You’re ready to move out, or move into a new place, congratulations! Here’s what to expect in your search and a few ways to best protect yourself.
General Renting Requirements
While every unit has its own specific requirements, you will usually need to meet some minimum criteria in order to rent.
You should expect to need a FICO score of 550 or higher. Check your credit before you start looking to make sure your report is accurate. People with FICO scores of 650 or higher have better chances at approval. If your score is too low, you may be able to get approved with a co-signer.
You should not have had any evictions, foreclosures, or bankruptcies within the last 7 years. There are “second chance” housing units that are much more forgiving with rental histories. If you have been evicted or foreclosed on in the past, it is best to be up front with it. Sometimes negotiating a larger security deposit is enough to work around poor rental history.
Financially, you should have income of 3x to 4x the rent. If there is more than 1 person applying for the lease, you’ll need pay stubs from each person. The total monthly income from every person who applies is what counts. You will also want to have the first month’s rent along with a security deposit ready. These deposits, and the first month’s rent, should be paid with “certified funds”. Certified funds are things like bank checks, money orders, wire transfers, or electronic check payments. These types of payments can’t “bounce” like a check, or be disputed in the way that a credit card or PayPal payment can.
Applying for a Lease: Things You’ll Need
1. Photo ID – Most commonly accepted forms of ID include: driver’s license, military ID, non-driving ID, passport, or green card.
2. Pay stubs – usually for 4-8 weeks, sometimes longer.
3. References – can be personal or professional. Your boss is a great reference, your previous landlord if possible too.
4. Application fee – typically $25-75 per person. This covers the cost of a credit check and rental history check.
5. Move-in funds. This is a blanket term for your first months rent plus any security deposits, pet deposits, cleaning deposits etc. This payment is generally required to be in “Secured Funds” meaning a bank check or money order. No personal checks here! Once you’ve moved in, you can use personal checks for the other monthly rent payments. This prevents a landlord from giving keys to someone who’s check doesn’t clear.
Be sure to ask how many people have applied. Ask the landlord what their criteria is. Some landlords will take the first qualified applicant, others will look at multiple and pick their favorite. Don’t waste your application fees on places that you aren’t likely to get approved for.
Deposits and Fees to Expect
- Security Deposit. A security deposit is an amount of money that the landlord will hold for the whole time that you are occupying the property. At the end of your lease, the owner/landlord can use money from the security deposit to repair any damage that might have occurred while you were living there. Most states require landlords to return the remaining deposit within 30 days after you’ve moved out. Commonly, security deposit is equal to one month’s rent, but it can be as high as 3x in some situations.
- Pet Deposit. If you own any pets, the landlord can keep additional money to cover any damage caused by the pets. This is generally refundable after you move out.
- Pet Fee. Similar to a pet deposit, but not refundable
- Key Fee. Usually $100 or so. This covers the re-keying of all locks in the property. This ensures that no past tenant has access. Not refundable
- Cleaning Fee. Sometimes a cleaning fee gets paid directly to a cleaning company to make sure the property is sparkling when you move in. I have to imagine that most of the time, it just goes into the landlord’s wallet.
- Pet Rent. This is most commonly seen with apartment complexes. They will often add to your rent based on your pets. $25 per pet per month is not unusual.
Everything is negotiable! If you feel the fees or deposits are too high you can ask for different terms. Now, the landlord doesn’t have to accept them, but it’s a two-way street. You can offer an earlier move-in date. You can offer a longer lease term, and you can even bargain with things like mowing the grass or shoveling snow.
Three Types of Rental Properties
Owner Managed
Owner managed properties are the most informal type. These listings are most commonly found on Craigslist, Facebook Marketplace, local newspapers, or just through word of mouth. These listings are great because you can often speak with the owner in person. If you have lots of pets, poor rental history, or a low credit score, you will find the most wiggle room here. Some of these are grey-market listings where rent isn’t being declared as income, or where the owner might not let their mortgage company know about the lease.
Leases for these types of rentals can vary wildly! Some landlords will use lease templates from around the internet. Some might choose to write their own. Remember, just because it’s in the lease doesn’t mean it’s legally enforceable. You should have clear definitions of when the rent payments are due, what late fees if any get charged, and clear instructions on any security deposits.
