However, it is important to keep in mind that pre-approval is not a guarantee of financing, as final approval for a mortgage loan is based on an appraisal of the property and a review of your financial situation at the time of the loan application.

It differs with every jurisdiction and I wouldn't want to give you advice on what may not be applicable to where you live.

It's these people that are prone to being scammed cause they hear a million nos but then someone says "sure, let me send you an application" and they fall for it.

What do you all recommend if you have multiple applicants that meet the rental qualifications?

If your expectations aren't out of whack vis-a-vis an investment with a similar risk profile and opportunity cost, then he might understand where you're coming from.

Then only sign/initial the parts of the contract that are applicable to what you want to offer.

Some may want an application fee.

Our applicant looked too good to be true, we now see that as a red flag.

Property management is going to the same model with a % of rent as the management fee, then additional charges for new leases, renewals, inspections, work outside the scope of management, application fees, add/remove tenant, add pet, etc. 

@Neil Copeland"hopefully you are already running you active business via S -Corp to save on self employment taxes" advice may or may not be applicable in your case.