The only way to ensure that you fill your unit with a great tenant is through tenant screening.
The first step in the tenant screening process is a rental application. Constructing a good application allows you to gather important information about your prospective tenants that will help you decide whether they would be a good fit.
With property management software, you can create and send out your rental application online, making life easier for you and your applicants.
Here’s everything you should include in a rental application:
Basic Contact Information
In addition to the applicant’s full legal name, you should ask them to provide their email address and phone number for future reach.
Some landlords ask applicants to provide their Social Security Number or driver’s license, but this isn’t recommended. Because the laws that govern how landlords must handle this sensitive information are strict, it’s better to avoid the risk of legal trouble. You can use online services for background checks and credit reports without needing someone’s SSN.
Five years of rental history generally gives you enough to go off of for observing someone’s rental patterns. A tenant who tends to jump around from lease to lease is less desirable than one who rents somewhere long-term. A tenant who’s likely to renew a lease is good for business because it reduces turnaround and saves you time and money on a vacancy.
You should also ask your applicants to provide the names and contact information of current and previous landlords. These references will be able to confirm the information that a tenant has provided. Landlords are also excellent sources to hear about a tenant’s behavior and rental habits first-hand.
Your application should ask for a list of current and previous employers. This should be kept brief.
You also want to ask for employment references. Like landlords, employers will be able to verify that the applicant has indeed been employed there. An applicant who lies on their rental application is a major red flag.
Request to Run a Credit Check
In order to run a credit check, you need to ask for written permission from the applicant. A credit report is a necessity for tenant screening, and you can’t review someone’s credit report without consent.
The legal disclosures you must include in your rental application and lease agreement are different depending on the state, so it’s important to find out what your state requires.
Some disclosures that may be required include:
- Applicants’ assurance: States that a tenant who provides incomplete or falsified information will be denied
- Liability: Releases you from any negative consequences that might occur from running a credit check or a tenant background check
- Extended authorization: States that any information provided on the application may be used throughout or after tenancy
- Non-refundable fees: Discloses non-refundable application fees if they’re legal in your state
- Holding fee: Explains the security deposit or holding fee procedures
- Move-in requirements: What an applicant needs to do before move-in
You can ask your applicants questions about pet ownership, smoking habits, and other preferences, as long as you don’t ask questions that can be construed as discrimination. Familiarize yourself with fair housing laws. If you ask questions that relate to race, color, religion, sex, disability, national origin, familial status, or other classes protected on the state/local level, you’ll get into legal trouble.
Proof of Income
It’s imperative that a tenant can comfortably afford the price of your rent. It’s generally recommended that a tenant’s total income is at least three times the rent price. A tenant who makes less than that may be financially burdened and run the risk of struggling to pay rent.
The most common documents used for proof of income are pay stubs, W-2 tax forms, and bank statements. Any of the following documents are also valid:
- 1099 form
- Federal Income Tax Return
- Social Security statement
- Severance statement
- Annuity statement
- Pension disbursement
- Interest and dividend income
- Proof of bonus or incentive payment
- Unemployment statement
- Workman’s compensation letter
- Court ordered awards letter
- Letter from employer
A rental application is one of the most important components of tenant screening. An application is your opportunity to ask prospective tenants for information about themselves that you wouldn’t otherwise be able to get. Knowing what to include in a rental application puts you in a good position to decide whether a tenant is qualified.