Make sure the person you are speaking with is the owner of the home/apartment. One of the newer scams is centered around homes for rent. Scammers will get the keys to a vacant home or apartment. Sometimes they do this by legal means but then make a copy. Other times they steal the keys out of a lock box. The scammers will show you around the house, have you fill out an application, and take your application fee. Be aware of anyone asking you to pay the application fee in cash, or in a money order with a receipt.
Managed Properties
Individual property owners will often rent out through property managers. This means that instead of a Craigslist post where they personally have to field phone calls etc. They instead pay a company to manage the property for them. This usually means the property will be listed for rent on the MLS, a collection of local databases for real estate agents. In order to view these rentals you will usually need to be accompanied by a real estate agent. Don’t worrry, you don’t have to pay them! Real estate agents get their commissions paid by the landlords once you’ve moved in.
Each MLS will cover several cities, up to entire counties. The local Realtor association will provide standardized rental applications and leases for all the entire area. If you decide to apply for a lease on that property you’ll bring the application to the property manager. This person will be the contact going forward for anything having to do with the home: the lease signing, security deposit, monthly rent, maintenance, all of it.
You as a renter get the benefits of a direct line to maintenance, more recourse for lease disputes, and often conveniences like online rent payment or included renters insurance.
They as the owner get the benefit of broad exposure on the MLS, and generally are able to collect a higher rent than they would if they used Craigslist or facebook marketplace.
Apartment complexes
Most larger apartment complexes will have a central leasing office. These offices will generally have the property manager on site to collect applications, collect rent, and handle maintenance requests. Most of these companies will have their own application documents and their own lease agreements. These types of properties are easily found on Apartments.com, Zillow, Rent.com, Trulia etc.
As a renter, you will often have more amenities in these complexes. To attract tenants, complexes can have pools, fitness centers, basketball courts, tennis courts and more. The flip side is that the rent for a similar sized unit will often be higher. You will also be subjected to more fees, and often very strict enforcement of lease terms.
Rental Application
Regardless of the property type, you should be ready to answer similar questions on your application. Expect to list out your past addresses for 3-4 years prior along with employment history. You’ll probably be asked about what cars will be at the address, what pets if any, and other family members. Expect everyone aged 18 or older to fill out the application as they will be on the lease.
If you have ever been evicted, foreclosed on, or filed bankruptcy you should take the time to explain the situation on your application. This information will come up in your credit and rental history check, so it’s best to be out in front of it. Eviction isn’t always an automatic disqualification, but you might be required to pay a much larger security deposit.
Let’s talk about pets
It is legal to charge higher rent from people who have pets. It is legal to restrict the number of pets, as well as the species, sizes, breeds etc. Often times condos or homes with an HOA will have their own pet restrictions.
Service animals are not pets. There are lots of murky waters around these situations from both sides. Landlords can request proof that your animal is in fact a service animal. You can probably pay someone on the internet to lie for your and make a certification as a service animal. Remember that at the end of the day, you and the landlord are people and transparency and honesty will go a long way. Landlords can make your life a living hell if they want to.
Once you move in
After you application is accepted, you and the landlord will have to meet up and sign the lease documents. At this time, you will give them the move in funds also. In exchange, you will get the keys as well as any garage door openers, mailbox keys, etc. If possible, it’s best to do a walkthrough with the landlord. This gives the opportunity for you to point out any issues with the space. The hope is that any non-cosmetic issues can be fixed early. Also, you have the chance to point out any pre-existing damage that might come back to bite you when you move out.
The most common type of dispute between a landlord and a tenant is the return of the security deposit. You can avoid many these disputes by properly assessing the unit when you move in. Many landlords will provide a “Property Condition Report” for the tenant to fill out. Generally you will have three days from the start of the lease to fill out and submit this form. It is extremely important to turn in the form on time, and to keep a copy for your own records.
You will also want to photograph any possible issues immediately upon moving in. Once you’ve taken these photos, email them as soon as possible to your landlord. Photos that are submitted when you move out of the unit have little to no impact on your security deposit, even if you took them the day you moved in. Time stamps on photos can be edited, and you also haven’t given the landlord the chance to fix any of the issues. The latest you should wait to submit this evidence is three days after moving in. Earlier is always better!
“Tacit agreement” means that you don’t need to get confirmation from the landlord that they received the photos. Unless they dispute the evidence now, they are assumed to have agreed with your information!