TL;DR:
A well-structured rental application helps landlords screen tenants fairly, legally, and efficiently. This guide covers what to include in a rental application, how to evaluate applicants using credit reports and background checks, how to handle application fees, and best practices to stay compliant while picking the right tenant.
A rental application is one of the most important tools a landlord has. It’s your first line of defense against late payments, lease violations, and costly tenant turnover. Done right, a rental application lets you collect consistent information, compare applicants fairly, and make decisions based on facts.
For new landlords, though, the process can feel overwhelming. Even for experienced landlords, staying on top of things can be tricky, despite how essential it is. Thankfully, it doesn’t need to be as hard to understand or manage your rental applications as you’d think.
Let’s dive into everything you need to know.
What is a Rental Application?
A rental application is a standardized form prospective tenants complete when applying to rent a property. It gathers personal, financial, and rental history details so landlords can assess whether an applicant is likely to pay rent on time, respect the property, and comply with lease terms.
A strong rental application lets you attract more tenants. For landlords looking to showcase their properties and streamline the application process, consider using the TenantCloud rental property website to market your listings, accept applications, and manage inquiries online.
- Compare applicants consistently.
- Reduce the risk of non-payment.
- Identify red flags early.
- Maintain fair housing compliance.
While formats vary, the goal of a rental application is to protect you and your property, and you’ll need a decent bit of information for this.
What Information Should a Rental Application Ask For?
Personal Information
The personal information a rental application collects usually includes:
- Full legal name
- Date of birth
- Phone number and email
- Government-issued ID (for verification purposes)
This information helps confirm an applicant’s identity and avoid any potential fraud or duplicate applications.
Employment and Income Details
Understanding how much an applicant earns is essential for assessing affordability. It makes sure you know they can afford to rent the property. Most applications ask for:
- Employer name and contact information.
- Job title and length of employment.
- Monthly or annual income.
Many landlords use the 2X or 3X rule, where tenants should earn at least double or triple the monthly rent.
Rental History
A tenant’s past behavior renting a property is a great indication of how they’ll treat yours. Asking for this lets you verify previous addresses, the reasons for leaving, length of tenancy, and more.
How to Evaluate a Credit Report and Credit Check
Why a Credit Report Matters
A credit report or credit check gives insight into how an applicant manages financial obligations. It doesn’t tell the full story, but it’s a valuable tool for identifying patterns, like repeat late payments, high debt, or collections.
Credit checks usually reveal:
- Outstanding debts
- Credit score range
- Payment history
- Past bankruptcy
As much as the numbers can say with this, they shouldn’t be the sole focus. Instead, landlords should also focus on:
- Consistency of payments
- Recent financial behavior
- Debt-to-income ratio
Context matters with this, as some applicants could have lower scores because of student loans but will still pay on-time.
Running a Background Check on Perspective Tenants
What a Background Check Shows
A background check helps landlords identify potential safety or legal risks. Depending on your screening service and local laws, it can include:
- Criminal records
- Eviction history
- Identity verification
TenantCloud has a detailed overview of what a background check shows and how landlords should interpret results, and this can always be helpful.
Best Practices for Background Checks
Landlords need to stay legally compliant with their background checks. To do this, a few simple steps are worth following, with these including:
- Always obtain written consent.
- Apply the same screening standards to every applicant.
- Avoid blanket policies that may violate fair housing laws.
Use background checks as one part of a broader screening process instead of the sole deciding factor.
Understanding and Charging an Application Fee
What is an Application Fee?
An application fee covers the cost of processing an application, including background checks and credit reports. These fees help landlords avoid absorbing screening expenses for unqualified applicants.
TenantCloud offers a helpful state-by-state guide on the application fee you can charge that outlines legal limits and regulations across the U.S.
Legal Considerations for Application Fees
Rules around legal fees can vary from state-to-state, but there are more than a few common regulations to be aware of. These are:
- Caps on application fee amounts.
