Do you provide applications to everyone that looks at rental?

18 Replies

I'm a new landlord and have some renters coming to look at the property. I scheduled a showing for the weekend but just scheduled another for tonight. If the group tonight is interested, do I give them an application and honor the showing I already scheduled for the weekend? I guess I'm just a little confused on (1) when to give an application, and (2) how to decide who gets to rent it when there are multiple interested parties. Any advice is appreciated!

Personally, I don't give out an application unless all decision-makers are present and have decided they want to pursue renting the property. There is no rule against handing out multiple applications. ;)

As far as who to rent to: the group with the better credit history, higher scores, no or least criminal background, most stable job history, rent history etc.

@Mary Munoz

In Brandon and Heather Turner's book, The Book on Managing Rental Properties, they suggest giving applications to everyone who comes to look at the unit, even if you know they would never be able to qualify under your standards.  I think the reason why they suggest this is in order to avoid any potential lawsuits regarding Fair Housing Laws.  If you have the same procedures and standards in place for everyone, it's hard for a court of law to prove you discriminated against a potential tenant.  Best of luck!

I give applications to everyone , paper is cheap 

Thanks, everyone! I appreciate the insights. The application is online and has a fee, which is why I want to be sure. It sounds like filling out an application is a standard part of looking for a rental, and that the landlord gets to make the final call. If the group tonight is interested I'll send them the application and let them I have other interested parties, and will let them know by <<whatever timeframe makes sense>>. Sound about right?

Not sure what u are using, but rental application fees should always get charged to potential renters( ex. Credit check , background check)

Yup! We're using SmartMove and charging the fee to the prospective renters. 

There is no "first-come, first-served" when it comes to applications.  If you show it during the week and the applicant is a home run (good credit, good income, clean background, strong job history, landlord references, etc.) then you can approve that applicant and tell the weekend people that it has already been rented.  Usually its better to have multiple applications to compare, especially for the sake of trying to select a "long-term tenant."  Vacancy is costly and while there is no way to guarantee one tenant is going to stay longer than another, talking to people and learning a little about their life and situation should give you some clues as to how long they might stay in your place.

The probability of you getting a home-run tenant right off the bat is pretty low.  If you are new to the landlording process I would suggest that you get as many paid applications as possible.  Just the process of looking at credit reports and applications, calling references, talking to people and verifying employment/income will make you a better landlord/screener for future vacancies.  

I can tell you that without a doubt, I make better tenant selections now than I did 17 years ago when I started out.  Not to mention, I have less vacancy and more long-term tenants.

Thanks, Russ! That makes perfect sense and totally answers my questions. I appreciate it!

Originally posted by @Russ Smith :

There is no "first-come, first-served" when it comes to applications.  If you show it during the week and the applicant is a home run (good credit, good income, clean background, strong job history, landlord references, etc.) then you can approve that applicant and tell the weekend people that it has already been rented.

The probability of you getting a home-run tenant right off the bat is pretty low.  If you are new to the landlording process I would suggest that you get as many paid applications as possible.  Just the process of looking at credit reports and applications, calling references, and verifying employment/income will make you a better landlord/screener for future vacancies.  

I can tell you that without a doubt, I make better tenant selections now than I did 17 years ago when I started out.

Yea. I would agree with one of those latter posts. Give everyone an application. If they submit the application and they look good, I tell them they are qualified and the house is theirs IF they want it. But I also tell them the house isn't locked up until I receive a hold deposit.

I keep doing showings until I get a hold deposit from someone I've qualified. What you don't want to do is tell someone the house is theirs and then tell everybody else its rented. And then a week later, find out the applicant you picked isn't going to rent from you after all.

Then you have to start all over and probably could have had someone else in the previous group locked in by now. Typically if you call them back, it'll be too late.

So I never tell anyone its rented or stop showings until I receive that hold deposit.

The hold deposit is not some additional fee - its a portion of their security deposit paid in advance. If they back out later, though, I keep it.

