|
A rental application is a form from which you will be able to make a confident choice about whether or not to rent to your applicant; so it’s not just a formality. This decision will be almost entirely based on the applicant’s past rental and payment history as well as their current earnings based on their pertinent financial situation. An important point to make sure of is that you are legally entitled to ask certain questions, and that these questions can determine if this prospective tenant is qualified to sign your lease agreement. Now there are some basics that you will need to have on your rental application, such as: full legal name, current address, and social security number of your applicant; but, you should also collect his or her current earnings which can easily be found on their pay check stub, and you should also inquire of their bank account information. Income verification and the length of time the applicant has been at their current job can give you a better sense of the applicant’s financial strengths of weaknesses. A good rule of thumb is to make sure they are currently grossing at least three times the amount of your rent on their monthly pay checks. Now some things you need to be wary of, if the applicant has changed employment often or has suspicious gaps in their job history, you may want to pause. Unfortunate but true, a regular pattern of changing places of employment may mean less stability with financial situations, and a pattern of moving locations in general might raise a red flag for you. However, don’t jump to conclusions. This is where the applicant’s banking information can prove fruitful. Banking information can give you a basic overall idea of the applicant’s big picture financial stability. The more assets, the better you should feel about his or her ability to come up with the rent should that person lose their job. Another necessity is to find out what other financial obligations the applicant has. Do they owe credit card companies, auto companies, banks for student loans? If they do you must consider this in your decision. Remember all of these bills have to be paid out of their income as well, so how much room does that leave for them to pay you? You want to gather information on the following: - Credit cards: How much do they owe each card each month? Are they behind on payments?
- Other loans and loan balances: how much do they owe and to whom?
- Do they have any other debts?
Your intention here is to establish a pattern of payments and to see if there is enough left over to pay your rent with a little left over. You MUST do a credit check for each and every applicant. Just bear in mind that your applicant can have excellent credit and barely be making enough to pay your rent. In order to screen your applicant in the best way possible, make sure you ask the following questions: - Have you ever declared bankruptcy?
- Have you ever had a home and gone through foreclosure?
- Have you ever been evicted?
If anyone says yes to either of the first two questions, let them know they still may be able to rent from you, but that you may need to collect more information from them. You will let them know. If their past history shows financial instability and mountains of debt at various junctures in their life, you will want to check out their current job and do a thorough income verification procedure on them. The past doesn't always equal the future, but you need to make pure positive that they have turned their money situation around completely. All of these things are vital to obtaining the ideal tenant. You may want to rent to a person based on likeability alone, but when it comes down to the monthly rent, no matter how much you like them, it will be no substitute for the green.
Related Articles -
rental, application,
| 