- Disclosure requirements.
- Refundability rules.
In real terms, this means landlords need to take a few specific steps:
- Clearly explain the amount.
- Explain what it covers.
- Collect fees consistently from all applicants.
Not only could this be legally required, it also builds transparency between you and whoever ends up renting your property. Speaking of legalities, fair housing laws can affect rental applications and the overall process, making this worth getting into a little deeper.
Fair Housing Laws and Rental Applications
Staying Compliant
Fair housing laws prohibit discrimination based on protected characteristics like race, religion, gender, disability, or family status. Your rental application process must be neutral and consistent.
To stay compliant, you’ve to:
- Use the same application form for every applicant.
- Apply identical screening criteria.
- Avoid subjective or overly sensitive questions.
These help make sure you don’t fall short of any fair housing laws.
Questions to Avoid
In real terms, you can do this in various ways. For many cases, this means avoiding asking more than a few specific questions. When you’re renting out a property, you should avoid asking about:
- Marital status
- National origin
- Religious affiliation
- Plans to have children
Asking about any of these could be a legal violation. You’re much better off focusing on financial responsibility and tenant behavior during the process.
How Tenant Screenings Fit into the Application Process
A rental application is just one part of a broader tenant screening strategy. Screening combines application information with verification steps to give a complete picture of each applicant.
Effective tenant screening might include:
- Income verification
- Credit and background checks
- Reference calls
- Rental history verification
When done properly, screening reduces turnover, protects your property, and improves long-term profitability.
Digital vs. Paper Rental Applications
Landlords have the choice between digital and paper rental applications, with both of these offering their pros and cons. Before making a decision on which one you should go with, it’s worth going through whether either of them could make sense for you.
Benefits of Online Rental Applications
Digital rental applications have become the standard in most states, and there are plenty of reasons for this. They help to make the application process easier, with some of the more notable advantages being:
- Speeding up the process.
- Reducing the need for physical paperwork.
- Improving the accuracy of applications.
- Storing records safely and securely.
These help to make the rental application process a whole lot more straightforward. But, that doesn’t mean paper applications don’t have their advantages.
When Paper Applications Still Make Sense
Paper rental applications might seem outdated, but that doesn’t mean they don’t come with a few advantages. They could also be the perfect option in a few specific situations, with some of the larger of these being:
- Small portfolios
- In-person showings
- Applicants without internet access
Paper applications can be great for these, but digital ones can also be a decent option. Sometimes, a combination of both can be an option, but it’s worth staying consistent with your applications from the start. Pick one and stick to it.
Common Rental Application Mistakes to Avoid
Mistakes can happen, but that doesn’t mean you need to go through them. Some of these are more common than others, which makes them easier to avoid when you know about them. These include:
- Inconsistent screening standards.
- Ignoring local application fee laws.
- Over-relying on credit scores.
- Failing to document decisions and agreements.
By knowing about these ahead of time, you’re in a much better position to avoid them and any potential consequences they could come with.
FAQ
Can landlords charge an application fee?
Yes, but rules can vary from state to state. Always check local regulations and disclose the fee clearly before collecting it.
How long should I keep rental applications?
Most landlords keep rental applications for at least one or two years in case of disputes or fair housing claims, but this is more of a best practice than anything else.
What credit score should I require?
There’s no universal standard. Many landlords focus on payment history and income rather than a specific score.
Can I deny an applicant based on a background check?
Yes, as long as the decision is lawful, consistent, and compliant with fair housing laws and local regulations.
Final Thoughts
A well-designed rental application sets the foundation for a great landlord/tenant relationship. By collecting the right information, using tools like credit reports and background checks responsibly, and following fair housing laws, landlords can reduce risk and attract quality, reliable tenants.
Whether you manage one unit or a growing portfolio, investing time in your rental application process pays off in fewer headaches, better tenants, and more stable rental income.
