- Basic Qualifications Landlords and Property Managers Check
- Information Common to Rental Applications
- What to expect in Fees Associated with Renting a Home
- Where to Get Your Credit Reports
- Renting with Pets
- Resources: Landlord Tenant Act & Arizona Tenant Advisory
Qualifications for Tenants
Credit Checks and Background Checks Will Generally Be Run on All Applicants over 18
Know your Credit Scores on all 3 major credit bureaus. Unlike mortgage lenders who pull all 3 bureaus when you apply to rent only one of the 3 is generally pulled and this varies.
Credit Reports No longer show judgments, liens, or evictions as of about 2 years ago. Bankruptcy may be the only public information on credit reports. Chapter 7 Bankruptcy stays on reports for 10 years.
Businesses have other resources to obtain this public information. Consumers should have records for these events.
A credit check will show if there is a large amount of consumer debt that could affect your ability to pay the rent on time or if you have a generally poor credit history. If you have open collection accounts, you may have a problem renting a home.
Some landlords are requiring credit score minimums 600 and above.
According to Experian a Fair Fico Score is 580-669 and Good is 670-739
Fair Vantage Score is 601-660 and Good is 661-780
Check out this article on credit and scoring models
What is a Good Credit Score:
There is additional information at the end of this article regarding credit.
Income for Tenants and Employment Verifications
If you are an employee receiving a W-2 and pay stubs your gross Income before deductions is your income. Check what your actual income is per month. Unfortunately, prospective tenants often over or underestimate their monthly income and the application shows an amount different than the pay stubs.
Make sure the information matches!
For self-employed you will need to provide a year to date profit and loss statement and possibly 2 years of tax returns and/or bank statements for a certain period. Your income is basically your adjusted gross income after expenses. This shows on your tax return as adjusted gross income.
If you receive Social Security or Disability Income you will general be asked for a copy of your award letters.
Most Landlords will require monthly income to be 3+ times the monthly rental amount. For budgeting, it is a good idea to stay around a third of your monthly income. You may need to go higher in some rental markets due to the substantial increases in rent the last few years. Some landlords are requiring 4-5 times rent in income.
Verifications of employment, income and continued employment for the foreseeable future will be verified.
If you have had job or income issues because of Covid-19 you may have a problem getting your application accepted. Property managers and owners are concerned with the prospect of job or income loss resulting in the potential of not being able the afford to pay your rent.
If you are renting with a spouse, partner, roommate, etc. your income will be combined to qualify.
No History of Evictions and a History of Good On Time Rental Payments
Rental payment history of current rental and possibly the previous rental will be verified. If your rent is due on the 1st of the month it needs to be paid on or before the first. Paying after the first you are LATE and may incur late fees. Landlords do not look favorably upon any late payments.
Some landlords will stipulate no evictions in last 3 years-7 years.
**The landlord prior to the most recent one may be checked to see not only that you were a good tenant and paid your rent on time, but also what kind of condition you left the property. Was all the security deposit refunded or was some or all held because the property had been damaged or left a mess.
No Criminal History
A background check can turn up any history of criminal activity. You can be declined if you have been convicted of a crime that could endanger the safety of other tenants, such as drug dealing, domestic abuse, assault etc.
Security Deposit Amount Required
The amount you can request will differ based on your state laws, certain states set a limit on how much you can charged. The security deposit amount is based on the monthly rent.
**Arizona Security Deposit can be 1.5 times the monthly rent. The tenant can offer a higher amount, but the landlord cannot require a higher amount
Information Common to Rental Applications
Date of Birth
Social Security Number
Current Address and Address history for 1-2 years or more (Your rent payment history will be verified)
Employment 1-2 years or more history (Employment is verified)
Approximate monthly gross Income for W-2 employees. Self employed see income section in beginning of this article.
Copies of 2 most recent paystubs (In some cases you may be asked for tax returns, bank statements, tax returns especially if self employed)
Copy of Driver’s License or Government Issued ID
Residence History 1-2+ years Landlord and Contact Information
Current rent or mortgage payment
Personal References Names, Address, Relationship and Contact Information
Dependents and Additional Occupants. Usually credit and background checks done on anyone over 18 years
Pets/Service Animals: Breed, Weight, Age, Gender. Some properties don’t allow pets and others may have a restricted breed list. Service animals are allowed. However, you will have to prove they are service animals.
Credit and Background Checks will be done and there will be a fee for this for each person over 18
This is generally not refundable
Your social media accounts may also be reviewed to see what your character might be.
In a rental market that is experiencing a shortage of supply landlords have the luxury of collecting a number of applications before making a decision. They are going to choose the tenant(s) based on whom they believe will pay the rent in a timely manner and take good care of their investment. So be prepared you have competition for the home you want.
If you see a home you want to rent you need to apply as quickly as possible.
**It may take a few days to a week or more to get a response after you apply to rent a home.
Write a Cover Letter to Help You Compete
The 2020 Rental Market is very fast and competitive due to a shortage of homes to rent and increasing demand. Be prepared that you may be competing with several other applicants. Make sure you provide all the information requested on the applications.
Also, you want to personalize yourself to the landlord. It is recommended that you write a cover letter explaining why you and anyone else that will be living in the home would be good tenants. If there is any adverse information, consider explaining why the situation occurred and how it is or has been resolved. Be truthful with all the information you provide.
If you have pets a brief description of your furry family member(s) and photo. Recently, had situation where only small dogs were being allowed. Clients had a lab/border collie mix. Agent evidently had no idea what kind of dog this was. So, we provided a photo and a personality profile of this laid-back dog and they decided to allow the dog.
You want to be real people, not just an application, credit score, income, job stability, rent history and background check.
