Posted over 6 years ago

Using Your Rental Application To Screen Out Bad Tenants

A rental application serves as a landlord's first line of defense in screening out bad tenants. This tool should provide enough personal and financial information to accurately determine the risk of renting to that person. Moreover, a well-written application asks questions about that person's rental and employment history. But do you still need one if you're renting your property to someone you know? Absolutely! If you don't, you may be facing those same people across the courtroom when they fail to pay the rent. 

Whether you use a rental application you find online, from a professional association, or one you create yourself, there are certain elements it should contain. Here's a few of them:

Personal Information: Get The Basics

A good rental application will have a space for applicants to insert their date of birth, driver's license or ID number, phone and email contact information, and current address. Surprisingly, you do not need an applicant's social security number to do a background check. You will need all of the other information, however,  to do a credit and background check. Even if you use a third party, get this information for yourself so you have a record of it. Photocopy all identification yourself. If an applicant forgets to fill out his birth date, you can double check it before doing a credit check yourself. For references to attest to their character, ask them to provide a list of people they are not related to.

Applicant Life History

No, it's not necessary to know where someone went to elementary school, but an applicant's life history should cover places and time periods of employment within past five years, past residences with landlord contact information, as well as all family members, siblings, friends, etc who will be occupying the property. List their ages too. Anyone 18 years or older should fill out a separate application as well as a credit and background check done.

Financial Information

Skip the credit card information - you can see that on the credit report. Although employment income and banking information are key to determining if an applicant can swing the rent payment, some applications don't have space to provide this information. Make sure yours does. Take care to scrutinize length of employment, and red flag someone who has had two or three different jobs within a two year period. If your applicant provides bank statements to verify direct deposit, note when deposits occur; It may be difficult for some applicants to provide your rent on the first, if their payday falls on the 15th.  

Ask The Hard Questions

Sometimes it's better to ask the hard questions in writing. What's a hard question? Here's a few: Have you ever filed for bankruptcy? Have you ever been evicted? Have you ever been convicted of a felony? If an applicant is dishonest about an answer, then you can and should forfeit the application. Renting to liars isn't prudent. If your applicant checks yes to one of these questions and offers an explanation, it may indicate you're dealing with an honest person who may end up being a good tenant. You can always charge a higher deposit and choose to place the tenant on a month to month tenancy rather than a year lease.

Other questions you'll want to know is if the applicant owns any pets. If your homeowner's insurance doesn't allow aggressive breeds of dogs, for example, list them. Include space for breed as well as age and weight. Make sure you stress "adult" pets. Ask for proof of current vaccinations with dates (rabies, especially) and  alteration certificates (neuter or spayed). An altered pet won't breed puppies or kittens. 

Application Fee and Consent

Provide a box for applicants to check that they have read your rental criteria, and that they acknowledge and consent to a credit/background check by signing your application. You should also include a copy of the Federal Credit Reporting Act of an Adverse Action notice in case your applicant is denied. You will have to send them a form letter if they request it.  Don't be shy about charging an application/background check fee. Some prospective tenants may balk at paying a fee, but the truth is, it will help screen out non-serious applicants and "professional deadbeats" who prey on newbie landlords.

Please share any screening methods you've done to find good tenants as well as other information you ask of your applicants. All comments are welcome!