How to choose between two applicants

As a landlord, having too many prospective tenants interested in your property is a good problem—especially if they are highly-qualified. But having multiple great candidates can also make it harder to choose the right one. 

So how do you decide which applicant to approve and which ones to deny? To help you, we’ve outlined all the steps you need to take so you can make an informed and confident choice. 

Why landlords need a comprehensive rental application process before listing their property

A comprehensive application enables you to vet applicants because it offers insights into a tenant’s financial stability, rental history, and their ability to meet rental obligations. With a clear understanding of an applicant’s payment track record and past rental behavior, you can guarantee you’re renting to someone who pays on time and minimizes property damage risk. 

Conducting a thorough rental application process also ensures that you’re complying with Fair Housing laws and treating all applicants fairly. When comparing applicants, it’s important to have all the information about a prospective tenant in front of you so you can be confident you’re choosing the most qualified tenant.

How to set a clear criteria for screening tenants 

The decision-making process demands more than just a thorough application process. It requires well-defined criteria to ensure the tenant you choose is the best fit for your rental property. Here’s a few guidelines for setting criteria.

Require a specific credit score

Asking for a minimum credit score and running a credit report can help mitigate the risk of potential payment issues or defaults. An applicant with poor repayment history, overdue accounts, or excessive debt may not be the financially responsible tenant you’re looking for. 

Check references

Regardless of how qualified a tenant seems on paper, reach out to the references they provided to validate the applicant's reliability. References from previous landlords or property managers offer a glimpse into the prospective tenant's responsibility in maintaining a property and adhering to lease agreements. When reaching out to an applicant’s references, consider asking these questions:

• How long did the tenant live at the property?
• Why did the tenant decide to move?
• Did the tenant pay on time every month?
• Did the tenant respect the property?
• Would you consider renting to this tenant again? 
• Does the tenant have a history of smoking?
• Does the tenant own a pet?
• How would you describe the applicant’s character?

Contact their employers

Verifying employment details provides insight into an applicant's job stability, income consistency, and ability to meet financial obligations, including rent payments. Contacting their employers not only confirms the information on their rental application is authentic, but also allows you to ask about their income level and job tenure. This way you can rest assured that they will be able to afford rent and fulfill lease obligations, ensuring a higher likelihood of a successful and trouble-free tenancy.

Set an income requirement

As a landlord you want to make sure your tenants pay on time every month and setting clear income requirements helps assess an applicant's financial capacity to consistently pay rent on time, every time. 

Include your criteria in your listing

Once you narrow down the specific requirements you expect from potential tenants, communicate your expectation in the rental listing and application form. Transparency ensures that applicants are aware of your requirements from the outset and can prevent future misunderstandings. 

What to look for in an application

When you review rental applications, knowing the signs to look out for—both good and bad—can help you fine tune your tenant selection. 

Red flag: Unverifiable or false information on the application

Fabricated details regarding income, employment status, rental history, or personal information is a good reason to question an applicant's credibility and suggests they may not be a reliable tenant.

Green light: Open and honest communication and someone willing to answer any questions regarding the application.

Red flag: Insufficient income 

When you review an application, make sure the tenant earns at least 2.5 to 3 times the monthly rent. When an applicant's income falls short of these benchmarks, require a cosigner to act as a guarantor for the lease agreement, ensuring financial responsibility in case of default or missed payments.

Green light: Income that can cover the rent and someone with responsible financial habits. 

Red flag: History of late payments or evictions

Consistent late payments or a prior eviction increases the likelihood of future payment issues or property damage. Whether they missed rent payments, abused a rental, or were evicted for a different reason, don’t rent to someone who can’t follow property rules. 

Green light: On-time rent payments and a history of responsible property care.

Red flag: Criminal background

An application that lists criminal activity is a sign to proceed with caution. Since local and state regulations can vary significantly, landlords should assess each situation carefully, considering the nature, severity, and recency of the offense, and how it might impact the rental property or community. Depending on the circumstance, landlords can deny housing to individuals with certain criminal convictions that pose a direct threat to the safety and well-being of other tenants or property, as long as these decisions are made without discriminatory intent. However, other criminal activity such as drug usage for example, are not legal grounds for turning down an applicant. 

Green light: When an applicant includes a letter with their application that explains the situation. 

Red flag: Low credit score

A prospective tenant who has a credit score below 650 may have a history of financial struggles and potential difficulties meeting payment obligations. A low credit score may also be the result of someone who has been a victim of fraud or doesn't have a history of credit in the U.S. Before you make any assumptions, consider requesting additional information from the tenant or giving the tenant an opportunity to provide an explanation.  

Green light: A credit score within your expected range and a responsible credit history.

Selecting the final candidate

If you find yourself with multiple qualified applicants to choose from, there are several things you can do to make your final decision. The simplest thing you could do is use a first-come, first-serve approach. If that’s not a determining factor, conduct an additional evaluation of each applicant by conducting follow-up discussions to assess factors like their compatibility with property rules, communication skills, or their long-term rental plans. Alternatively, you may want to use factors like who has a higher income, a sooner move-in date, a longer rental history, or better references to inform your decision. 

Informing applicants if they’ve been accepted or denied

Once you make a decision about which applicant to accept or reject, it’s time to write letters to inform the applicants. In your letter to them, document the reasons behind your choice to protect yourself from the threat of discrimination lawsuits or tenant conflicts. To make sure you avoid legal trouble, familiarize yourself with the Fair Housing Laws along with local and state tenant laws. 

In your letter to the applicant, include a brief description of how you came to a decision based on your predetermined criteria. For example, if a tenant failed to complete an application or has a lower credit score than your expectations, let them know that’s the reason you rejected them. Likewise, when you accept a tenant, briefly explain why you chose them. 

Streamlining the tenant selection process

A comprehensive rental application is the key to finding the perfect tenant for your property, especially when you have to choose between two or more qualified applicants. Screening tenants thoroughly will save you money, time, and stress in the long-run. 

RentSpree’s Rental Application helps you evaluate applicants and ensure you get all the information you need to help you make a well-informed decision about which tenants to accept and which to deny. 

With RentSpree's Rental Application, landlords can effectively and efficiently select tenants who best fit their rental property's requirements, increasing the likelihood of a successful tenancy.

Ready to learn more? Contact us today.