Finding your next great tenant starts with the rental application. Not only is it the first step in the tenant selection process, but it's also essential to placing excellent residents in your rental properties.
Rental applications help you gather crucial information about someone who wants to rent your property. Of course, you want and need that information, but you must also be sure a basic rental application form is set up and processed legally. In other words, there are some things you're not allowed to ask and some things you aren't allowed to do with the information you collect from potential tenants.
To protect yourself and anyone you screen for tenancy, make sure you set up the application in a way that gives you information and doesn't violate Fair Housing Laws. You also need to work with companies that follow FCRA regulations to protect private information when you screen your tenants.
Here's what to consider about the rental application process.
Applications Must Be Processed the Right Way
Just having a good application isn't enough. Property owners must also properly process the application.
That means giving equal weight to every application and ensuring each one is scrutinized and handled fairly. Use the laws and any tenant criteria you have to find the best person for your rental property.
To reduce any chances of misusing the knowledge you gain from potential tenants, you may want to consider a rental application template that follows local and federal housing laws. With a good template, you're only collecting what you need and still have all the required information to vet applicants thoroughly.
What Can You Do With the Information You Collect?
After you've collected critical information about a prospective tenant, what's next? Here's what you can (and should) safely do with the information you collect in the application.
Run a Criminal Background Check and a Credit Check
When they vet tenants, rental property management companies run criminal background checks. Of course, the decision made about renting to tenants with a criminal history depends on the crime, how long ago it took place, and other factors.
It's crucial to follow the law when weighing a prospective tenant's criminal history as part of your criteria for renting a property. A property manager can help you with this process and guide you through considering convictions, especially for violent crimes, when deciding whether to rent to a potential tenant.
Criminal history isn't a protected class, so you're within your legal rights to refuse to rent to a tenant based on criminal convictions that come up in a background check. However, blanket policies that exclude anyone with any record violate federal housing laws.
Along with a background check, most property owners and management companies run a credit check. Generally, you want to look for tenants who have good credit scores because those tenants are more likely to be able to pay their rent on time.
Someone with an average credit score may also be a great tenant, especially if they're young and just starting to build up their credit.
Verify Rental History and Talk With Past Landlords
Most rental applications ask for rental history. If a person has ever rented a home before, you want to make sure they haven't had an eviction or other problems that indicate they could be a bad tenant.
However, some people haven't rented before and don't have a rental history. That's not necessarily a bad thing. They might be moving into their first place on their own or have never previously owned a home. Sometimes, no rental history is better than a negative one.
For anyone who has a rental history, reach out to previous landlords. Ask if that property owner or management company would rent to the person again. Did that person fulfill their lease obligations? Did they get their deposit back?
Finding out whether a past property would welcome a tenant back can help you decide whether to rent to them.
Verify Income and Employment
Delaware County property management companies also check a potential renter's income and verify employment. You'll want to do the same to make sure they can pay their rent on time each month. If the tenant makes enough money and is gainfully employed, you can feel more secure renting to them.
It's not a guarantee, of course. Still, a strong income and employment history reduce the chances that a tenant won't make their rent payments or they'll experience economic and financial issues during their lease period.
Your rental application should have a place for a tenant to list at least two references who aren't friends or family. Calling or emailing those references can help you get more insight into the kind of person your potential tenant is and whether renting to them is the right choice.
However, keep in mind that a listed reference can be biased and that most tenants would never list someone who wouldn't give them a good reference.
Create a Rental Application Template To Process Tenant Screenings the Right Way
Vetting potential tenants requires a proven process and the right rental application template to place the best renters in your properties. That's where the best Delaware County property management companies come in! The Rentwell team helps property owners process rental applications properly to follow the law and place quality residents in rental properties.
If you aren't sure about setting up a legal, thorough rental process, reach out to our team. We'll handle finding your next great tenants to protect your investments!