Finding the perfect rental can be an intimidating process, however, having some key information ready and available for potential landlords or property managers can make the process flow more smoothly. Each landlord or property manager may have slightly different requirements for renting, below are some guidelines to help ensure that you are positioned for success.
Reviewing your credit history gives potential landlords a glimpse at any possible red flags when it comes to your financial stability. Some of the figures that will stand out are:
- Late payments
- Accounts in collections
- Hard inquiries
- High debt payments compared to stated income
- Low credit score
- Payment gaps
If you’re new to the country or do not have credit history available there are several options to explore.
Look for rental units that do not require credit checks, use caution when exploring this option as sometimes the quality of the rental unit may not be what you expect
Rent from a private landlord versus a property management company, this will allow you to discuss the state of your financial situation and ability to pay at a more candid level
Find a guarantor. A guarantor should be a family member or friend over 21 with good credit. The guarantor will sign your lease with you and agree to be responsible for your rent if you should fall behind.
Cosign with roommates. With roommates, you will all sign the lease agreement and share the responsibility for rent. The key is to ensure that you are selecting financially stable roommates.
Provide letters of recommendation. A letter of recommendation can come from an employer who can confirm that you are continually employed, or a previous landlord who will confirm that you responsibly rented from them for a period of time and paid rent on time.
When it comes to your rental application, your credit history is only one component that will be considered.
Having a strong credit score can demonstrate to a landlord that you have been generally responsible with your finances. It shows that you have regularly made payments on time, and maintain a manageable debt to income ratio. Many landlords will look for a credit score over 600, but this number will vary depending on the landlord.
Renters will also be required to successfully pass a background check. This can include landlords or property managers contacting your previous landlords or property managers, criminal record check, confirmation of employment, and any other references you are asked to provide.
If you have been evicted from a previous residence, be prepared to provide details surrounding the circumstances of the eviction. Having been previously evicted does not automatically disqualify you from being considered for a future tenancy. For example, if the eviction was for something beyond your control, such as a landlord moving into the property, it would not have negative implications.
Landlords and property managers like to know that their renters have consistent employment. This demonstrates stability and assures that you are able to pay rent on time. If your employment history has unexplained gaps, it can be seen as a red flag to potential landlords or property managers.
What Can You Afford?
It's easy to fall in love with a rental property that is more than you can afford. When you are figuring out how much rent you can afford to pay you need to have a clear picture of your monthly income and expenses. A common guideline is that your rent should not be more than 30% of your monthly income. Following this guideline can ensure you to live comfortably and have something to put aside in savings. It also makes it less stressful to accommodate future, unexpected expenses.
The Rental Process
- Have your REALTOR® set up Auto Search on MLS with your desired criteria
- Drive by properties you were sent to confirm the area fits your needs
- Narrow down search to top 3 favorites then requests showings
- Verify the application process with your agent; will it be online, in person what is the fee?
- View the rental property
- Love it? Complete the “Contract for Lease”. This is an “Offer to Lease”, once accepted, you can move forward.
- Pay a good faith deposit (which holds property)
- Rent it