How do you accept rental applications?

Question

I currently use cozy.co to accept rental applications but find some individuals do not like technology and also have issues with paying for the background and screening check online because they do not have a debit card or credit card.  Should I change my process or have potential tenants submit paper applications with a check to process $40 fee?

Bill S. · Answer

@Natelya G. you design your application process to legally screen out applicants you don't want to deal with. Do you want to deal with a tenant that doesn't have a credit card? If not, then carry on. If you are willing to deal with those without a credit card then adapt your process to include them. Personally I want the top of my funnel wide and large. I want to be the one disqualifying the applicants, not them opting out because they don't fit my process.

I am inferring from you post that perhaps your process is to screen tenants first and after they pass then you show them the property. What you are getting is lame excuses so they don't have to say to your face they don't want to pay before they see the property.

Find someone local to show the property daily at various prearranged times or set up specific dates and times for open houses (don't be surprised if those committing more than 24 hours away don't show - for example I figure someone calling on Monday for a following Saturday open house has a less than 10% chance of showing. Have some way for them to commit to the property by putting some money down in some form (I use and application fee). If you study sales you need to move people you want to rent to down the path of commitment to your property. You need to make this as fast and easy as possible for them.

I am against CCs for application fees. I take checks, it costs them money to do a stop payment on the check so it's not likely to happen. If they do a stop payment, I figure my screening worked and celebrate on missing a bad tenant. Sure I'm out some money but in the end I get my property rented move on with life which is what matters.

John Underwood · Answer

I take a paper copy and charge them a $40 cash application fee. I then run through residentresearch.com

I also take Zillow applications that only cost the applicant $29

Natelya G. · Answer

@Scott Trench

Also, I will definitely have to implement the release of authorization because it has slowed my processing down when apartment/landlords and employers state that they need to confirm with potential tenant first before speaking with me.

Natelya G. · Answer

@Kyle J.

This particular property is 1.5 hours away so it is hard for me to do showings since I property manage myself.  I could not find a trustworthy management company in the area.  And I will definitely have to double check if cozy accepts credit cards. I have only had one rejected applicant complain, so I made sure I followed up by mail with a formal rejection letter for my records.

Natelya G. · Answer

@Scott Trench

Thanks, and by the way I am halfway through your book and find it very helpful.

Kyle J. · Answer

@Natelya G. I wouldn’t accept a check for the application fee.  Too easy for it to bounce or for the applicant to stop payment on it if they're not selected.

I also don't accept credit cards for the application fee because the applicant could dispute the charge if they're not selected, plus there's a processing fee associated with accepting credit cards.  It's just not a hassle/cost I want to deal with.

The way I do mine is I usually meet the applicant in person to pickup the completed paper application and the application fee (which they pay in cash and I provide them a receipt for).  This gives me another opportunity to meet with the applicant, talk with them, and look over their application to make sure it's filled out completely and correctly.  It's all part of my initial screening process, plus there's no concern with the cash not clearing or being disputed later.  :)

Scott Trench · Answer

Hi Natelya,

For me, tenants must complete a rental application form, listing personal information like their contact info, references (specifically their prior landlords, their current employer, and previous employers if employed for less than a year at their current job). I also ask for a release of authorization to allow me to call.

Assuming that the calls with their references go well, I ask them to complete a background check.

To me, it would be a red flag if the tenant was unable or unwilling to pay with a debit or credit card. Perhaps it depends on the area, but I expect my tenants in my city (Denver) to pay rent electronically, reply to text or email, and generally be able to interact with me in a way that is convenient for me.

I also suspect that if the tenants don't have a credit card, that they probably don't have good credit. It's certainly not always true, but that seems to be a trend that has been the case in my area.

So, bottom line, I personally would not accept an applicant that could not interact reasonably with me via email, that could not pay for the screening with a credit or debit card, and that was not willing to pay rent electronically.

That said, I have made exceptions in the past for inherited tenants from prior landlords.

How do you accept rental applications?

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