When you become a landlord, you should understand the rental application process. Even if you hire a property management team, you should know this process.
If you’re a new landlord, this beginner’s guide to rental applications is necessary for you. Let’s look at some of the things you should know about the rental application as a landlord.
What is a Rental Application?
A rental application is simply a form used to collect the necessary information from a prospective tenant. This information will be used to help determine if the prospective tenant is a good option as a tenant. Commonly, the rental application will include sections to collect the following information:
- Contact Information
- Employment History
- Income
- Rental History
- Credit Information
- References
It’s a bit like a job application and needs to be reviewed. The rental application also provides the necessary information to run background, credit, and rental history checks. Typically, an applicant will pay a small fee, which covers the cost of a credit check, background check, and any other checks for screening purposes.
Running Background Checks
After receiving a rental application, you will want to screen your tenants. Hiring a property management firm will ensure this is done correctly without worry. However, you should still understand the background checks.
Most landlords will run three checks:
- Credit history check
- Rental history check
- Criminal background check
A credit history check can show you the payment history of the potential tenant on things, such as car loans, credit cards, etc. It’s also possible to see if past landlords have judgments or collections out with the potential tenant.
When you run a rental history check, you will be able to see the payment history of the potential tenant from past rentals. This type of check will show you if they missed payments, were late, or broke their lease with another landlord. You will also be able to see any evictions on their record.
Of course, the criminal background check will tell you if the potential tenant has committed past crimes. Some crimes in the past might not be a big red flag, while others could be. It will be up to you to determine what you prefer to look for on a criminal background check.
What’s Necessary to Run a Tenant Background Check?
When you collect the rental application, you will need written consent from the applicant to run a criminal background check. You will also need their name, date of birth, social security number, and current address.
How long are the rental application and tenant screening process?
The process to screen tenants starts with a rental application. Once it’s received, the time it will take may range from one day to one week to get the necessary background checks done. A property management company might be able to get the process done quicker than you can on your own.
How much should be charged for a rental application?
Landlords often charge anywhere from nothing to $150 per application. The fees for the background checks will often run from about $25 to $75.
If you’re ready to become a landlord, understanding the rental application process is important. You can hire a property management team to take care of the tenant screening, but you should still understand the basic rental application process.
