If you're a real estate agent representing a rental property and you're getting tons of calls from interested applicants. The obvious first step is sending prospective tenants a basic rental application form to fill out. The underlying question is—do you send them a paper application or an online rental application?
Traditionally, you send a PDF of the California Association of REALTORS® (CAR) Application to Rent/Screening Fee form. This is one of the most common California rental applications you can use. Applicants would then print and fill one out, scan it, and send it back to you. This process might be "tried and true", but does that mean it's the best way of doing it?
In comparison, an online rental application saves both time and paper, as it removes the tedious task of scanning and faxing/emailing.
Before making a final decision, we should weigh out our options. So let's take a look at the basics of each:
Paper Rental Application
The CAR rental application consist of standard information such as an applicant's social security number, driver's license number, vehicle information, residence history, employment history, and credit information are all included in this comprehensive paper tenant application.
It's always a good idea to see a sample rental application before you start screening to have a solid understanding of the information included on the form. Furthermore, it would help to make sure the application you use does not ask discriminatory questions or violate any regulations. This is particularly important when you use a California rental application because California tends to have stricter regulations compared to other states.
After collecting a basic rental application form from each applicant, collecting a screening fee to pay for screening reports is common. The maximum screening fee in California as of 2018 is $49.12, according to California Civ. Code § 1950.6.
- Comprehensive Information: The CAR tenant application has just about everything you need to know about your renter.
- CAR Approved: Because it has become the standard rental application form in California, you will get the same information from every applicant, making it easy to compare applications.
- Low Tech: A paper rental application form may be your only option to get them adequately screened for applicants who are not technically savvy or do not have internet access.
- Incomplete Applications: You finally finished emailing out all of your applications and are beginning to get some back. However, upon reviewing them, some are incomplete or have confusing information. Now you have to send it back and wait for your applicant to correct their mistake or fill out blank areas, making your job much harder.
- Poor Handwriting: Most applicants rush to apply and do not have the best handwriting. Combined, these two points can make it impossible for you to decipher the information. Best case, you may have to check back with the applicant to clarify information. At the worst, you may misread the information and make a wrong decision on an applicant.
- Time Constraints: No matter how eager a renter you may have, it will take a significant amount of time for your applicant to print, fill out, scan, and email back the completed tenant application. According to PRNewswire, only 33 percent of Americans own a scanner, which further delays the process with a trip to a copy store. In addition, printing and filing each completed application is a time-consuming task that is unnecessary while using a rental application.
- Ease of Use: Dealing with paper tenant applications is difficult at times. Illegible handwriting and no way to keep track of application create an organizational nightmare. With multiple pieces of the tenant application coming from different applicants at different times, you're in for a lot of paperwork.
Final Score for Paper Tenant Application: -1
Online Rental Applications
An alternative to a paper California rental application is an online rental application, which, as the name suggests, is completely done online. Not only does this save paper, but it is a faster way of getting your applicant's information.
However, there is no "standard" online rental application, and some may contain different pieces of information than what is found on the California Association of REALTORS® rental application. For that reason, make sure you get a sample rental application to review before you start using it.
- Faster Turnaround: Prospective renters can instantly complete each online rental application upon receiving it. This removes the printing and scanning process allowing you to get your applications back faster. In addition, most online application forms do not allow applicants to turn in an incomplete form, saving you even more time.
- Tenant Verification Included: As you may know, conducting a complete tenant verification can be a painstaking process. Finding the best resources on your own can be difficult, and it is easy to sacrifice screening quality for convenience. Thankfully, some online tenant applications include tenant verification as well. For example, RentSpree's online rental application consists of a complete tenant screening from TransUnion SmartMove. A credit report, background check, and eviction history are all included with the report, so you don't have to conduct tenant screening yourself. Best of all, tenant screening reports are instantly available to you with no extra steps required.
- No Paperwork: Leave paperwork in the 20th century. An entirely online interface is not only beneficial to the environment, but it removes all of that annoying paperwork that you have to organize and file. Every application received online is organized on its own and easy to access.
- Always Complete & Legible: Online means typing and not writing. You can always read typing so you won't spend time finding the correct information or using incorrect data for your decision. Most online rental application forms also require the critical fields of the application to be filled out before submission. This can help to expedite the process by getting you the information faster.
- Lack of regulation: If you receive online rental applications from different services, you may have a tough time comparing the two because of the different information that might be on each application. In addition, if you compare a CAR application to an online rental application, the information may be different as well. In order to avoid this problem, it is recommended that you suggest to your applicants to use the same application, whether it be online or paper.
Online Rental Application Final Score: +3
According to our foolproof pro/con scoring system, handling your applications online might be the way to go. The good news with RentSpree is that you can actually get the best of both worlds. RentSpree offers the first-ever online version of the CAR rental application. That means that applicants can step through our streamlined application process and you can get back a completed California Association of REALTORS® rental application. We've taken the online rental application and brought it to the digital age!
