When you apply to rent a property, the landlord is going to do a review of your finances, credit, and other factors to determine if you meet their criteria for living in their property. The qualifications that landlords prefer in a tenant may vary, depending on the property being rented and the terms of the lease. For example, most large, professionally managed properties have specific rules and well-designed processes that help them accept or reject tenants, whereas smaller, individually owned properties may have a more informal process for taking tenants. But most landlords, whether they're part of a big company or are a small mom and pop setup, will review similar things when considering new tenants. The major qualification issues are noted below.
Income and Wages. The first thing a landlord will want to determine is whether or not you have enough income to pay the rent, as well as if you have a consistent work history. For example, if the rent on the unit you would like is $2,000 per month and your gross income is $2,000 per month, a landlord is probably going to reject you as a tenant because along with all the other bills you may have, like electricity, cable, phone, car payments, and food, it is unlikely that you would be able to pay the rent each month. Most landlords would prefer your rent be about 33.33% of your gross income, but that may go up to 50% or more, depending on many factors.
Consistent Income. If you have held the same job for a year or more, that gives an owner confidence that your income stream will continue, allowing you to continue paying the bills. However, other factors could mitigate a shorter job history, like a fair amount of savings or a parent guarantee, but consistent income is your best bet.
Credit Score and Debt Picture. A landlord will also look at your credit score and your debt picture. This is because if you have a history of always paying your bills on time, your landlord will feel more confident that you will pay the rent on time as well. The landlord will also look at your debt picture, like how much your minimum monthly payments are for your car, credit cards, and school loans because paying these reduces the amount of money you will have to pay rent. The lower your monthly debt payments, the better credit risk you are to a landlord. You can get a free copy of your credit report, though not a credit score, from AnnualCreditReport.com – which was set up by the credit reporting agencies due to the federal government requiring these companies to provide the information for free, once every 12 months, to consumers like you.
Past Rental History. The owner will also want to call references regarding your past rental history and behavior. If your prior landlord provides a good reference, like vouching for the fact that you always paid on time, took good care of the property, and left on good terms, any new potential landlord will heavily court you for their property. Landlords also love tenants who stay for multiple years, so that will also help increase your chances of securing a place to live.
Use of Property. The landlord will most likely also want to confirm that the primary use of the property is for residential living. For insurance reasons, landlords generally do not want renters who run a business that stores goods/inventory at the rental unit or has clients come to the property. Most do not want child care done at the property either. There are other behaviors that many leases restrict, like working on cars and keeping inoperable cars, RVs, or boats in the driveway, or any type of behavior that causes significant noise or disturbance to the neighbors. Even if they don’t ask, you should discuss any potential issues with a prospective landlord before you sign a lease.
Evictions, Bankruptcies, and Foreclosures. Lastly, landlords will want to know about a prospective tenant’s other past behaviors, like evictions, bankruptcies, or foreclosures. Sometimes, it may not be a significant issue with certain landlords if you explain the circumstances, but you should have a good reason for why you failed to pay your bills, or some other mitigating factor that would ease their concern.
As a personal note, I suggest that you never get evicted from a property. You should almost always be able to work out a fair resolution with your landlord if you cannot pay the rent. The top way to do this is to act responsibly and keep the landlord informed, give the landlord a firm date about when you will be out of the property, assist them in re-renting and unit, and leave it in good condition. After all, because of the effort required, money it costs, and hassles it involves, few landlords are going to spend the time to pursue a legal action against you if you handle the situation professionally. Evictions follow people for years, so if you get in financial trouble, mitigate the financial damages for the owner so you don’t get that awful credit mark on your credit report.
Those are the majority of items a landlord would review in looking at your application. If you are deficient in any of those areas, work on them as needed to increase your chances of finding a great place to live the next time you are renting an apartment or house.
Note: In general, all landlords must comply with the U.S. Federal Fair Housing Act. Craigslist.org has a great guide on this for your review: Fair Housing Is Everyone’s Right!
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