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When it comes to snagging the perfect rental, sometimes it can feel like luck of the draw – particularly if multiple would-be tenants are interested in the property, and tons of rental applications have rolled in.
So what exactly does a landlord look for in a tenant? Are there any secrets to rental success?
The answer is yes, and the secret formula is actually pretty simple. Landlords and professional property managers alike want tenants who will pay rent on time, maintain the property that is leased to them, and not disturb other tenants. The challenge landlords face is determining measures of risk, as there is not a definitive solitary metric that signals who will be a great tenant.
Most landlords will use a combination of screening measures to help determine if a tenant is a good fit, but it’s not perfect science.
However, there are several screening criteria that landlords rely heavily on. Understanding what landlords are looking for, and why, can be the key to strengthening your rental application, and ultimately landing the perfect rental.
1) Good Credit
Before you submit your rental applications, it’s a good idea to check your credit report– both for accuracy of information, and to understand what your credit score is.
There are three primary credit reporting agencies: Equifax, Experian, and TransUnion. Although calculations can vary slightly between the three bureaus, each will produce a consumer report with a FICO score denoted.
A FICO score consists of five areas: payment history, current level of indebtedness, types of credit used, length of credit history, and new accounts.
FICO scores vary slightly in numerical range from 300 to 850, depending on the reporting agency, but in general credit scores are reported as: Very Poor/Bad, Bad, Fair, Good, and Excellent. Most landlords should have a minimum score or a target range as an application threshold. As an applicant, you are entitled to know that screening criteria.
If your credit score is not where you’d like it to be or below the given rental application’s minimum acceptable category, there are a couple of strategies you can offer:
- Offer to add a co-signer to your lease or rental agreement.
- Offer a larger security deposit. Before you plunk down extra cash, do check state laws though, as many states have legislated the maximum amount a landlord or property manager can collect and hold as a deposit.
2) Income and Employment Verification
Having good credit is only part of the application puzzle. Landlords want to know that an applicant has a sufficient, reliable source of income that will allow them to afford the rental, and that the applicant’s debt-to-income (DTI) ratio will be sustainable for the duration of the lease. For example, many landlords may want to see housing debt not exceed 43% of household income. Higher DTI’s correlate with an increased default risk, in that there may not be enough income to cover rent, in light of other expenses. So it’s understandable that landlords will carefully view sources of income in making their tenant selections.
Sources of income, however, can come from a variety of means. Landlords can ask for a traditional W-2, Leave and Earnings Statement (LES), 1099, or proof of disability or social security income, annuities, or other income sources, such as child support or debt settlements.
The Fair Housing Act (a federal law) doesn’t bar landlords from discriminating based on an applicant’s source of income. However, many states and local city or county municipalities have enacted legislation that landlords cannot discriminate based on the source of income, such as an applicant using a Section 8 housing voucher. As a potential tenant, take a quick look at your state’s landlord tenant law, for any income screening guidelines.
3) Dings that Could Disqualify on the Consumer Report
In addition to a credit report and income verification, many landlords also use consumer reports, which are tenant background checks vetted through companies that aggregate and compile background information. These tenant background checks can include a variety of information, including rental and eviction history, credit, and criminal records to include any lawsuits in which you were a named party.
Landlords are allowed to use consumer reports to make tenant decisions, as long as they follow the Fair Credit Reporting Act (FCRA), which is governed by the Federal Trade Commission (FTC).
- Landlords must have a permissible purpose to initiate a consumer report and permission from the applicant.
- If adverse action is taken by the landlord, such as denying the tenant’s application based on information discovered in the consumer report, the tenant is entitled to notice of that fact, either orally, in writing, or electronically (some state landlord/tenant law may dictate how rejection notifications must be handled).
Landlords must be transparent in the screening criteria they use for tenants, as well as follow the Federal Fair Housing Act. As long as landlords are applying the same criteria gleaned from consumer reports equally for each applicant, the scrutiny is valid in processing tenant applications.
- If you know negative history is going to pop up when you’re asked to submit a screening questionnaire, you have two choices: keep mum and wait for the landlord to discover it, or come clean early and offer an explanation for a less-than-stellar report.
- Depending on circumstances, such as a divorce that destroyed your credit, landlords can choose to work with you. But upfront honesty is usually the best policy in these situations.
4) Solid Rental History or Homeownership
While your credit and consumer reports provide a glimpse into how well you manage your finances and other obligations, landlords will often ask for your rental and/or homeownership histories in making their decision, as well as a reference for each address.
Longer periods of time at each address do suggest a more stable renter or homeowner, so as a military family, if you’ve averaged a new address every 18 months, it’s worth selling yourself to a potential landlord that you like to move once and done at a new duty station!
5) Pets, Smoking, and Good First Impressions
It’s true what you’ve heard regarding first impressions: they can make or break an application. All other things being equal, take the time to make the best first impression you can.
- Arrive on time, and submit any documents requested in a speedy manner.
- Be honest about your pets and be prepared to show current vaccinations and health records.
- Arrive neat, clean, smoke-free, and well-groomed. It is an extreme rarity that a landlord will allow smoking in their units, thus if you are a smoker, pay particular attention to presentation. Getting out of your car and flicking a cigarette butt on the ground won’t win you any favors with a would-be landlord.
- Skip the perfume and cologne for any showings.
- As you take care with your personal appearance, do the same with your mode of transportation. A car full of junk or litter doesn’t bode well to a landlord that you will treat their property any differently.
- Nix the negativity. This may sound incredibly basic, but if you are a rotten person to be around during the property showing and have a horrible attitude, you are checking all of the wrong boxes for a would-be landlord, suggesting that you’ll be a difficult tenant. Do yourself a favor, and be nice! It doesn’t cost a thing, and really can make a difference.
A Few Final Thoughts
Tenant turnover is the biggest expense and source of anxiety for landlords. Any amount of suspense you can remove from that process could mean the difference in being approved for the lease– or a pass.
- Consider offering a longer lease term, such as two years, if it’s an ideal rental and you’ll be in the area.
- If you have a pet, offer the landlord a chance to meet your pet or consider providing pictures.
- Consider a higher deposit (within state-legislated legal bounds) if you have a ding on your application or pets.
- Arrive with funds, a (current!) credit and consumer report in hand, income and employment verification, and be ready to put down a deposit. Now that you know what landlords will be looking for, come prepared and ready to take action. If you do pay a deposit on the spot, ensure you get a receipt.
Want more tips on being a great tenant? We've got you covered with 6 Tips for Being a Tenant that Landlords Love.
