Open House / Rental Application Questions

8 Replies

I'm getting close to having my first open house and had a few questions around Rental Applications and Deposit to hold.

Do you make each adult fill out an application? How much do you charge for a rental application? Do you charge per adult? Do you accept personal checks for the rental application fee? Do you give a receipt for each rental application fee?

If you have multiple people show up for an open house do you accept a holding deposit from more than one prospect at the open house? Do you accept the holding deposit during the open house even before you have processed the rental application or do you wait to process the application and only ask for a deposit to hold after they have passed your background screening?  How much do you take for a holding deposit?  Do you accept a personal check for the holding deposit?  Do you give a separate receipt for the deposit to hold or do you combine the receipt with the application fee and just itemize both the rental application fees and the deposit to hold?  

Originally posted by @Troy D. :

I'm getting close to having my first open house and had a few questions around Rental Applications and Deposit to hold.

Do you make each adult fill out an application? How much do you charge for a rental application? Do you charge per adult? Do you accept personal checks for the rental application fee? Do you give a receipt for each rental application fee?

If you have multiple people show up for an open house do you accept a holding deposit from more than one prospect at the open house? Do you accept the holding deposit during the open house even before you have processed the rental application or do you wait to process the application and only ask for a deposit to hold after they have passed your background screening?  How much do you take for a holding deposit?  Do you accept a personal check for the holding deposit?  Do you give a separate receipt for the deposit to hold or do you combine the receipt with the application fee and just itemize both the rental application fees and the deposit to hold?  

Every person over 18 must apply - I do a two step process.  The initial application is free and that includes employment, income, landlord info.  Once I review the application and determine they qualify so far I have them complete a credit/background check through my smart move which charges them $35 (they pay them).   I find this gives me the most applications to choose from and have my pick of tenants.

When I do open houses I guide all prospective tenants to complete the free application online by a set day/time - I don't touch their money till I have approved them through both steps and they have signed a lease.  

If you have people fighting over your unit and want to rush to put down a deposit - your rent is too low

Brie Schmidt, Real Estate Agent in Wisconsin (#57846-90) and Illinois (#471.018287)

Many landlords in my area charge a small initial application fee ($25-$35), but personally I think this is unethical. I never charge any fees for an initial application. I do my initial screening and narrow it down to 2-3 applicants. I then ask just those people to pay for background check to make my final selection.

Regarding the deposit, there will be local laws about this for your area.

Originally posted by @Brie Schmidt :
Originally posted by @Troy D.:

Every person over 18 must apply - I do a two step process.  The initial application is free and that includes employment, income, landlord info.  Once I review the application and determine they qualify so far I have them complete a credit/background check through my smart move which charges them $35 (they pay them).   I find this gives me the most applications to choose from and have my pick of tenants.

When I do open houses I guide all prospective tenants to complete the free application online by a set day/time - I don't touch their money till I have approved them through both steps and they have signed a lease.  

If you have people fighting over your unit and want to rush to put down a deposit - your rent is too low

Thanks Brie. So you never take a deposit to hold?

Originally posted by @Troy D. :
Originally posted by @Brie Schmidt:
Originally posted by @Troy D.:

Every person over 18 must apply - I do a two step process.  The initial application is free and that includes employment, income, landlord info.  Once I review the application and determine they qualify so far I have them complete a credit/background check through my smart move which charges them $35 (they pay them).   I find this gives me the most applications to choose from and have my pick of tenants.

When I do open houses I guide all prospective tenants to complete the free application online by a set day/time - I don't touch their money till I have approved them through both steps and they have signed a lease.  

If you have people fighting over your unit and want to rush to put down a deposit - your rent is too low

Thanks Brie. So you never take a deposit to hold?

 No.  I do the showings on Thursday after work and Saturday afternoon.  Applications are due Sunday at 5.   Monday morning I do the employer/landlord checks, Monday afternoon they do the credit/background and by Monday night they sign the lease and give me the full SD

I find many tenants complain about other landlords charging upfront fees and deposits - it holds them back from applying 

Brie Schmidt, Real Estate Agent in Wisconsin (#57846-90) and Illinois (#471.018287)

There is nothing unethical about charging an application fee at the time of application. It helps weed out people that aren't serious. I process hundreds of applications per year and I'm amazed how many people want to apply for a rental but they can't afford to pay the application fee!

