Landlords take a big risk when renting their properties out to strangers. The rental application may be the only information the landlord has about an applicant. Capturing all the information needed to make a reasonable decision about a potential tenant’s suitability to rent is essential to avoid dealing with late payments, property damage, and more. Here are the top five things we look at here at Douglas Realty when reviewing rental applications:
Income & Income Stability
The first thing a landlord should verify is the potential tenant’s ability to make the rent payments. An applicant that cannot show enough income to cover the rent payment, along with other reasonable expenses and some cash left over, should be immediately red-flagged for more information. It may be that they need a co-signer on the lease, or they intend to start a new job soon, but do not make any assumptions. Always ask and verify to be sure.
Equally important to sufficient income is income stability. Not everyone has income from regular employment, but any applicant should prove that they can reasonably expect to receive their income regularly enough to cover the rent payment every month. Recipients of government funds should be able to show statements of such. Renting to the self-employed can be particularly complex, as self-employed individuals often get paid at irregular intervals. Asking for evidence of the self-employment income from the applicant’s tax returns is the best way to verify their income and decide on their ability to pay rent.
Rental History & References
Any rental application should include a section for both rental history and rental-related references. Each entry should be verified. Do not simply take an applicant’s word about good references. A quick call can prove the previous landlords felt quite differently. The immediately previous landlord is of particular interest, as you will want to know their view on the applicant’s reason for leaving. If an applicant has no rental history, you will need to do even more legwork to get the evidence about their reliability. In some cases, you may want to require a co-signor.
Background Check, Including Criminal & Evictions Histories
Conduct the most extensive background check allowed by law on all applicants who show satisfactory income and rental history. This background check should include a criminal history, if any, and evictions history. A history of eviction or certain crimes should be a red flag that more investigation needs to be done before approving the application. Always have applicants acknowledge in writing that they consent to a background check, criminal history check, and eviction history check. Verbal consents may not be binding by law.
Credit History & Score
A complete credit history, including the credit score, should also be pulled to assess the applicant’s reliability in paying back debts. The credit history should have less bearing on the decision to approve or deny the application than the previous items mentioned, but it can help you better visualize the applicant’s financial situation. As with the background check, always require consent for a credit check in writing.
Consider certain lifestyle factors before approving a rental application. It is acceptable to ask about smoking and pets under Florida law. If you prefer no smoking on your property, you will want to pass on applicants that smoke. The same goes for pets. Unless you have a pet policy the applicant agrees to follow in writing, pass on applicants who acknowledge they have pets. Be careful asking about lifestyle though, as asking about certain things is illegal, including:
- National origin
It is your right to screen all rental applicants for your properties. Your properties are investments that you must protect. Carefully design your rental application to gather all the information you can by law, and be sure to follow through in checking out everything the applicant claims. As long as you put in your due diligence, your rental properties will be profitable ventures. If you have properties in or around Ft. Myers and need quality property management services, call the experts at Douglas Realty & Property Management. We thoroughly vet all rental applicants to be sure only the safest, most trustworthy applicants are approved. Call us at (239) 542-6906 to see how we can make managing your properties easier than ever.