The 2015 American Housing Data Survey revealed there were 48.5 million rental units in the United States. That same year, the Rental Housing Finance Survey divided up property managers into two distinct categories— individual investors and business entities. The first category is what most of us think of when we picture a landlord. By one estimate, there are between 10 and 11 million individual investor landlords, with many only managing a single property. Regardless of how many properties you’re managing, you’ll need reliable tenants in order to make any money in the business. That means finding people who will apply for your apartment. Here are a couple of things to know about the rental application process.
You’ll Need an Application Portal
Landlords have to possess certain qualities including the ability to be on-call 24 hours without losing their sanity. They also have to figure out the best and most efficient way for would-be renters to fill out an application. In most places, the days of paper applications are long gone. Filling out a paper application is about as common as writing a check to pay for a fancy steak dinner.
So if landlords shouldn’t even bother with paper applications, then what should they use? The obvious solution is an efficient online renters application that’s easy for tenants to access and doesn’t cost landlords much, if anything, to maintain. Look for a template that lets you view critical pieces of information that will help you determine whether or not this applicant would be a good match for your property. If you’re charging rent of $1,000 a month, it makes sense that you want all applicants to be making at least $2,500 a month in gross income, since that’s 2.5 times the monthly rent. The best online application template will let you see that income information as soon as you open the completed form.
You Have to Treat Applicants Fairly
Some landlords wrongly believe that housing discrimination laws mean you have to rent to anyone regardless of whether or not you like them, which is not the case. Instead, they’re designed to protect certain classes of people who are perceived to be more vulnerable. Let’s say you’ve narrowed things down to two finalists, but then you find out that one of the applicants is disabled. In that case, you can’t refuse to rent to someone simply because they use a wheelchair. If you have other reasons why they’re not a good match, that’s one thing, but saying, “This won’t work for you because of your physical limitations” is not okay. It’s also illegal to refuse to rent to someone because of their skin color, religion, familial status, national origin, or sex.
The Fair Housing Act doesn’t apply to every single landlord, though. If a landlord lives in the property they’re renting out, they may be exempt as long as the property contains four units or less. However, even in that case, you still can’t advertise in a way that could be seen as discriminatory.
If this seems like a bit much to keep track of, then you’ll need a real estate attorney who can explain things to you in a way that makes sense. In fact, landlords need such an attorney, anyway. They’re good for way more than just walking you through the particulars of the Fair Housing Act. For instance, if you live in the Garden State and want to rent out the mother-in-law suite in your house, a real estate attorney can tell you when you’ll need to buy additional homeowners insurance in New Jersey. Before you start taking calls from potential renters, you need to make a call of your own seeking local legal expertise.