Failed pre-screening, do I notify of rejection?

Question

When I advertise a unit for rent, I'll get an e-mail response, and send out a 10 question pre-qualifying e-mail.

I have a potential tenant that listed their income as "1250 not including tips". The rent is 790, so the income is not enough.

I also ask how many people will be living in the unit because I charge 850 instead of 790 if there are two people. The potential tenant said that there will be two people. The second person is a 2 year old daughter. Can this count as a second person?

If the 2 year old counts as a second tenant, that means that the rent is 850. The income is not even twice the rent. This is a fail of my pre-qualifying questions. How is this tenant going to afford anything?

Am I required to notify of this? I guess I could out of courtesy anyway.

Bill S. · Answer

@Erik Dwyer tenants are over 18 and on the lease. Occupants can be either tenants or children (under 18). Make sure your charges are related to number of occupants.

Bill S. · Answer

$1,250 income "not including tips" might be able to afford your unit. Tips are a significant portion of income for servers and bar tenders. Often the wages before tips are below minimum wage. At high end restaurants or bars people who do a good job can make a nice living. I wouldn't write them off too soon unless there are other reasons you don't want them.

Misty W. · Answer

Yes you should, and it's easy to set up email templates with this information already included so it takes 2 seconds to send out. If you use Gmail you can prepare canned responses, other mail programs have similar setups. I have all of my responses already done, even including marketing replies. I can customize it, but the main information pulls up automatically for me so I'm not typing the same thing over and over.

Nicole Holmes · Answer

@Erick Dywer Step 1. In my experience as a PM for over 10 years ( and I hate wasting time ) every landlord should set out a Auto Response that is very simple stating that the application is not approved and thankyou for your time. Its just polite and maybe when they can afford your place they might be back. I have personally put a stripper and her boyf into a house and honestly they were some of the best tenants that I managed. I would not right off this tenant - ask more questions to make a informed decision, dont run just off gut feeling. Get pay slips from them or bank account records- see if they really do put that much into the bank. If you want to ask them to prove to you via a 2 week period that they can make the money and putting it in their bank, do that. It might weed the people out quickly or not. If you can get a tenant ledger from the current landlord which shows the payments and what days they paid it that would be good too. I totally agree with Bill.S. a tenant is over the age of a child, that could be argued at 16 but I think that 18 is far more acceptable, and they do use more water as 2 people with baths etc take this a consideration. Always take the time to really get to know these people financially and IF possible drive past their current house and see what its like as that is how your house will be looked after. Hope this helps everyone.

Michael Jobe · Answer

As a courtesy and for the sake of doing good business I'd let the potential renter know that the unit may be out of their budget. Also as @Bill S. mentioned this person may actually be able to afford the monthly rent. Perhaps you could express your concern & ask for more financials? The last rental client I dealt with had to show tax return as well as recent pay stubs per the landlord's request.

Erik D. · Answer

No application has been filled out. Only the ten questions that I ask before setting up any showings. I am familiar with the Familial Status part of fair housing. But when does a kid become a tenant? I charge slightly more for an extra tenant in the unit because they use more utilities. Would a second tenant need to be 18 to be considered an additional tenant?

Kyle J. · Answer

If an applicant takes the time to fill out an application, I take the time to let them know if they were accepted or not. It's just a courtesy thing. Legally, you don't have to let them know they were denied unless the reason you denied them is based in whole, or in part, on information you obtained from their credit report. As for charging more for the applicant with a 2-year old daughter, you cannot do that. "Familial status" is one of Fair Housing's protected classes. You should read more on that to avoid getting in trouble or accused of discrimination.

Wendy BK · Answer

I think if you charged the application fee, you need to let them know your decision. You can choose either 1) a rejection letter, clearly indicating the income is the reason ( but then you have to make sure the applicant you chose in the end has a high-enough income. You need to apply the same standard to everyone. or 2) ask them to provide you more income proof in order to continue the applications. In the meanwhile, you can move on to other applicants.

Erik D. · Answer

I raise the rent a little because rent includes all utilities. Two people use more water, electric, laundry, etc. That's my theory. Thanks for the response!

Nicole A. · Answer

Why don't you just rent the place for market rent no matter if there are 1 or 2 people? You're renting the property, which is unrelated to people. I think as far as notifying, if they ask, give a standard reason...otherwise, don't bother.