Landlords and apartment management companies decline applications for a variety of reasons. In today’s market, it’s important to secure tenants who don’t present much risk. It can be extremely costly to owners if residents must be evicted or simply break their lease. Not only will they not be collecting rent during this period, it is time consuming to go through the entire process of using the courts to evict. Here are some of the main reasons to reject applications.
Money is owed to another apartment community
If a resident left their last rental with damage that was not covered by the security deposit, or they simply didn’t pay the full amount owed, this can be classified as a judgement. Management companies know that if you haven’t fulfilled your debts on a previous lease, it’s highly likely that you will not pay any outstanding debts on your next contract.
This is easy to rectify though. Once the tenant pays off the outstanding judgement, most future landlords will put you back in a category of good standing.
Bad Credit Scores
Although some communities mainly care about income earned and rental history, more and more are beginning to look into the actual credit scores. Low credit scores can be a product of credit card charge-offs, non payment of cell phone bills, as well as many other factors that impact your overall credit profile.
It is always a good idea to ask the management company if they use a credit score in their approval process. Everyone can pull their free credit report at least once a year; which can be done here.
Lack of Income
Most properties require that renters make a certain amount of money per month. This figure is typically around 3.5 X the monthly rent. So if your rent is $4,000 per month, you will need to make approximately $14,000 per month. This figure can vary from one community to the next. Rent in major cities like Boston has continued to increase and is taking up a bigger and bigger portion of rent. Meanwhile apartments in cities like Dallas remain extremely affordable.
Broken Leases and Evictions
The two factors mentioned above regarding your credit report will prevent you from renting the majority of apartments. The broken lease means that the resident left the lease early without fulfilling the terms of the lease. When a resident leaves in the middle of the night, this forces the apartment owners and landlords to recondition the home and put it back on the market. This expense is not cheap. The eviction is probably one of the worst scenarios. The residents stops paying rent and won’t leave the home. The owner is forced to go to court and begin the eviction process. It’s a good idea to avoid renters with either one of these on their credit reports.
The Applicant is perhaps not telling the whole story
Seasoned professionals have ways of finding out when tenants aren’t telling the truth. Tenants may try and use a different social security number or identification which is not theirs. It’s a sign they are hiding something. This sort of applicant should be denied immediately. Renters also like to try and hide pets.
Remember it’s far better to let the rental sit vacant a little while longer, than take a risk on an applicant who has poor credit, lack of income, or isn’t being truthful with you.