Finding quality tenants for your rental properties is crucial in running a successful rental business. However, conducting showings, following up on leads, and facilitating applications can be a time-consuming process. For landlords without professional property management in Washington DC, running to showings for applicants who are unqualified or not truly interested wastes valuable time. To combat this, should landlords require rental applicant pre-approval? Well, keep reading as we go over the benefits of rental application pre-approval and what this process looks like.
What Does Pre-approval Mean?
Pre-approval for a rental property means that the prospective tenants have gone through a process that proves they may qualify to live there. However, it’s important to note that a pre-approval doesn’t mean that the tenancy is guaranteed. Instead, it’s a way for landlords to see which applicants have the best chance of qualifying to eventually occupy the home.
Is Rental Application Pre-approval Necessary Before Showing a Property?
While it’s not necessary to pre-approve tenants before showing them a property, it’s a strategy that some landlords use to save time. After all, just because you have a lot of people interested in your rental property doesn’t mean they will all qualify to live there.
Keep in mind that not all tenants pay rent on time, and not everyone will treat your property with the same respect you would. Experienced landlords have seen it all, from damaged property to losing out on monthly income due to nonpayment of rent.
That said, before letting someone view your rental property, it’s encouraged for landlords to set up a rental application pre-approval. Property showings take up a significant amount of time. So, pre-approving prospective tenants can weed out those who don’t qualify. Thus allowing you can focus on those that do.
Next, let’s go over some of the biggest benefits of pre-approving tenants before showing a rental property.
Benefits of Rental Application Pre-approval
As most landlords know, there are tons of benefits of pre-approving tenants. For example, asking them certain screening questions and getting to know them a little better is crucial in finding a good fit for your rental property. Here are some of the other benefits of rental application pre-approval:
- Provides transparency to potential renters for tenant criteria
- Creates a guard against discrimination claims
- It gives landlords an idea of who will be living in the property
- Allows landlords to weed out people who may cause danger to the community
What Does a Rental Application Pre-approval Look Like?
Before you schedule a property showing with a prospective tenant, you should come up with a way to determine if they are qualified to live there. Some landlords even set up a pre-qualification stage before sending out a rental application.
Typically, this consists of pre-screening questions and possibly a meeting with the tenants before they fill out an application. If you’re unsure of what screening questions you can ask a prospective tenant, here are a few suggestions.
Pre-screening Questions to Ask a Tenant
- How soon are you looking to move?
- How long have you been at your current residence, and why do you want to move?
- Have you ever been evicted? Why?
- Our rental application requires a background check, are there any potential issues you’d like to disclose now?
- Can you comply with a non-smoking rental unit?
- How many occupants will be living in the unit?
- Do you have any pets? If so, what kind and how many?
- Would your current landlord give you a good reference?
- Our minimum income requirement is 3 times the monthly rental rate, are you able to provide proof of sufficient income?
- Are you able to commit to at least a year-long lease?
If your prospective tenant cannot or will not answer any of the questions listed above, it could be a red flag. Before allowing a tenant to view the property, make sure they meet your qualifications.
What’s Next Once a Tenant Is Pre-approved?
Once you’ve gone through all the pre-qualifications you think are necessary to consider a prospective tenant, it’s time to move on to the next step. While it may look different for every landlord, typically, the next step involves your tenant filling out a rental application. After that, there are necessary steps to take before a tenant moves in which include –
- Setting Up a Property Showing
- Rental Application Process
- Signing a Rental Agreement
- Collecting a Security Deposit and First Month’s Rent
- Tenant Moves In
- Keeping in Contact With Tenants
Setting Up a Property Showing
Once a tenant is pre-screened or pre-qualified, the landlord can set up a property showing. During this showing, the prospective renter(s) can view the property, including the exterior and all the interior rooms and bathrooms.
Usually, this process is done with the landlord or with a property manager. This is a key opportunity for landlords to convert a pre-qualified prospect into an applicant ready to apply for occupancy. When you show a property, be sure to prepare the unit and make it look its best. For example, consider sharpening the curb appeal, cleaning the property thoroughly, making necessary upgrades, and ensuring safety throughout the unit.
Also, be ready to answer questions regarding the property itself and the surrounding area so the prospects get the most out of the time spent on their tour. Remember, tenants are also signing on to a professional relationship with you as the landlord, not just the property, so impressions matter.
Rental Application Process
Once a tenant has answered the pre-approval questions and prequalified for the rental property, landlords can have them fill out an application. Many people think that pre-screening questions are the same as a rental application, but that’s not the case.
Prospective tenants will provide more detailed information about their finances, rental history, and employment information during the application process. Landlords can then learn more about the tenant and verify that they are qualified to live in the rental unit.
During this time, landlords should perform a background check, verify tenant employment, and check their references to ensure they’re a good fit for your property.
Signing a Rental Agreement
Once you’ve shown the property to a prospective tenant and are interested in living there, the next step is to meet again to go over a rental agreement. During this process, you’ll sit down with the tenant(s) and go over your expectations and specific lease clauses.
When you go over a rental agreement with a tenant, it’s crucial to make sure they understand and are willing to comply with your terms. Additionally, expect to answer any questions or concerns regarding the property and rental policies.
Collecting a Security Deposit and First Month’s Rent
Once a rental agreement is signed, the next step is collecting the security deposit and first month’s rent. Keep in mind that the amount you may charge for a security deposit varies state by state. For example, in Maryland, the most you can charge for a security deposit is two months’ rent. However, tenants may be entitled to three times the extra amount charged if a landlord violates the law.
After a tenant pays the security deposit and first month’s rent, they can start the move-in process. However, before a tenant occupies the unit, landlords should verify all funds were received and the lease is signed.
In addition, it is essential to conduct a thorough move-in inspection. This form or checklist allows tenants to document any damages or irregularities that are already present before they move in.
Once the form is filled out, tenants can move their belongings into the unit.
Keeping in Contact With Tenants
Once your tenant is fully moved into the rental unit, it’s a good idea to connect and make sure everything is going well. Moving is a stressful time and it is not uncommon for questions or issues to arise as tenants settle in. Thus, checking in shortly after move-in can help address these possible concerns early and exhibits great customer service.
Next, let’s go over how property management can help you find new tenants and manage your rental business.
How Can You Benefit from Property Management?
Running a rental business can be overwhelming, especially for landlords with multiple properties. Luckily, hiring a trusted property management company can be highly beneficial if you find yourself constantly running around from property to property.
At Bay Property Management Group, our dedicated leasing professionals follow up on leads, conduct pre-screening, show units, and facilitate the application process – all while keeping owners informed every step of the way. However, once the property is occupied, our experienced team of property managers take over to oversee rent collection, maintenance, customer service, and so much more. If you’d like to explore all that professional rental management can offer you, contact BMG today.