17 Aug Your Rental Application Needs To Be Perfect
Renting a house or apartment is no easy task. Many people think they can go see a few places and have the pick of the litter. Unfortunately this is not the case. Today I will give you the real life no BS version of what you need to know if you are thinking of putting in an application to rent a house or a condo.
What are the things landlords care most about in your rental application?
- Your Income: Can you afford it?
- Your Credit: Can you afford it and have you been responsible in the past?
- How Many People & How Are They Related: A family or 4 dysfunctional roommates?
Landlords want to see that you can comfortably afford rent:
You will need to be able to show an income. The rent of the property in question should be no more than 50% of your gross income. I say 50% because everything is getting more expensive. Life is tough. I get it. A McDonalds burger is $8 these days. Unfortunately this 50% is already pushing it. It should really be at the 35%-40%.
If you are a student, you need a co-signer. A good co-signer is usually a parent. Whoever co-signs will also have to show proper documentation (credit and employment letter) so don’t think that you just need someone to blindly ink their name on the lease. Can’t get a co-signer?
If you are self employed or do some type of cash work on the side (shhhh I won’t tell) it is going to be very tough to convince the landlord you are actually making what you claim to be making. If your taxes look great then you have no issues. If not, you may need a co-signer or have to show extra documentation.
Whatever your situation you need to remember that the landlord is allowing a tenant to live in their 300k, 500k, 1 Million (whatever it may be) investment. It is very hard to kick someone out and the costs of coming after someone for back rent or damages is not worth the time. Landlords don’t want someone who can just barely afford rent for 3 reasons:
- They want to get paid on time no matter what. Someone who can just barely afford rent will default on their rent if their car breaks down or their pet gets sick etc.
- Someone who can comfortably afford rent will not keep calling the landlord for small annoying expenses (lightbulbs, batteries etc). Someone who can barely afford rent will think “the toilet is plugged, let me call the landlord.” Someone who is comfortable will think “I really shouldn’t have flushed X down the toilet. I should call a plumber”
- People with higher incomes are deemed to be more responsible
Remember this is a real life guide. I don’t mean to offend anyone. I just want to add value and give you some insight as to why you might be getting rejected when applying to rent a house or a condo or why you might be losing out to other tenants. You might be much more responsible than that person making 100k, but the landlord only sees numbers on a piece of paper. It is a fair assumption to make that someone who is making 100k has worked hard to get to that point and must be somewhat responsible.
Your credit report is the only piece of information that shows the real you. You cannot lie or manipulate the data.
Nobody can hide from their credit report. It gives the landlord all the information they need to gauge if you are financially responsible. It also takes time and work to remove something from your past, making it even harder to hide the real you. Here is what landlords are looking at on your credit report:
- Do you make your payments on time? The report shows how many times you’ve made a late payment.
- Are you way over your head in debt? Have student loans? Car loans? Credit card debt? If your income is great but you owe a ton to other entities, it might be a deal breaker.
- How are you utilizing your credit? Are your credit cards maxed out? Don’t use over 30% of your available credit on your credit cards (this will also improve your credit score).
- Do you have collection accounts/bad debt. If you didn’t pay that credit card or rogers wireless bill off years ago, it is most likely going to haunt you until it falls off your record (usually 6 years).
- Are you responsible? If you are looking to rent a $1000 basement apartment, make 45k a year but have a 40k BMW car loan, it doesn’t look like you’re too responsible. Again, the landlord only gets to see what is on paper. You might be a car enthusiast that worked your a$$ off in high school to afford most of the car. The sad thing is the market does not care. You will be perceived as valuing flashy items over things that matter (saving, buying a house, a starter car etc).
The less people the better. Less traffic, less noise, less problems.
When it comes to the number of people who are going to reside in the property, less is always better. The reason is quite simple as you can tell from the title. No kids means less damage to the property and less noise. Some basement apartments are technically “illegal” and landlords could get in trouble by the city. You don’t want too many people coming in and out of the property so that nosy neighbours start calling the city.
Landlords also prefer families over roommates or groups of people (family with 3 kids as well as the husband’s sister or something of that nature). Families come and go together. “Groups of people” and roommates will part ways eventually. It is a certainty that life will take them in a different direction at different times. If whoever is left cannot afford the rent because someone left, then the landlord is in trouble. I would say it is almost impossible to get your application approved with roommates outside of school/university zones.
Finally the best piece of advice I can give you is this: Your story should make sense.
I’m going to say this one last time. The only thing the landlord gets to see is numbers on a piece of paper. If your application isn’t perfect, take the necessary steps to alter or fix it. Make sure that when the landlord goes through your papers, there is a pattern, that what you said is true, and that if there is a problem you have taken the initiative to fix or explain it.
Example of what you do not want to submit:
Spin your story into:
Student entering X year at X school in September
Attach school acceptance letter
No Income but worked during the summer at X. Parents are co-signing
Attach parent’s employment letter
Attach parent’s credit report
Attach your bank or parent’s bank statement.
Landlords are people too. They will judge and make assumptions: student means poor, roommates means parties, young means irresponsible, pets means damaged house, certain cultures means smelly cooking. I hate to bring in Jesus into this but he who has never sinned cast the first stone? We all stereotype and usually there is a reason behind it. You can bet your behind you would be picky as hell if you were renting out your first rental property. You can either get pissed off at whoever rejected your rental application, or you can self evaluate, edit and get the next one that comes along.
Some helpful links:
What is your credit score and why is it important
Check your credit score at Equifax
How to fix your credit
Norman Hill Realty Inc
20 Cachet Woods Court #2