I charge $20 per applicant and it is non-refundable under any circumstances. My cost for a credit/criminal background is $16 so I net $4 per applicant. Some people turn in their application and pay the fee but never turn in the supporting documentation. In this case, I don't run their screening at all and get to keep the $20. The last time I checked, I was making a profit of about $1,200 a year from application fees but that's after hundreds of applications.

I also fully disclose how I screen applicants and I'm willing to "pre-screen" by talking to them about our requirements. I give them every chance to succeed or forego paying the fee so it's entirely on them if they apply and fail.

Having an online portal is a great way to streamline your application process, and relieve yourself of the collecting issue.  It also does the pre-screening for you and runs background/credit.  A site like Zumper is good for that.  There are dozens out there if you google it.  There will always be people who want to physically hand you an app and app fee.  If so, NEVER take a personal check.  Always require certified funds (money order from Circle K or Walmart, or certified check from their bank).

NEVER take a deposit to hold anything!  Your property should remain available UNTIL you have a signed lease, and a certified check (or money order) for, at minimum, the Full Security Deposit, which becomes non-refundable in the event they back out before move in.

When you have people competing, it always comes down to the most qualified candidate.  All things being equal, then it's the lease that will start the soonest.  I have had tenants who wanted a Jan 1st start date execute for a Dec 15th lease so that they could ensure that they got it over the other Jan 1st Tenant.  That's more money in your pocket.

Originally posted by @Cara Lonsdale :

Having an online portal is a great way to streamline your application process, and relieve yourself of the collecting issue.  It also does the pre-screening for you and runs background/credit.  A site like Zumper is good for that.  There are dozens out there if you google it.  There will always be people who want to physically hand you an app and app fee.  If so, NEVER take a personal check.  Always require certified funds (money order from Circle K or Walmart, or certified check from their bank).

NEVER take a deposit to hold anything!  Your property should remain available UNTIL you have a signed lease, and a certified check (or money order) for, at minimum, the Full Security Deposit, which becomes non-refundable in the event they back out before move in.

When you have people competing, it always comes down to the most qualified candidate.  All things being equal, then it's the lease that will start the soonest.  I have had tenants who wanted a Jan 1st start date execute for a Dec 15th lease so that they could ensure that they got it over the other Jan 1st Tenant.  That's more money in your pocket.

Great comments.  When you say never you don't take a personal check to do a background check so you instruct applicants to bring a certified check with them for the application fee to the open house if they are going to fill out the application in person?   

Originally posted by @Troy D. :
Originally posted by @Cara Lonsdale:

Having an online portal is a great way to streamline your application process, and relieve yourself of the collecting issue.  It also does the pre-screening for you and runs background/credit.  A site like Zumper is good for that.  There are dozens out there if you google it.  There will always be people who want to physically hand you an app and app fee.  If so, NEVER take a personal check.  Always require certified funds (money order from Circle K or Walmart, or certified check from their bank).

NEVER take a deposit to hold anything!  Your property should remain available UNTIL you have a signed lease, and a certified check (or money order) for, at minimum, the Full Security Deposit, which becomes non-refundable in the event they back out before move in.

When you have people competing, it always comes down to the most qualified candidate.  All things being equal, then it's the lease that will start the soonest.  I have had tenants who wanted a Jan 1st start date execute for a Dec 15th lease so that they could ensure that they got it over the other Jan 1st Tenant.  That's more money in your pocket.

Great comments.  When you say never you don't take a personal check to do a background check so you instruct applicants to bring a certified check with them for the application fee to the open house if they are going to fill out the application in person?   

 Never.  Personal checks can bounce or be voided (stop payment).  I can take cash (and offer a receipt on the spot), or a money order or certified check.  They are easy to obtain.  I have tenants fill out an app at the location, and run up to walmart to get the money order and bring it back.

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