Rental Application Process: A Guide for Landlords

Table of Contents

Despite the fact that there are more people renting in America than ever before, finding a great tenant is no easy feat. From problematic neighbors to job hoppers, sometimes it can feel like it’s safer to have an empty property than the wrong tenant.

If you’re new to being a landlord and haven’t got a property manager, the task can seem daunting. But you’re in the right place; our rental application process guide will walk you through every step from pre-screening to approval.

What Is Tenant Screening?

Tenant screening is a series of steps to qualify renters. It means as a landlord, you don’t have to rely on first impressions, as we all know how wrong they can be. Screening gets rid of many worries like dishonesty, giving you a fuller picture of your prospective tenant; allowing you to make an informed decision as to whether you’d like to rent to them or not. Though there’s no way to take all of the risks out of renting, a properly screened tenant is less likely to cause issues for you and your property later on.

Before you start your screening process, it’s essential you know what you can and cannot legally do as a landlord during this process. The Landlord and Tenants Act allows for screening when finding suitable renters, as well as permitting you to charge a fee for it.

What Does the Law Say?

Your fee should not be excessive and should simply cover your costs incurred to complete the background check, credit report, and time spent. In general, charging a small fee for your rental application will also whittle down prospective tenants, as those who are actually interested in renting your property will pay the small fee, while those who know they have a problematic history may not.

As part of your screening process, you are legally allowed to check a potential tenant’s background, credit report, employment history, and more. However, it is vital that your rental application includes permission to use the personal information given to you for these purposes, as well as their authorization to run these checks in the form of a signature or written consent.

While you are within your rights to reject potential tenants, there are laws surrounding this in the form of The Fair Housing Act. This states you cannot discriminate based on:

  • Age
  • Religion
  • Race
  • Sexuality
  • Gender
  • Familial status
  • Disability
  • Source of income

This doesn’t mean you have to rent to certain tenants because of their sexuality or disability else you’ll be accused of discrimination. It means you must treat all potential tenants the same during the screening process regardless. You can reject applicants for a variety of reasons including:

  • Insufficient/unstable income
  • Inability to verify income
  • Smoking
  • Pet ownership (excluding service animals)
  • Credit score
  • Poor references
  • Relevant criminal record

For potential tenants with service animals, the only exceptions in which you would be allowed to reject based on someone having a service animal is if that animal had shown aggression towards a person, or if you live in the unit and someone in your household has an allergy. We’ll touch on the relevancy of criminal records later as this can get complicated.

Rental Application going through the rental application process


Though it’s not part of the official screening process, pre-screening can save you time later on by siphoning off candidates you don’t want as tenants.

You can use your rental listing to pre-screen. Include that you have a rental application, as well as any conditions you have for your property, for example, no smokers or no pets. This will immediately put off potential tenants who don’t want to carry out a rental application, or who know they do not fit the basic requirements for your property.

Similarly, when you’re making your first point of contact with a potential tenant, ask the right questions. Why are they moving? What’s their current living situation? When are they looking to move? Make them aware that you’ll require references from previous landlords and their employer. Check they’re comfortable with the security deposit amount. Reaffirm the basic requirements in your rental listing. If any of these answers aren’t acceptable for your property, you can drop the lead.

For those who do meet your requirements and arrange a property viewing, you can use this opportunity to look for red flags. This is why it’s helpful to meet potential tenants individually to show your property. While first impressions can certainly be wrong, you can look out for things like if they turn up late, whether they’re engaged and asking questions about the property, and if they discuss moving forward to gauge their interest in your property.

Rental Application Process

Now you’ve shown your property to potential tenants; you need to get them to complete a rental application to figure out whether you want them living in your property. Rental applications allow you to collect prospective tenants contact details, as well as:

  • Employment history
  • Income
  • Credit report
  • Criminal record
  • References

With all this information, you can treat it much like a job interview where you use the facts provided to determine the best candidate for your property.

Are Rental Applications Really Necessary?

The average tenant stays in a property for 27.5 months, so just shy of two and a half years. This is great news if you have a tenant who pays on time, looks after your property, and rarely needs assistance. But if you have a tenant who constantly causes problems for neighbors, consistently damages your property, and rarely pays on time, that’s two and a half years of constant headaches.

You want high-quality tenants, and a rental application process allows you to find the best.

What Questions Should I Ask on a Rental Application?

Everyone who is going to be living at the property or responsible for any portion of the rent (such as guarantors or parents) should complete a rental application. You can include whatever questions you feel are relevant to your property on your rental application (within reason!), but in general we’d advise including the following as a bare minimum.

Contact Information

This means their full legal name, phone number, and email address. You can also request their social security number or driver’s license number. Keep in mind, with social security numbers, there is a legal obligation on you to treat that information with care and protect it.

