As a landlord, you can’t be too picky about who you allow to live in your rental property. You’ve probably heard the horror stories of tenants who destroyed property, failed to pay rent, or caused problems with their neighbors.
Although no tenant is impervious to these happenings, you can significantly reduce your risk of getting bad tenants by following a meticulous tenant screening process. By requiring tenants to fill out out a free rental application, and completing various other checks like a background and/or credit check, you can preemptively avoid more serious issues.
If you’re new to landlording, you may have questions about the rental application. Here’s what you need to know about creating and administering this form.
What to ask on the rental application
If you’re using an online rental application template, some of this information will be there already. You can often customize it to meet your needs. Here’s some information you should seek with your application.
- Contact information: This goes without saying, but make sure that you get the applicant’s full name, phone number, and email.
- Current and prior addresses and details: Aim for at least five years of residence history so you can see patterns with each prospective tenant. Ask them to specify why they have moved previously and why they would like to move now.
- Employment history: Stable renters will have a solid history of employment. If it shows large gaps or several different jobs in the last five years, it could indicate a flighty tenant that doesn’t always have regular income.
- Proof of income: Make sure that a tenant is currently employed and can provide proof of a steady paycheck. Ask for a copy of a W2 or recent pay stubs to indicate steady income.
- References and authorization to contact them: One of the best ways to get information about a potential tenant is through other people. Get authorization to reach out to previous landlords and employers, and ask thorough questions about a renter to get a good idea of their character.
Who should complete a rental application?
All prospective tenants should fill out a rental application. This document is vital in ensuring that someone is a good fit for your property. It also helps you stay organized for future openings. If you keep good tenant applications on file, you might be able to contact them to fill an opening when someone vacates.
Additionally, these applications will help protect you against claims of discrimination or liability. It’s always smart to keep a paper trail in case of legal issues.
Should I charge a fee for the application?
This answer is entirely up to you, but most landlords do charge a small fee for processing. You’re giving your precious time to sift through applications, call references, and run background checks, and you should be paid at least a small stipend for your efforts.
However, if you’re catering to a low-income crowd, you might choose not to charge a fee to attract more applicants.
Background and credit checks are usually separate
Keep in mind that if you want to run a background and/or credit check on potential tenants, it usually requires a separate form. You must have express permission to run these checks, so they must fill out the required paperwork according to state mandates.
Most background and credit checks will charge you a fee to complete. Don’t pay these fees out of pocket, because you might run several checks before you decide on a tenant, which will eat into your profits. Include the cost of these checks in your application fee, specifying how you’ll use their payment.