks is normally done to ensure that your future tenants are trouble-free.
Property managers mostly use the background check to establish identity and check for criminal history. It is also good way to get an idea of the tenant’s personality and dependability by interviewing employers and previous landlords.
When conducting background checks, keep a close eye on:
- Prior felonies
- Prior evictions filed
- Prior evictions carried out
- Other criminal or bad financial history.
After receiving the background check report it is best to review it directly with the applicant. To allow tenants to be straight forward in their past histories you should ensure that there is a place in the form where the tenant can explain any felonies on his/her record to help you get a better idea of the situation. To leave no stone unturned, it is recommended to hire a company that specializes in doing background checks.
Check Tenants Credit
The credit check is similar to a background check. The credit check, like a background check is a historical representation of the tenants past behaviors. However the credit check focuses on the historical records of how the tenant has fulfilled their past financial responsibilities in paying bills and credit accounts.
You should make sure that you notify prospective tenants that a credit check is part of the requirements for renting your property. You are required by law to receive a signed authorization from the applicant allowing you to run a credit check.
Additionally, it is best to notify the applicant that this service usually comes with a fee, so it is best to inform them of this in advance.
Ask for a Proof of Income
Property managers must ensure themselves that their tenants are able to pay or afford to pay for the property they will be renting.
Most managers include an area on the house rental application where the tenant can state their source of monthly income and provide proof. Commonly, asking for past two months of their pay stubs is a good way to ensure current employment.
A property manager may also call the tenant’s employer for proof of employment, and may ask questions about his character and financial background.
You may ask questions like:
- How much do they currently make?
- How long have they worked there?
- Is this job considered temporary?
Property Manager References
Once you’ve finished verifying the potential tenant’s criminal and financial background, it’s time to check the rental history. You can do an extensive check on the tenant’s rental history by speaking to their past property managers.
If the tenant doesn’t have a rental history, property managers won’t have the information needed as to how well they may take care of the property.
In lieu of no rental history, you may allow the tenant to provide other references. These reference must be outside of their family, and can include people like college professors and employers.
Co-signers or guarantors are people who sign the lease with the tenant. They are the ones who take legal responsibility for covering the rent if the tenant does not have the capability of doing so.
Property managers can also request to the co-signer if the tenant has poor credit or if his income isn’t more than three times the cost of the rent.
Sign the Lease
Once the rental application is approved, the lease agreement can be created and signed.
This is best to do in person prior to the discussed moving date. Everyone living in the apartment must be present to sign the lease. The co-signer will need to sign their own agreement as well.
Make sure you walk them through each provision in the lease step-by-step and sign as you go. This is to avoid any confusion and to ensure that all parties are in agreement of the contents.
Final Thoughts on How to Execute a Good House Rental Application
A huge part of a property manager’s responsibilities is ensuring that they accept quality tenants to move into their property. This can be difficult, particularly when you are in a rush to fill in the vacancy and are in need of someone to provide revenue.
However, rushing and accepting just any person who shows interest in the property can backfire. This can lead to issues in the long-run… causing trouble down the road.
It’s important that you verify everything that the tenant writes on the house rental application.
There are a lot of factors that must be considered to ensure that you secure the right tenants. As a recap, those are:
- To ask for an Application Fee,
- To run a background check,
- To check credit report,
- To require a proof of income,
- To seek reference,
- To do a co-signer application, and finally, and
- Sign the lease.
Make sure you go over all of these points for the application. While these can seem tedious, remember that these tips can potentially save you countless hours, headaches, and dollars in the future.
If there’s anything you need to know about house rental application, share it with us in the comment section below.
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