Landlord may choose you even if you don’t have the best credit or profile, if they believe you will be the best tenants.
If you write a cover letter do not include any information that would disclosed any of the following information.
Federal Fair Housing Act prohibits discrimination
National Association Of REALTORS® Code of Ethics adds Sexual Orientation and Gender Identity to protected classes. However, Not All Licensed Real Estate Agents Are REALTORS®
REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.
What to expect in Fees Associated with Renting a Home
Credit reports and possible application fees for each person $40-$55+
Earnest money deposit to hold the home ($500-$1000+), which is applied to Security Deposit when you sign the lease.
Security Deposit usually one month’s rent to 1.5 of month’s rent in Arizona – this is the maximum they can request. For example, rent of $1300/month could be $1300-$1950. If your qualifications are not as good as landlord would like, consider offering a higher deposit.
First month’s rent due at lease signing
May have Cleaning Deposit/Fee
Pet/Deposit Fee Some landlords charge an upfront deposit and monthly fee per pet
In Arizona some Landlords pay a Rental tax, which is often charged to the tenant
In the last few years seeing some property management firms charging upfront Admin Fee of $100-$300+ and monthly admin fee can range from 1%-6% of the rent
Some have a HVAC Filter Maintenance Program at a cost of $20 per month
You need to take these extra charges into account when budgeting for your new home
Other expenses you should account for:
Connecting Utilities and Monthly costs: which is generally tenants responsibility
Electric, Water, sewer, trash, gas in some locations
Where to Get Your Credit Reports
Know your Credit and Credit Scores
Good Credit means you can get the best interest rates on credit cards, insurance rates, car loans, ability qualify to rent, get a mortgage, even employers frequently check your credit. If you have poor or bad credit it costs you money.
If you aren’t already keeping track of your credit here are some resources
FREE Credit Reports. Federal law allows you to:
Get a free copy of your credit report every 12 months from each credit reporting company.
Ensure that the information on all of your credit reports is correct and up to date. Lots of sites promise credit reports for free. AnnualCreditReport.com is the only official site explicitly directed by Federal law to provide them. You can get copies of all 3 Credit Reports: Transunion, Equifax and Experian.
If there are mistakes on your credit reports, you can get information on how to dispute the information and get reports updated. Once a dispute is submitted it may take 30-45 days to get a response.
This website contains great information for consumers. Site does not provide Free Credit Scores
Credit Reports No longer show judgements, liens, or evictions as of about 2 years ago. Bankruptcy may be the only public information on credit reports. Chapter 7 stays on reports for 10 years.
Businesses have other resources to obtain this information. Consumers should have records for these events.
Credit Karma, Nerdwallet and Credit.com are all free sites primarily supported by advertisers.
You get access to your consumer credit reports & scores:
Credit Kharma gives Vantage Scores TransUnion and Equifax https://www.creditkarma.com/
Nerd Wallet only shows Vantage Score Transunion https://www.nerdwallet.com/
Credit.com Shows only Experian Credit Report and FICO Score https://www.credit.com/
Banks have been showing credit scores to their customers.
Fico scores are more conservative than Vantage Scores. So, do not be surprised if the business credit report score is lower than expected. Consumer version of Vantage scores can be 20-50+ higher than consumer Fico scores
Landlords and Property Management firms use different business credit reports and scoring models that are different than the free consumer versions. You won’t know which of the 3 credit bureaus they will check. As a result it is important that all three have the correct information and your scores are as high as possible.
You get your scores and reports. Keep in Mind Scores from Consumer Sites can tend to give you a higher score than what the creditors will see when they pull the business version of credit scores. You may see a Vantage Consumer score 50+ points higher than Business Credit Reports Landlords or property management companies see.
Business credit reports use different mathematical algorithms that in general result in much lower and more conservative scores.
Consumer Credit Scores are available from some Banks and Credit Card Companies as well. However, keep in mind these consumer scoring models may be inflated compared to business credit models
The information on your credit reports may be incorrect. It is your responsibility to make sure all three credit bureaus have up to data and accurate information.
Renting With Pets
If you have pets this adds an additional issue for renters. Roughly 67% of households own pets. 63.4% own Dogs and 42.7% own Cats. *
Some Landlords don’t allow any pets. However, a larger number will consider pets with restrictions. Cats may not be allowed at all or only fixed female cats and sometimes fixed male cats. There may also be age requirements.
Certain dog breeds may be completely be restricted frequently by large property management firms that don’t have the higher insurance liability coverage needed to cover them, even if the owner would consider them and pay a higher insurance premium to cover. Tenants will frequently need additional pet insurance to cover potential liability if their application is accepted. Again there may be age restrictions as well.
Some places only allow small dogs and the definition of “small” my range from 20 pounds, 30 to 40 pounds.
Common dog breeds including mixed/mutts that contain some of the same breed that are often not allowed:
- Alaskan Malamutes
- Cane Corso
- Doberman Pinschers
- German Shepherds
- Great Danes
- Pit bulls
- Siberian Huskies
- Wolf Hybrids
The problem is each rental may have different rules that makes finding your next rental a challenge. Your application can be declined even if you meet all the rental qualification guidelines, but you pet does not.
Unfortunately, the Arizona Regional MLS doesn’t have a category that specifies acceptable pets, only that they will be considered. Sometimes the information will be mentioned in private remarks that only real estate agents can see. More often your agent will need to research and contact the listing agent directly to discover what is will be considered. Even this doesn’t guarantee acceptance of your pet since the final decision will be the owners and other applications may have pets they prefer to accept.
If you have questions regarding rentals or would like my help please let me know.
Arizona Residential Landlord and Tenant Act
Arizona Tenant Advisory: