6 Ways to Strengthen the Rental Application

VOLUME V

By Jonathan Pressman

Realtors want to get their clients approved for the first single-family home or condo rental they apply for. Unfortunately, that’s not always realistic. There are, however, certain tips that Realtors can use to help their clients strengthen a rental application, increasing the likelihood of getting approved for the first choice. Here are six suggestions.

1. Ask for More Money Up Front

Whenever landlords agree to lease a property to a tenant, they assume certain risks, like nonpayment or damage to the property. In addition to a security deposit to guard against property damage, offering more money upfront can provide an extra layer of monetary security for property owners.

2. Use a Guarantor

Guarantors provide a personal guarantee to repay a debt or rent, serving as a backstop in the event tenants are unable to make their payments. Landlords and property managers want to see that tenants have the means to pay their rent. Guarantors are an important addition to applications for individuals with low credit, limited funds or a lack of income history.

3. Sign Up for a RentSURETY Agreement

Inquire with prospective tenants about whether they’d be willing to agree to programs like RentSURETY. A RentSURETY Agreement offers tenants a means for giving a landlord added financial security. For an average monthly installment of around $55 paid for by the tenant, RentSURETY provides the landlord with a guarantee that the rent will be paid in full for up to 60 days if a tenant fails to pay or vacates the property prior to the end of the lease term. RentSURETY acts as an insurance policy for landlords against prospective tenants with a less-than-stellar application. Then, if needed, RentSURETY will pay the rent retroactively from the date of nonpayment.

4. Thoroughly Complete All Documentation

Thoroughly completing the entire application—along with submitting all supporting documentation—can go a long way to expediting approval. If a landlord or property manager has two competing applications, they may be inclined to select the one that’s already completed in full, simply for convenience’s sake.

5. Include a Cover Letter (and References)

Writing a cover letter can help tenants distinguish themselves from other applicants and give the application a personal touch. A cover letter is also useful for sharing more information about the applicants, including their job longevity, interest in the home and financial background as reliable tenants. Applicants can also include reference contact information. The ideal reference for a lease application would come from a previous landlord, who can attest to the individual’s record as a tenant. For those renting a home for the first time, a manager or coworker can serve as a reference, while students and recent graduates can ask teachers to vouch on their behalf.

6. Add a Letter of Explanation

The Letter of Explanation can be used to assist in answering questions that may make the property owner hesitant to rent to the applicant. Unlike the cover letter, which is used to highlight the best reasons to rent to these tenants, the Letter of Explanation brings up past rental concerns (i.e., sketchy credit report, background check problems, evictions) and what preventative measures have been taken to avoid these issues from happening again.

The key to strengthening a rental application ultimately rests in being able to convince a landlord or property manager of a tenant’s reliability and trustworthiness. In a competitive market, everything Realtors can do to strengthen a tenant’s application can be the difference between approval and rejection.

The Ins and Outs of Working with Investors

While tenants of rental properties focus on factors such as property quality, location and monthly rent, investors may focus on one overarching factor: return on investment. Here’s what Realtors need to know about how investors generally decide whether they want to invest in rentals.

Rental Inspections: Don’t Wait Until Move-Outs Only

Move-in/move-out inspection and periodic inspections are important aspects of managing a rental property. By better understanding what to look for during inspections and how often to schedule them, it is possible for landlords to avoid common mistakes.

Creating a Go-To Contractor List

Agreeing to a contractual relationship, such as a service maintenance agreement, with a vendor could significantly speed up any frantic searches—especially during emergencies and late-night hours.

Navigating Out-of-State Rental Properties

Today’s housing market is a bit of a seesaw. In 2022, the Federal Reserve hiked its benchmark interest rate six times. Higher interest rates mean loans are more expensive for consumers. But no matter what happens with inflation, people need a place to live. This is leading property owners to look for a means of disposable income. And sometimes the real estate investor may choose a property from another state.

Is That Emotional Support Animal Legit?

It can be difficult for landlords to tell if someone has a legitimate ESA or simply a pet. Banning a tenant with an ESA could lead to legal action against the landlord. Fortunately, there are ways that landlords can fairly differentiate between the two to comply with the Fair Housing Act.

Repairs: Who Pays for What?

For a landlord, a rental property is an uphill battle against mishaps, calamities, the hands of time and sometimes nature itself. To guard their investment, property owners must plan ahead, maneuver tactfully and sometimes be prepared to cut their losses.