You can also access both an online and a paper version of RentSpree's basic rental application form. Even better is that RentSpree provides these forms to you at absolutely NO COST! So if you're looking to take the first step in the tenant screening process, you're in good hands.
What is Needed in a Standard Rental Application?
Now that we know the main differences between paper and online applications, let's break down what is typically in a rental application.
You wouldn't let a stranger borrow a high-value item you possessed, so why would you let one live in your property? Obviously, these are two different scenarios, which is why it's important to collect a standard rental application for any prospective tenant interested in your property. By having them fill out a standard rental application, you can have the pease of mind knowing they are the person they claim to be and are a good fit for your rental property.
But what information do you need on a standard rental application? Here's a handy breakdown of all the information you'll want to get from each applicant:
- Personal Information
- Residence History
- Employment History
- Verification/Other Documents
- Screening Reports
- Personal Information on a Standard Rental Application
Ensuring the applicant is the person they claim to be is an important step in finding the perfect fit for your rental property. By accessing basic information on your prospective tenant, you can cross-reference it with the tenant screening reports (which we will discuss later).
This information will provide you with the basic details you need to know who your applicant is. Name, date of birth, government-issued ID, and current address are all standard pieces of information used to know who exactly is attempting to move into your property and provide a framework for the rest of the information you will receive in the standard rental application. It is always good to keep this information on file for applicants who become tenants in case one of them turns out to be more trouble than they seemed.
1) Current and Previous Residence(s)
The last thing you want is to rent to a tenant who was a nightmare for a previous property manager. That's why you need to look into his/her residence history by contacting current and previous landlords.
The previous manager is supposed to be honest, but what you don't know won't hurt you, right? Wrong. This is why it is important to ask for a previous residence on the standard rental application form, which RentSpree does. By checking the previous residence information, you can be sure to acquire an even better picture of the prospective tenant you are looking at.
It is especially crucial to make sure you get into contact with the previous landlord in addition to the current one. While the current landlord may wax-poetic about their tenant, a previous landlord is more likely to provide extra information that may be pertinent to making a decision about this applicant.
It is common to require three years or more of previous rental history, which, most of the time, cannot be provided with just a current residence. Further, this information can be cross-referenced with...you guessed it...the tenant screening reports! But before we get to those (and trust me, we are almost there), there are a couple more sections to go over in the standard rental application.
2) Current and Previous Employer(s)
There are many reasons why someone would change their job. Maybe they had an injury, were laid off, or found a better position at a new company. Whatever the reason, it is up to you to verify their employment and income. By providing current and previous employer information, applicants give you peace of mind knowing they have a stable job with steady income. This will also help you determine an accurate income-to-rent ratio, which is widely accepted as a three-to-one ratio.
You can then take things a step further and verify that the information provided is true and accurate with any current or previous employers. With a landlord, you're interested in finding out how good or bad of a tenant this person is. With employment information, you're given insight into how much someone makes and whether or not they can hold a job for prolonged periods of time.
You may not realize it, but an applicant who frequently changes positions may translate into a poor tenant. A tenant who is constantly changing jobs may not always have a steady income, which means you may be missing rent checks while the tenant searches for a new job. Or they have no issue with breaking the lease to relocate for a new position. Whatever the reason, you're going to want to find a tenant who has a steady (and verifiable) income and no issue providing the information to you.
3) Extra documentation and verification
Like any good detective, you need to corroborate all of the information you've received. How else can you be sure that your applicant, who has no rental history, can afford the rent for your property? By verifying the information they provided, of course!
Anyone can say they work for Joe Schmo and make millions a year, but not everyone can prove it. Asking for supplemental documentation, such as tax returns, W-2/1099's, and bank statements, helps to provide you with the clearest picture of your prospective tenant.
This is all common information to ask for, and you can even take it a step further by contacting the current and previous employers and landlords. While most require written permission to disclose any information, most references will be more than willing to provide as much information as possible to help you feel secure about the person(s) moving into your property. By contacting the employers and landlords, you can collect official confirmation that the information provided is true and accurate. More often than not, you will learn something about the prospective tenant not included on the application or reports!
4) Screening Reports
Once you collect a standard rental application, it is time to collect the screening reports. Typically, this consists of a credit report and score, but you may choose to collect a criminal background check and nationwide eviction report as well. While the credit report will provide a score and breakdown of the applicant's tradelines (balances, monthly payments, limits, late payments, etc), it will not include eviction or criminal background information.
For this reason, it can be helpful to collect the other tenant background checks mentioned. The criminal background check will provide valuable information on any criminal behavior in the applicant's past, with respect to state laws and regulations. The eviction report will include any eviction data available on the applicant. Since evictions are getting costlier and more time consuming, having this data helps you make the best decision for your property. As previously mentioned, you can even cross-reference the reports with the information provided on the standard rental application.
At the end of the day, it is not only wise to collect a standard rental application that contains all of this information, but it will save you money and time in the long run. Remember, you are allowing a stranger to live in your property. Tools are available to make sure you pick the best fit, so start using them and stop worrying about whether your next tenant will be a nightmare or not!