You'll find out real quick who is serious and who isn't. Its also a bit of a red flag if they tell you they need a week or so to come up with the $500.  When that happens, I am typically dying for someone else to qualify and put up the money to beat them out.

A few years back, I got a good deal on a near new construction house. First applicant saw it on friday and was fantastic. Nurse with great income and job history. Husband had good job too. But then they said they couldn't get the deposit to me til monday. Hmmmmm.  Somebody came and looked at it on sunday. They were great too. Filled out the app, I ran the stuff, offered to them, and they got me the deposit the same day.

Told the nurse/family and they were beside themself. Told me how much they wanted it and that I should have held it for them and then she said she was going to hurt herself she was so upset and it would be my fault. Not exactly what I want to hear knowing nurses are the ones that are helping people. I tried telling her there would be other houses but this lady was just crazed. 

So it can be a bit tricky to do it this way, but ultimately, requiring that hold deposit will let you eliminate the risk of a tire kicker no showing on you when it comes to pay and you've already told everyone the house is rented.

To keep above board regarding Fair Housing Laws, it helps if you have some kind of policy on how you review applications. So you can say this is how you always do it, and fall back on that if any litigiousness results from a denial or a stalled response. Whatever it is you choose to do, you should do it the same way every time.

I've seen landlords use credit scores alone as a deciding factor, saying 700+ is instant approval and below that could trigger a call for more applications.

Other landlords, and this usually when they occupy the property too, want to make a decision based on lifestyle criteria as much as financial factors. While there's less bedrock to stand a defense by on this gut based approach, as long as the criteria that's compelling the denial or delay does not violate the law, it should be fine.

I've been leasing property for 13 years and have dealt with pretty much every personality and all woks of life. What's most important is managing the expectation. Sharing a little with them of your process, up-front goes a long way and adds structure to the potential deal. Deals need structure to come out good.

You could tell the person seeing it first (at the end of the showing) that you were planning on showing it at least one more time before making a decision---whether you like them or not. And if they apply and look stellar---then decide if you want to seize the opportunity or roll the dice and do that second showing.

A bird in the hand is worth two in the bush.

Wow, such good points. Thanks so much!

Originally posted by @Mike H. :

Yea. I would agree with one of those latter posts. Give everyone an application. If they submit the application and they look good, I tell them they are qualified and the house is theirs IF they want it. But I also tell them the house isn't locked up until I receive a hold deposit.

I keep doing showings until I get a hold deposit from someone I've qualified. What you don't want to do is tell someone the house is theirs and then tell everybody else its rented. And then a week later, find out the applicant you picked isn't going to rent from you after all.

Then you have to start all over and probably could have had someone else in the previous group locked in by now. Typically if you call them back, it'll be too late.

So I never tell anyone its rented or stop showings until I receive that hold deposit.

The hold deposit is not some additional fee - its a portion of their security deposit paid in advance. If they back out later, though, I keep it.

You'll find out real quick who is serious and who isn't. Its also a bit of a red flag if they tell you they need a week or so to come up with the $500.  When that happens, I am typically dying for someone else to qualify and put up the money to beat them out.

A few years back, I got a good deal on a near new construction house. First applicant saw it on friday and was fantastic. Nurse with great income and job history. Husband had good job too. But then they said they couldn't get the deposit to me til monday. Hmmmmm.  Somebody came and looked at it on sunday. They were great too. Filled out the app, I ran the stuff, offered to them, and they got me the deposit the same day.

Told the nurse/family and they were beside themself. Told me how much they wanted it and that I should have held it for them and then she said she was going to hurt herself she was so upset and it would be my fault. Not exactly what I want to hear knowing nurses are the ones that are helping people. I tried telling her there would be other houses but this lady was just crazed. 

So it can be a bit tricky to do it this way, but ultimately, requiring that hold deposit will let you eliminate the risk of a tire kicker no showing on you when it comes to pay and you've already told everyone the house is rented.

