How many applications to give/accept at one time?

Question

New to renting / landlording. We are renting out my fiance's house and after only 36 hours of having the listing posted, we've had 16 inquiries thus far with several folks stating how very interested they are.

Having followed several guidelines, etc. they all were provided with the forms:

1. Application Process & Qualification Standards

2. Potential Tenant Questionnaire

However, it has occurred to me that we will have multiple parties that meet the qualification standards at one time. Given this, how are we to proceed?

1. Give all that meet #1 and #2 above a application? If so, how in the world do we justify charging a application fee (most likely $35 ... to cover Background and Credit checks) if we are only going to choose one?

2. What if we have multiple applicants who have No evictions, credit above 600, long job history, make well over 3x the monthly rent, No felonies, etc.? In other words, if we choose the one we like the best based on all the information obtained ... how do we tell the other 3 or 4 or 5 applicants that although they met and possibly exceeded all the requirements, we chose someone else?

Or, is this normal and typical?

Should I only ask one applicant at a time (or 2 at most) to apply and do background and credit checks?

Just a bit confused as to how to deal with multiple applicants who may meet all our requirements and how to legally choose one and deny the others.

I live in Indiana and don't see anything specific in IN Fair Housing laws.

Thanks for any help!

Brian

Jeff Copeland · Answer

Great article about this here: https://www.landlordology.com/order-of-applicants/

If you decide to go for the "best qualified" approach with several applicants/fees, be sure to document your decision carefully and avoid even the appearance of it being based on a protected class.

Brian Christoff · Answer

Thanks for all the suggestions and help on this subject. I appreciate it.

Deanna -- Yes, there are a handful of homes in the same area and they are either the same rent per month or a little less. I've even had folks offer to pay an extra security deposit and an additional $50/month if we'd change our minds about allowing a pet(s).

Also, we are going to use Zillow's online application and background/credit checking option for all applicants which are comfortable using online vs. paper. If paper, then they can give me the cash to move forward with the checks.

Jennifer L -- the first questionnaire is no different than me asking those questions in an email or phone call. But, I simply am not interested in this stage of the process with so many folks inquiring about the property to do personal interviews. If those interested parties aren't willing or wanting to fill out a 2 minute questionnaire prior to the actual application, then they aren't all that interested.

Again, many thanks! On to the next step of having the folks qualified to run by and see the property in person from the outside.

Jennifer L. · Answer

@Brian Christoff I'm not sure that potential tenants will want to fill out a questionnaire and then fill out an application. You can automate this process by referring potential tenants to apply through Cozy.co. Cozy will also run credit/background checks which the potential tenants pay themselves. What I did was direct tenants not to pay for the screening until I have had a chance to review their application and they have decided they wanted to move forward with renting. I ended up with 3 applicants, and I accepted the first qualified one. I knew which one was first because it was date and time stamped.

Obviously, if your tenant pool is not tech-savvy, this won't be the best approach. But if they are, you can then offer them the ability to automatic payments for free through Cozy. This will save you the hassle of having to deposit checks and them the hassle of writing them.

Finally, if you do deny someone for poor credit, you have to tell them in writing the reason you have denied them. Otherwise, you don't have to give an explanation. But usually a simple "an earlier qualified applicant has signed a lease" will do.

Robert Martin · Answer

If you are renting in your area you can also do a druve by and see how they keep the outside of their home if it's a single family home. Sometimes you can weed out some problems that way.

David Warren · Answer

@BrianChristoff Found this the other day and it kind fits for you. I'm sure you are further along than proceeding step by step but the BP fellas put together a cool infographic. (picture is worth a thousand words) https://www.biggerpockets.com/renewsblog/2013/01/2...

Edward Rhoads · Answer

Yeah my pet peeve is people who set a time to see the house then never show. Get that about half the time.

Allison Cole · Answer

@Brian Christoff,

First I don't know Indiana state laws, but I do work with a property management company in Alabama. What we do is make sure that all applicants are aware that multiple applications have been turned in and that we run on a first come first serve basis. This process helps eliminate any questions of discrimination or bias. (i.e. applicant 1 meets your qualifications applicant 1 gets first priority, if applicant 1 does not meet them then the next person who turned in the application that does will get priority)

Hope this helps,

Allison

Brian Christoff · Answer

Good Point Jeff. I'm considering just setting up a 1 hr block of time and tell those handful that are qualified and still interested after going by to see the property form the outside on their own.

Jeff B. · Answer

which is why I don't show without the completed application.

Russ M. · Answer

And remember, that just because someone comes to look at a unit and takes an app, they do not all complete and return the application.

How many applications to give/accept at one time?

How many applications to give/accept at one time?

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