- How Much Money Is Needed To Invest In Rental Property?
- Should A Real Estate Investor Get An Agent’s License?
- 5 Big Factors That Affect The Costs Of Renovating Your Home
- SIBOR Hike – What You Can Do With Your Current Loan
- 6 Basic Don’ts Of Real Estate Negotiation Tactics
- Will New Condo Relaunches Trigger The Great Property Sale We Have All Been Waiting For?
- 10 Proximity Amenities That Add Value To Real Estate
- How To Get Personal Loans More Easily With Good Credit
Drafting A Rental Application Form For Potential Tenants
It’s a good thing that you have the right to select your tenants as a landlord. It’s not that you want to be choosy and discriminate. Landlords just want to collect timely rentals with tenants that seem least likely to cause problems. It really is not an easy problem to solve when neighbours consistently complain about your tenants. Prevention is better than cure.
In a proper company, human resource managers screen job applicants via their resumes. Real estate investors use a rental application form that tenants are required to fill up. These are not tenancy agreements or rental terms. It is a very basic way to screen and qualify potential tenants. Consider charging an application fee to sieve out spammers from genuine tenants. Here are the main items to include in your draft.
You Need To Know: Difference between refinance and remortgage
Note that this is a general guide. The laws of your land may dictate what you can do or cannot do. Remember to check the legality of your application form before going ahead with one. Using a lawyer is always the safest bet.
Basic information. It is hard to imagine any application form without fields to input the applicant’s basic information. Here is where you want collect their full names, identification number, contact number, email, etc. You might also want to ask for their Facebook profile to learn more about them.
Other occupants. This is where the applicant should list down each person that will be living in the property. People to include are spouse, children, colleagues and relatives. Consider getting each person to fill up the application form.
Rental history. Get the tenant’s current address and the contact number of the landlord. Although landlords are competing with each other, helping each other out with basic reference information is common practice. Every landlord will appreciate the help in return when they are screening their own tenants. You will be able to learn about the tenant’s payment timeliness by just asking.
Employment. The main concern is whether the tenants has the ability to pay the rent. And it helps alleviate your concerns when the tenant has a stable job for a number of years. Obtain the employer’s name, address and contact number. The tenants should also state his salary and housing allowance (if any). This will give you a good gauge on his capacity to pay rental. If information from the employer does not tally with the information provided by the tenant, it is a sign that he is not truthful.
Credit reports and bank balances. If a tenant already has a credit history that resembles a war zone, you have to wonder how dependable he is on paying rentals promptly. A person’s creditworthiness can be judged by taking a look at his credit report which can be obtained from the Credit Bureau. They will have to obtain it themselves or authorize you in writing to obtain it for them. The report will cost $10 or less and list down all the credit cards and loans that he is liable for. It will also show how promptly he has been making repayments. The next thing you want to know is how much savings your tenant has. They might be uncomfortable showing you their personal bank statements. So at least ask for an estimate how much they have in their savings. The credibility of their answer have to be judged by yourself.
Personal references. There is a reason human resource asks for applicants to include personal references in their resumes. You might assume that the references listed are probably friends who are trained by the applicant to say nice tender things about him. But you will be surprised at how many “friends” actually do not have nice things to say about their peers. Ask for at least 3 references.
Date and signature. Any application form you find in any proper organization will require the applicant to sign off and date it. You should be doing the same. Request for each page to be signed if you are really meticulous. This is a declaration by the applicant that all information provided by him in the form is true as far as to his knowledge. You should also include a line which states that by signing the form, you are granted permission to verify all information contained in it. The date is important as there might be deadlines like “2 weeks” or “1 month” to adhere to. Dating the form will eliminate any miscommunications in future.