Developing a Rental Policy

A good landlord/tenant relationship will either make or break your rental business. I am the owner of approximately 48 single family rentals in a small college town. I've learned the hard way how to screen tenants. I've made a lot of money but I've also lost a lot of money by not properly screening tenants.

The most important part of the tenant screening process is to develop a firm rental policy. This will show the prospective tenant right from the start what you have to offer and what you expect in return. This rental policy needs to be implemented with each and every tenant as inevitably there will be someone who will accuse you of discriminatory practices. The policies need to be in written form and distributed to all prospective tenants. Following is a list of rental policies that I use in my own personal rentals.

1. Basic Rental Terms-clearly outline the monthly rental amount, the requirement of a security deposit, the start date of the tenancy and the maximum number of occupants.

2. Disclose that you abide by all fair housing laws.

3. Disclaim that any false information provided will result in an automatic disqualification.

4. If, at any time during the tenancy, an additional occupant would like to move in, the occupant must complete the same screening as those already occupying the unit. State clearly that additional occupants will be rejected if it appears that the unit will be over-crowded.

5. Obtain a copy of each individual's driver's license or pass port. If your rental policy includes running a criminal background check or doing a credit check, you will need to obtain a social security number and date of birth. You must inform the prospective tenant that you will be conducting the checks. Make disclosure to the candidate that a history of bad credit or criminal history may result in denial of an application.

6. Past Rental References-Let the candidate know that you will require references from at least two prior landlords. Remind the candidate that not only payment history will be considered but also the condition of the rental when vacating and the circumstances under which the tenancy was terminated.

7. Implement a pet policy. It has been my experience that pets cause a lot of destruction to a unit. However, if you do allow pets be sure to make proper disclosure to the tenant that if damage occurs that the tenancy will be immediately terminated.

8. Smoking policy-If you allow smoking in your unit, be sure to make proper disclosure to the tenant that if damage occurs that the tenancy will be immediately terminated.

9. If the unit is only for residential use you must state that.

A Rental Policy might look something like this:

122 Smith Lane Rental Policies

Thank you for your interest in our rental unit. Following is a list of guidelines followed for every rental application received. If you have questions or concerns please don't hesitate to discuss them with us.

RENTAL TERMS:

FAIR HOUSING LAWS:

FALSE INFORMATION:

ADDITIONAL OCCUPANTS:

OCCUPANCY POLICY:

IDENTIFICATION:

REFERENCES AND RENTAL HISTORY:

CREDIT CHECK AND FINANCIAL RESPONSIBILITY:

CRIMINAL BACKGROUND:

PETS:

SMOKING

RESIDENTIAL USE ONLY:

CITIZENSHIP:

SELECTION PROCESS:

Consistency is a must with a rental policy. There will be many tenants who present for application who will tug on your heart strings. If they don't meet the criteria don't give in. My experience has been that these types of tenants end up costing you money in the long run.

Applications will be reviewed as received. The evaluation process usually takes no more than one (1) week. The unit will be offered to the most qualified applicant. You will receive notification in writing by e-mail of our decision. In accordance with the Patriot Act, all tenants will be asked to provide proof of United States Citizenship. This rental is for residential use only. : No smoking is allowed in or around the unit. Additionally, any visitors of the tenant must not smoke.No inside pets will be allowed under any circumstances. Outside pets will be considered on a case by case basis. However, if outside pets are allowed and they become a nuisance to neighbors you will be given one (1) warning to correct the situation. If a second incident occurs your tenancy may be terminated. Applications will be asked to provide a record of criminal convictions. Additionally, we will run a criminal background history, including NCIC, III, & CIB. In order to conduct this screening we will require your written permission.Only applicants who have positive credit history will be considered for tenancy. Accordingly, please provide your social security number and date of birth so that we may run a credit check. The fee for this check is $30.00 and must be paid in advance. If you have a negative credit history we reserve the right to deny your application. We will contact current and prior landlords. If you are a first-time renter please provide at least three (3) character references. Evaluations will be based on timely payment of rent, neighbor's comments, and shape of the unit when tenancy was terminated. A current photo ID from each adult applicant is required. A driver's license, or passport will be acceptable. The maximum number of occupants for this rental is _____ persons.Only those who have been approved through the application process will be allowed to live in the unit. Any additional residents, other than minor children, must go through the same application process. Adding an additional tenant will be automatically declined if the addition will result in overcrowding of the unit. A separate application will be required from every adult residing in the unit. Applications that contain false information, unverifiable information, or an incomplete application will be rejected We will not discriminate on the basis of race, color, national origin, familial status, age, disability, or sex. Prospective Applicants must be financially able to meet the rent and security deposit. Further, the tenant must agree to the terms of the lease which include the start date, the duration of the lease and the maximum number of occupants for the unit.