The search is over, and you have a few great possibilities. Should you apply to all of them, or should you narrow it down and only apply to the one you really want? How is a rental application different from a lease agreement, anyway? This part of the rental journey can be confusing and a little bit stressful, especially while you’re waiting to hear if you’ve been approved or not. Let’s review what to expect during the application process and lease signing.
The Rental Application
Unlike a lease agreement, a rental application isn’t legally binding. Even if you get approved, you can change your mind about living there. In fact, some renters will fill out multiple applications and then choose from the places where they’ve been accepted. If you decide to fill out multiple applications, it can increase your chances of getting approved by at least one of the properties. However, keep in mind that you’ll likely have to pay a fee for every application you fill out, which can get expensive if you are applying to several rentals. If you’re renting with someone else, they’ll fill out their own rental application.
Applying to several apartments shouldn’t impact your credit score. Some landlords will do a soft credit pull, while others may do a hard credit pull. A soft credit pull will have no impact on your credit score, while a hard credit pull may lower your score by about five points. However, the scoring model used by FICO allows for rate-shopping, meaning any inquires made within 30 days prior to scoring won’t impact your credit. In other words, applying to multiple apartment communities won’t lower your score beyond the initial pull, if you submit those applications within 30 days.
Bring your driver’s license, references, and pay stubs with you when you apply. The rental application typically asks for the following:
- Name
- Current address
- Phone number
- Email address
- Driver’s license number
- Previous address
- Pets, if applicable
- Employment and income information
- Emergency contacts
- References
- Background information, including questions about criminal charges and bankruptcies
- Vehicle information
While some of the questions may seem invasive, the landlord or property manager wants to make sure you’ll be able to afford the rent payments and that the property will be returned in good condition at the end of the lease term.
As the potential renter, now is a good time to assess the efficiency and service level of the property management company or landlord. Are they responsive, friendly, and helpful during the process? If not, perhaps this isn’t the ideal rental, after all. Once you sign the lease agreement, you’ll spend the next 12 months or so (depending on the length of your lease) dealing with the landlord or property managers, so if you find them unpleasant during the application process, it could be a long year.
The Lease Agreement
Once your rental application has been approved, it’s time for the lease agreement. Before you add your signature to the bottom line, did you read it? If you read it, do you understand it? It may seem basic, but you want to make sure you read your lease agreement. In fact, read it twice. Make sure you understand every part of your lease. You’ll want to know the rent due date, the penalties for paying late, the clauses, and the terms. If you violate your lease in any way, the property manager or landlord could evict you, so it’s important that you get your questions answered now, before signing. As you’re reading, look for anything that seems odd or unusual. While every lease is different and a lot depends on your state laws and your landlord, here are some things commonly included in a lease agreement:
- The property address: This might include a unit number if you’re renting an apartment or condo.
- Your name and the names of those renting with you: This includes all adults who will be living at the property.
- Contact information: For you, the landlord, and anyone else who is on the lease.
- The lease duration (with a specific start date and end date): Take note of the start date since this is the day you can move in.
- An occupancy clause: This might be included in your lease. This clause basically states that only you and the other tenants listed on the lease can live at the property. It may also specify how long guests can stay with you.
- Rent and fees: Pay close attention to this section. This outlines the rent, when late fees will be assessed and how much those fees are, and how much you’ll be charged if a check is returned for non-sufficient funds. This section may also include other fees like the security deposit and any move-in fees. It may also state how much rent will be raised if you decide to renew your lease.
- Early termination: This is a clause that explains what will happen if you break the lease early. Make sure you understand this section, even if you don’t plan on breaking the lease. Things happen, so be prepared. You might have to give a specific amount of notice and pay some portion of the remaining rent. When you sign a lease, you’re agreeing to pay the entire amount of the lease term, and the landlord may want at least a portion of the remaining amount.
- Pets: Your lease agreement will state whether pets are allowed, and if they are, the fees associated with having a pet. This section may also include breed or weight restrictions.
- Maintenance and utilities: This section will outline the process for requesting maintenance, anything you might be responsible for, and restrictions on what you’re allowed to repair or change in the rental.
- Tenant and landlord responsibilities: Your lease might outline some of the rules you’ll need to follow, as well as what you can expect from the landlord. This may cover things like noise, illegal activity, or disruptive behavior. This section might also outline when and how a landlord can enter the rental and the reasons they may need to do so (usually to make repairs or to show the unit to potential renters).
Your lease agreement might include all or none of the above. It could be one page or 50 pages. No matter how long it is or what it includes, make sure you understand it and agree with it. It might be a good idea to have a real estate attorney review the lease since they know the laws in your state and can give you advice about what and how to negotiate.
What to Expect When Renting a House
Since houses are often owned by individual landlords instead of large companies, the lease may look a little different. Property management companies will all likely use the same (or similar) standard lease agreement. Different landlords may have their own unique leases. Regardless, all leases should state the rent amount and the duration of the lease term. In addition, a house rental agreement may include the following:
- General conduct requirements
- Parking restrictions
- Pet allowances
- Proper use of outdoor (or common) space
- Property alteration restrictions
- Garbage removal
- Maintenance requirements
- Utility responsibilities
- Guest restrictions
- Move out conditions and expectations
Make sure you understand all parts of the contract, especially the financial aspects. The rental agreement should clearly state the monthly rent amount, the late fee and the time frame for assessing those fees, and the security deposit. Carefully review what constitutes withholding a security deposit. There should be defined parameters for when the deposit will be returned.
Your rental agreement will likely contain language concerning how much notice the landlord must give you before coming over in non-emergency situations. Your landlord may want to check the smoke alarm batteries, change filters, or have the carpets cleaned. Some states require 24 hours’ notice, so make sure you look up the landlord-tenant laws in your state to see how much notice is required.
Take note of what constitutes termination of the lease agreement. Any grounds for early termination should be stated clearly. The lease should say what will happen when the lease agreement expires. The lease might automatically renew, or it may terminate immediately. Some landlords require a renewal commitment two or three months prior to expiration. The agreement should also describe what the landlord expects the condition of the property to be after you move out.
A private landlord may be more willing to work with you than a property manager at a large apartment complex, so if there’s something you want to negotiate, it doesn’t hurt to ask. This could include negotiating for lower pet fees or a smaller security deposit. Be prepared to offer something in return, such as signing a longer lease agreement or handling the yard work.
Finally, don’t sign your lease before doing a walk-through with the landlord or property manager. This is your chance to look over the property and make note of any existing damage. You don’t want the landlord to use damage that existed prior to you moving in as the reason for not returning your security deposit, so the walk-through is essential. We’ll discuss the walk-through in detail in step eight.