I believe you dodged a bullet there...

My question for you, Mike, is what paperwork have they signed at the time that they are giving you the hold deposit? Have they signed the lease by that time?? 

All are welcome to apply.   That being said,  I am very open about my rental criteria.  I charge an application fee, and personally do not want people applying to rent my apartments unless they have a reasonable chance of qualifying.    I let people know upfront what is the required minimum monthly income, what is the total required move-in money (I pro-rate the second month), length of time on job,  no accounts n collections   etc.   I will broadly hint that they do not qualify, and it would be a  waste of time and money.

Sometimes you will get someone who is just too naive to realize that they simply cannot afford my apartments -- I hate taking their money to run a credit/criminal/eviction when you know they will not qualify, but I don't want to violate Fair Housing.   

@Dillon Leider .  We both sign a hold deposit receipt. The hold deposit receipt states that I will hold the house until such and such date (i.e. November 1, 2017). On or before that date, they are required to pay the rest of the move in amounts (i.e. remaining sec deposit, first months rent, pet fee, etc) and sign the lease.  Should they not do so, the hold deposit is non refundable and I am free to rent to someone else after that date.

I think in the 8 or so years and 60+ houses I own, I've only had someone back out one time and I kept the money.  Before I started asking for the hold deposit, I had 3 in the first 2 years that no showed the day they were supposed to sign the lease and I got nothing.

Bottom line is that people will tell you anything. They won't put money down unless they're serious. 

I don't sign a lease as part of the hold deposit though. The tenant still has the ability to back out - only they'd forfeit the hold deposit. If I sign a lease, then I'd have to go through eviction to rent it to someone else. That would be counterproductive.

Again, $500 is enough to know they're serious. But it isn't too much where someone could back out if they really had to for unforeseen reasons. I get a little something for my trouble if they do. But its so rare (once in over a hundred leasings) that I don't worry about it.

I get a lot of inquiries via email- or those silly Zillow "I'm interested" which I think people just click on for fun.

1. So I immediately email out an application to be completed before the apartment is shown.

2. They are to send me a pdf or bring a hard copy of their credit report which they can get for free. (I do not believe in credit scores but can get much more information from looking through a report. Divorce and Medical issues can destroy a good tenants credit.)

-These are the gates separating the serious applicants from BS or other landlords wanting to view the competition.

3. I show the apartment, interview the potential tenant, discuss what is expected and answer all questions. (I always schedule multiple showings for the exact same time)

4. If I intend to rent the apartment to them they are to log onto Cozy and complete a background check- they will be reimbursed the $25 if they are selected as a tenant.

5. I meet them at the apartment, sign the lease and get the month and a half deposit- and then remove the listing.

I always have applications on a table that can be freely taken, however, I have already sized up the potential tenant at the showing and ask them directly how their credit is and anything else appropriate that is important to me.  If they say something that would eliminate them from the process, I let them know at that time that “it prolly won’t work out’. 

You prolly want to have your minimum standards developed and in place before you begin looking for a tenant.  Don’t alter your minimum requirements to fit a potential tenant.  The tenant that meets all your requirements is the right tenant.  Also add an extra 30 days to your tenant search timeline so you don’t feel compelled to go with a substandard tenant.

@Mary Munoz , in addition to handing out an application to anyone who wants one, consider printing - and framing so they don't walk away with someone - a list of qualifications. 

Having them printed out allows you to refer to them and also tells every applicant that you apply the same standards to everyone. Your risk of Fair Housing accusations drops when you can refer everyone to a pre-set qualification list.

Mindy Jensen, Real Estate Agent in CO (#FA100049656)

@Patrick M. that's a good, well thought out process, similar to what I do. Initially I send them a brief questionnaire that weeds out most people (usually income based or they have pets when the listing says no pets, or they don't want to answer, lol).  

Join the Largest Real Estate Investing Community

Basic membership is free, forever.