There are plenty of stressors that come with the territory of being a landlord. Lucky for you, the acceptance of a rental application as part of regular operating procedure on the part of the prospective tenants isn’t one of them. For years now, rental applications for the purpose of pre-screening have been welcomed by potential renters as industry standard. No need to worry about whether or not your customers will balk or be offended at the idea of you sifting through their personal affairs. On the contrary, they expect it.
But what if you are a first-time landlord, or new to the world of pre-screening? Where do you start? A quick google search of rental application templates yields page after page of results, no two examples exactly alike. When it comes to what information to request on your form, the possibilities are endless. But good news – we've got you covered. Read on to learn the top ten details for property managers to include in a rental application.
1. Basic Contact Info
This one should be fairly obvious. Right off the bat you’ll need your tenant’s full legal name, their phone number, and email address. And as far as contact information goes, that’s pretty much it. These days, we advise against taking more detailed identifying info, such as a social security number or driver's license number, as the collection of this information greatly increases your own liability. In the past, this information was used for things like background checks and in eviction proceedings; however, nowadays, it is much more advisable and safer to enlist a credible digital service to perform those functions for you.
2. Residence Info
A good rule of thumb is to ask for at least five years of residence history, including current place of residence. This will allow you to get a good feel for their renting patterns, whether they stay in one place or hop around, and also should afford you a substantial list of references. Make sure to require that applicants provide full names, phone numbers, and email addresses of previous landlords. This is hugely important for the screening process. While a current landlord might be eager to paint a wonderful picture of a less-than-desirable tenant in the hopes of getting them off their hands, a previous landlord would have no qualms about telling the full and unedited story. They can give you exactly the type of insight you're looking for and potentially prevent you from making an irreversible mistake.
3. Employment History
Asking for a potential tenant’s recent employment history is just as much a character check as it is a financial one. Of course, you want to ensure that the candidate can adequately manage the monthly rental payments, but reviewing their work patterns will also allow you to get a sense of their overall stability. You’ll want to require contact information for their listed employers so that you can validate their employment claims. In some cases, this may require the applicant’s written consent.
4. Proof of Income
Similar to employment history, requiring proof of income serves to ensure that the tenant will have adequate means to pay rent in full and on time. There are several ways that an applicant can provide this “proof”, including recent pay stubs, a W2, an employment offer letter, or, in the case of some employers, a designated worth authorization hotline. A good benchmark when assessing the adequacy of a candidate's finances is if the tenant’s gross income is at least three times the rent amount, they can afford the regular payment.
5. Applicant’s Assurance
This is the first, and arguably most important, legal clause we will discuss. This essentially serves to validate that the information provided by the tenant is true. It also requires the applicant to acknowledge that if any information is found to be false or incomplete, that that is grounds for denial. You can also use this area to share in writing that the application fee is non-refundable. Here it will be important to state that in the event of denial, the fee will be used to cover costs associated with screening, as it is illegal in many states to profit from an application fee. Lastly, you’ll want to make explicitly clear your intention of contacting the references provided. All these disclosures, as well as those listed below, will help keep you legally compliant and free from the threat of Fair Housing violations.
If you are planning to run a tenant credit or background check as a part of your standard screening process, which we highly advise, it is important to include a legal disclosure around liability. This will release you of any consequences should issues or complications arise.
7. Extended Authorization
At this juncture, an individual is filling out an application for the purpose of being selected to rent a property. However, if the applicant is chosen and becomes the tenant, the information they have provided here could still serve to be useful down the road. In the extended authorization portion of the application the individual is asked to OK the use of this information during their tenancy or after it has ended. Most often, the detail is used to help landlords collect on debts after a tenant has vacated.
8. Holding Fee
This outlines the terms of agreement when it comes to the security deposit. In most cases, and is advised, landlords require the payment of the security deposit by a specific deadline in order to hold the property. Failure to meet that listed deadline will result in the property being released and made available to other candidates.
9. Move-In Requirements
While this will absolutely be included in the leasing agreement, it’s good to get all the facts down on paper and out in the open ahead of time. Potential tenants will appreciate knowing what’s expected of them in terms of utilities set-up, move-in fees, deposits, and more in the event they are selected.
This is not exactly a line item on your rental application; however, it is just as important as anything else on the list! Any detail or document used in your screening process should be standardized. Having a clearly defined system for selecting your tenants will protect you against any type of discrimination or Fair Housing violation claims. It will also serve to keep you streamlined and organized in your business.
Whether you’re just starting out and drafting your very first application or you’ve been in the business for a while, it’s important to understand the why behind the what. Knowing just how critical each piece of information can be on an application is the first step toward creating one that is valuable to your process.
And don’t let this standard inquisition become a substantial stressor. Remember that applicants are used to this. They expect to be questioned and are ready with answers. Stick to our handy check sheet and guesswork be gone. Ask the right questions and you’ll be picking the perfect tenant in no time.