Key Questions to Ask in a Residential Rental Application

A rental application is more than just a means of gathering data on paper. It is a document from which you can better make a determination about a potential candidate, based on both past history and the current earning situation of the individual (or individuals) looking to become your tenants. Therefore, you need to ask the right questions to ascertain information that will help you build an accurate profile of the potential candidate(s).

Along with the basics -- name, address, social security number -- you should ask for income and bank account information. Income information, along with the length of time the individual has been at his or her current job, can give you a sense of the individual's financial stability.

Determine the monthly amount a person can reasonably afford in rent by calculating roughly 30 percent of his or her monthly salary. For example, if you are asking for $1,100 per month, you should consider only those candidates earning $3,500 per month or more. Such a candidate should be able to afford the rent, at least based on available income information.

Of course, if the individual has changed jobs often or has unexplained gaps in their employment history, you may not be as confident. A pattern of moving around in jobs may mean instability with financial matters, and/or a pattern of moving around in general. However, don't jump to assumptions. This is where the individual's bank account information can prove helpful. Bank account information can provide you with a basic idea of the individual's overall financial situation. The more financial assets, the more confident you should feel about the applicant's ability to pay rent should the person lose his or her current job.

Another area to evaluate is the additional financial obligations of the applicant. If the applicant has many other financial obligations such as bills, loan payments, and other debts, then putting 30 percent of his or her monthly salary toward rent may become an unreasonable financial burden. Therefore, you will want to gather information on each of the following:

  • Credit cards payments: Does the person pay on time? Do they have substantial credit card debt?
  • Outstanding loans and loan balances: How many and how much?
  • Other debts and obligations, if any.

The objective here is to establish a payment pattern and to determine if there is enough left over to pay rent with some "wiggle room." Yes, you can (and should) do a credit check on candidate you are considering. However, someone can have an excellent credit rating yet still have barely enough money left over for rent.

Before running a credit check, you can also ask some basic questions, such as:

  • Have you declared bankruptcy in the past seven years?
  • Have you had a property foreclosed on in the past seven years?
  • Have you had three or more late rental payments in the past year?

Let applicants know that you are not necessarily going to refuse them the home or apartment based on their past history. However, if past history shows financial insecurity and debt at various points in time, you will then need more data confirming the stability of their current financial status. Of course, the past is certainly not an accurate predictor of the future, but you need to be very confident that an individual with a history of late rental payments or a foreclosure has turned his or her financial life around.

Personal information on an applicant is more difficult to obtain. Why? Because you do not want to cross the line and ask questions that could be misinterpreted as biased or prejudicial, or that violate any discrimination laws. You may therefore opt instead to list your general parameters and have the applicant check off that he or she has read them.

For example, your rental agreement might say something to the effect of Please check off that you have read each of the following rental policies and will abide by them:

  • There are no pets allowed on the premises.
  • Subletting the apartment is only allowed with the written permission of the landlord 60 days in advance of the commencement of the sublet agreement.
  • Only one parking space on the premises may be used for the apartment. All other parking will need to be on the street.

This is one way letting applicants know the rules in advance so there is no miscommunication.

Visit the Forms and Agreements section to read a sample Residential Rental Application.

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