This Article is About
property management
criminal background check
prospective tenant
background screening
rental history
problem areas
juncture
final decision
last word
acquaintance
credit rating
Property Management 101: The Tenant Approval Process
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Once the background screening and credit rating procedures are completed, it is time to put the ball in the owner’s court and let them make the final decision to deny or accept the tenant. Generally, one of three scenarios is found at this juncture, the outright denial, the acceptable, or the somewhere-in-between which we will label the marginal applicant. Regardless of the quality of the application, it is the owner who makes the final decision to accept or reject the prospective tenant!

The Denial

The applicant with multiple problem areas poses the greatest risk as a tenant. Some areas, such as prior evictions, are clear indications that trouble looms and that it’s best to deny the application. (It’s owner’s choice, however!) Bad or weak credit coupled with a lack of upfront cash can also flag an application in a big hurray. Identity problems, unverifiable rental history or employment, or a failed criminal background check more than telegraph serious problems may be just around the bend. Applications such as these should be denied by a sensible owner and if not, maybe it’s best to require that the owner manage the property themselves. Either way, be sure and get it in writing!

The Acceptable

Great credit, good income, excellent job history, and tons of cash are attributes we would all love to find in each and every application that comes along. Acceptance would be quick and easy. Everyone would be happy to make each other’s acquaintance. Move the new tenants in and we are all set. If only it was always this easy! In some cases an owner will ‘Just Say No’ and that’s that! Right or wrong, good or bad, the owner always has the last word--even when the applicant is near perfect in every category. Although it may make you wonder if the owner really just doesn't want to rent their property, it's their decision!

The Marginal

Often times the otherwise perfect application is tainted by negative ratings in one or two areas. “Cash Is King” is the property manager’s mantra when confronted with the less than perfect applicant. A double security deposit cures ills such as marginal credit, non-verifiable income (self-employed), or pitfalls such as negative rental history. At other times, additional security deposit funds (such as 1.5 times the normal amount) will satisfy the owner. It is all up to the discretion of the owner who has the final say in these approval matters.

The Outright Denial

Unacceptable conditions such as felonies, sexual predators, and prior evictions are normally the short list for certain denials. Although it is possible with certain properties in some neighborhoods that the owner may be willing to accept tenants with these attributes, the property manager must re-consider managing the properties based on issues of personal safety, reputation, and liability. Although the owner has the last word regarding the acceptance or denial of the tenant, the property manager in some instances may be best advised to require that the owner manage the property. Regardless, always get the owners decision in writing so that no issues or misunderstandings regarding the acceptance or denial of such a tenant will crop up at a later date.

In Conclusion

Property management is a very difficult and time-consuming practice for agents, landlords, tenants, and managers alike. Training, training, and more training is the only way to keep abreast of the many variables of property management. The tenant approval process is one example of an ever-changing set of property management fundamentals.


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