Current and Prior Residence(s) Information

We would suggest asking for five years of address details. This allows you to see patterns in behavior, like whether they’re long term or short term tenants. Calling their current landlord may not be helpful at all if they’re desperate to get rid of these tenants, whereas prior landlords are usually happy to give more accurate references.

Beware some tenants may use their friends, or professional services, to do fake references for them if they’ve previously had a poor relationship with their landlord. Beware overly glowing positive reviews and look out for any uncertainty in responses.

Current Employer and Employment History

Contact information of employers should be provided to validate employment history. It is also worth a quick google to ensure that any contact information given matches the information available about the company online.

In general, an employer will only be able to confirm whether or not an employee is currently employed so these references won’t work in the same way landlord references do. You can look for any gaps in employment and ask further questions to ensure it would not affect their financial viability. You can also use this information to check whether your prospective tenant is a perpetual job hopper as this may also affect their financial stability.

As well as current employer and history, it is also good practice to ask for proof of income in the form of recent pay stubs or a W2.

The Credit Report

A surprising amount of landlords don’t actually include credit reports as part of their rental application. But a credit report gives you vital information about a tenant’s history and is a great indication of how reliable they are financially. The obvious things to check for initially are any bankruptcies, collections, or evictions.

You can also use it to view total debt and monthly payments. This way you can check how much is coming in and going out monthly, then add the cost of your rental property and see if an application still looks strong financially. In general, you want to ensure rent would be no more than 30% of your tenants’ out-goings, depending on location.

Credit reports should also have information on prior addresses, so you can cross-reference this information with that on your rental application form. Additionally, the payment history section can be used to determine behaviors and patterns to check whether your potential tenants are likely to pay on time.

A 2019 study showed the average credit score was at an all-time high of 695. Only you can decide how high a score you require, but typically a good score will be reflective of how responsible and financially stable your prospective tenant is. If your tenant is in the middle ground but has great references and solid income, you can discuss specific issues and the possibility of a co-signer.

Couple completing rental application process with landlord

Background Check

As we mentioned above, you’re allowed to conduct a criminal background check as part of your rental application (and only if authorized to do so by prospective tenants). However, you’re not allowed to discriminate against potential tenants based solely on their criminal record if it is irrelevant to your property.

The legal guidance is a little convoluted here, but advises landlords when dealing with applications with a criminal record they need to consider five things; severity, recency, frequency, relevance, and legal considerations. This means to use your judgment and use it well.

Take the example of a potential tenant who had a substance abuse issue and a criminal record relating to that. That same tenant has also been in AA for several years and has shown clear steps to improvement. In this instance, it could be discriminatory to reject their application based on record alone. In another example, if a potential tenant has a recent conviction of assault on a neighbor this could be considered as a relevant reason for rejection.

All you need to do is be consistent and fair. As many as 1 in 4 Americans have a criminal record, so ruling out everyone with a criminal record isn’t just illegal, but would severely limit your rental market. For many, a chequered past may not be what it seems, and as long as there are clear signs of improvement they may be a far better tenant than one with little information available.

Rejecting Rental Applications

As we listed above, provided it’s not discriminatory, you can reject prospective renters for a number of reasons. Most often it comes down to low credit scores, late payments, or poor references. Alternatively, some landlords choose to impose other lease requirements on potential tenants instead of an outright rejection, for example, a larger security deposit, a lease co-signer, or an additional month’s rent upfront.

Should I Hire a Rental Property Manager?

If you think all that sounds like hard work – you’re right. Many landlords don’t have the time to go through an efficient rental application process with prospective clients, causing them to rush through and end up with problematic tenants down the line. Property management services can help you market your property across major channels, screen applicants to help you find the best tenants, write clear lease agreements, and more. Whether you just want help with leasing or full property management services, enquire today to see how we can help.

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Enhanced Reporting

Your portal includes a selection of extremely useful reports. Reports are available in the “Reports” section, and are distinct from the financial statements. Unlike financial statements which are static records, Reports are dynamic real-time records that will update with current data every time you view them. 

Scroll down to learn more about Reports:

Navigate to the "Reports" module in your portal:

Owner Portal Reports
  • Keep in mind, these reports are dynamic records. They will refresh to display current information every time you view them. 

Enhanced Rent Roll Report:

Enhanced Rent Roll Report
  • The Enhanced Rent Roll Report will show the rent amount, last payment date, move-in date, lease expiration date, and security deposit amount for each of your tenants. 
  • It will also show a portfolio summary with occupancy percentage, vacancy loss, and more!

Unit Comparison Report:

Unit Comparison Report
  • If you own multiple units (or buildings) with Nomadic, you’ll get access to the Unit Comparison Report. 
  • This report enables you to quickly compare financial performance between your units at a glance without toggling between individual reports. 

Income Statement Month-Over-Month:

Income Statement by Month Report
  • The Income Statement Detail – Monthly Report serves as a month-over-month record of portfolio performance. You’ll see itemized income and expense categories and can track monthly. This report will update with fresh data every time you view it. 

Financial Statements

Financial statements will be published to your portal on a monthly basis. The statements are found in your Documents library, and provide a historical record of all financial performance. The statements serve as a snapshot of financial performance over a given period, and are static documents (unlike Reports, the statements do not update/change in real-time). 

Scroll down for more info about the Financial Statements in your Documents library:

The Documents area contains monthly financial statements:

Owner Portal Documents
  • The statements in the Documents are are static documents. They are posted to the portal once a month to serve as a historical record of financial performance. 

Download a statement to see month and YTD financials:

Owner Portal Property Statement

You'll also find a month-over-month operating statement:

Month over Month Statement

Portal Communication Tool

You can use your owner portal to communicate with our team. Any messages you send through the portal will go straight to your Account Manager. When we reply, you’ll get an email notification and you’ll also see the message in your portal next time you log in. 

Here’s an overview of using the communication platform:

Click "Communications" and navigate to "Conversations":

Commincation Dashboard Screenshot
  • The communications module will contain a record of all messages that you create through the portal. 

Click the "New Message" button and send your message:

Owner Portal New Message Screenshot

Responses will show up in the conversation ticket:

Portal Conversation Response Screenshot
  • You’ll get an email notification whenever you get a response, and you’ll also see the message in your portal next time you log in. 

You can reply in-line using the comment box:

Owner Portal Comment

Each conversation will be logged in its entirety:

Portal Conversation Snapshot

Understanding the Ledger

Your portal includes a ledger with all transactions. The ledger is populated with data in real-time as transactions flow through our accounting software. Much of this information is also available in the Reports area, as well as the Statements in your Documents library, but the ledger is the most comprehensive resource for diving into the details. 

Please scroll through the sections below to get a better understanding of how to interpret the ledger. 

By default, transactions are sorted chronologically:

Owner Ledger Dates
  • The date reflected in the lefthand column is the actual transaction date, not the “bill date”. This is the date the transaction was actually processed. 

If you have multiple properties with Nomadic, you'll see the address for each transaction in the "Location" column:

Ledger Property Column
  • You can filter the ledger to look at just one property, all properties, or specific sets of properties. 
  • If you only have one property with us, you’ll just see the ledger for that property. 

The Description column displays the transaction type:

Owner Ledger Description Column
  • BILL: this is an expense transaction, such as for repair costs or management fees.
  • CHARGE: this is a transaction  billed to the tenant, most typically a rent payment. 
  • NACHA EXPORT: this is a credit we processed to your distribution account. This type of transaction is how you get paid! 

The Amount column shows the dollar value of each transaction:

Owner Ledger Amount Column
  • Positive Amounts: if an amount is positive, it reflects a transaction that is payable to you. Typically, this will be a rent payment that we collected from your tenants. On occasion, a positive number could also signify a journal entry or credit adjustment. 
  • Negative Amounts:  if an amount is negative, this is a transaction that is either payable to Nomadic or is an amount that has already been paid to you. Typically this will be for repair costs or management/leasing fees. Owner draws (net distributions into your checking/savings account) also reflect as negative amounts, since they have already been paid to you. 

The Account Balance column shows a sum of positive/negative transactions at a given point in time:

Owner Ledger Account Balance Column
  • Account Balance should always equal zero after a net distribution has been processed. When the balance is zero, this means that all expenses have been paid and you’ve received the remainder as net operating income, leaving a balance of zero (meaning: no one is due any money, as all funds have been distributed appropriately). 

Navigating the Propertyware Owner Portal

Your portal includes some extremely useful features that help you understand your property’s financial performance at a new level, with real-time transparency into every transaction.

Scroll through the snapshots below for an overview of portal navigation! If you need more help or have specific questions about using the portal, you can reach out to your Account Manager any time for a screen share. 

You can filter all info by date range or property:

PW Portal Filters

View a snapshot of income and expenses on your dashboard:

PW Owner Dashboard View

See every transaction in real-time on your ledger:

Owner Portal Ledger View

Statements and forms will be posted to your documents library:

Owner Portal Document Library

View a suite of real-time financial reports:

Portal Reports View

See a running list of all bills, and drill down for more detail:

Owner Portal Bills View

Under Bill Details, you'll find dates/descriptions/amounts and more:

Portal Bill Details

You can also communicate with your Account Manager through the portal:

Owner Portal Communication Tools

How do net distributions work?

Net distributions keep your accounting clean and simple. Each month we’ll collect rent from the tenants, deduct any repair expenses for the previous month and any management/leasing fees for the current month, and credit the remaining net operating income to your account. 

Net Distribution

You’ll receive a statement via email each time a net distribution is processed, and can view all transaction details in your Propertyware owner portal.