How does the rental application approval process work?
The rental application approval process involves a prospective tenant providing all the necessary information for a landlord (or property manager) to make a decision.
After identifying that tenant’s creditworthiness and confirming their ability to pay rent on time and without hassles, the landlord then approves them for tenancy.
Since filling out this form might be confusing for the first time tenants, let’s go ahead and explore steps involved in the process (including common questions prospective tenants usually have about the process).
What do landlords look for in an application?
The two main questions landlords may have when reviewing applications are:
- Does the potential tenant pay their bills on time?
- Does the applicant have stable and sufficient income to reliably pay the monthly rent?
A rental application is designed to help landlords get accurate answers to these questions by conducting a credit report and background check.
Prospective tenants grant the property manager permission to check their credit score and other relevant information by filling out the rental application form.
The rental application approval process — step by step
Step 1: Gather documents
A potential tenant should first gather all required documents asked by the landlord. This usually includes:
- Proof of identity (driver’s license, passport, and/or proof of residency);
- Proof of income (pay stubs, bank statements, or tax returns);
- Social security number (undergo a background and credit check);
- Reference contact information (recommendation letters from previous landlords; work supervisors or colleagues may also be considered).
Step 2: Fill out the application
The next step is to fill out the rental application online or on paper.
Any other renters (adult roommates over 18) will also need to fill out the application.
The rental application form usually requires tenants to include the following details:
- Social Security number;
- Current living address;
- Contact information (email, phone number);
- Current employment, employment history and income information;
- Previous addresses and rental history;
- References from past landlords or from work;
- Emergency contacts.
Step 3: Pay the application fee
Landlords typically charge an application and/or a processing fee.
The cost varies, generally ranging between $25 to $75, and should accompany the rental application, so, if unclear, prospective tenants should ask the landlord what the application fees are in order to avoid any delay.
Step 4: Background and credit check
The goal of this step is for a landlord to see how financially responsible the potential tenant is.
Aside from credit history (which is mandatory), property owners also check the number of reported late payments, delinquent accounts and evictions.
Note: While no longer legally allowed to be part of the background check in some parts of the US, any criminal history is usually considered a red flag.
Step 5: Reference check
Most landlords ask for references from previous property managers, as well as work supervisors and, occasionally, acquaintances as well.
Good personal references can testify to a potential tenant’s character, integrity and reliability to their new landlord.
While references can be sent via email, it doesn’t hurt to have them in paper form as well and be sure to add contact information.
Step 6: Approval or denial
At this step the rental application receives a final decision.
When a property owner decides either to approve or deny the application, the tenant receives the answer in writing.
How long does it take to approve a rental application?
Typically it takes between one to three business days to hear back about the rental application.
The process tends to be faster when dealing with private landlords (since they just pull credit and look over your application materials by themselves).
The process may take longer if a tenant is dealing with a broker or property management company (due to longer wait times going through different entities to do the background checks).
- We recommend checking the laws in your county or state, since in some US states (like Texas) applicants can consider the application rejected if they don’t hear from the landlord after seven days.
What happens after the rental application is approved?
Congratulations! It is time to move forward. The next step of the rental application process is signing the lease agreement.
A lease agreement is a contract, and lays out the rights and responsibilities of both the tenant and a landlord. It ensures the tenant’s use of the property and guarantees regular payments of monthly rent for a specified period in tenancy.
Not all leases have the same structure (commercial and residential), but all have some common terms. These include:
- Names of the tenant and landlord (or their agents);
- Rent amount;
- Due date of rent;
- Description and location of the rental property;
- Expiration date of the lease.
The landlord will require the tenant to sign the lease, agreeing to its terms before occupying the property.
These days, this process happens seamlessly online via trusted services like PandaDoc instead of paper signing.
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