rental applications

Apache is functioning normally

[Editor’s note: This is an excerpt from the conclusions from the category product review series for the small landlord property management software sector. It answers two of the questions posed in the introduction. Originally published in the Geek Estate Mastermind.]

How are property management software companies impacting the small landlord business model?

Vendors are making it easier to start or continue operating as a DIY. Certainly, a trusted partner to handle the payments, screening, and marketing makes grokking the operation of a rental more feasible for newbies and part-timers. A small monthly vendor fee (or free) is replacing the model of paying 5-10% of monthly rent for a full suite of services. The time to money trade-off is worth it for many.

Are online rental applications becoming mainstream or are they still mostly on paper?

It depends on the definition of “mainstream.” Digital signatures for documents of all types is still growing in demand. Search inquiries for rental applications continue to increase year over year, according to Avail. Thousands of landlords will screen their tenants online this year. Online rental applications are becoming the only way forward as both demand and adoption increase rapidly.

Source: geekestateblog.com

Apache is functioning normally

[Editor’s note: This is an excerpt from the conclusions from the category product review series for the small landlord property management software sector. It answers two of the questions posed in the introduction. Originally published in the Geek Estate Mastermind.]

How are property management software companies impacting the small landlord business model?

Vendors are making it easier to start or continue operating as a DIY. Certainly, a trusted partner to handle the payments, screening, and marketing makes grokking the operation of a rental more feasible for newbies and part-timers. A small monthly vendor fee (or free) is replacing the model of paying 5-10% of monthly rent for a full suite of services. The time to money trade-off is worth it for many.

Are online rental applications becoming mainstream or are they still mostly on paper?

It depends on the definition of “mainstream.” Digital signatures for documents of all types is still growing in demand. Search inquiries for rental applications continue to increase year over year, according to Avail. Thousands of landlords will screen their tenants online this year. Online rental applications are becoming the only way forward as both demand and adoption increase rapidly.

Source: geekestateblog.com

Apache is functioning normally

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations.

Can you pay a loan with a credit card? Yes, paying a loan with a credit card is sometimes possible. Yet, whether or not you can do so depends on factors such as the lender’s policies or the type of loan you want to pay off.

Good credit can open doors, but bad credit can keep them shut. In fact, research shows one in 10 Americans were denied work because of poor credit history! Good credit is important because it tells lenders you’re not a risk and that you pay loans on time. A good score can help you get approved for mortgages, financing, loans, and credit cards. Bad credit leads to more fees, higher interest rates, and rejected applications.

Aside from securing loans, your credit can impact your ability to secure housing and even employment. Understanding your credit score can help you make more informed decisions. We’ll explore how credit works, why it’s important, and how to maintain a good credit score.

What Is Credit?

We often hear people saythat it’s important to build credit. But what is credit? When you pay for something “on credit,”you’re actually borrowing money to make the purchase, which you pay back later. But when people say “your credit,” they’re usually talking about a credit score.

Your credit score is a three-digit number calculated by FICO®, VantageScore, or other scoring models. Your score indicates how well you manage credit. Institutions and agencies use this score to determine risk, such as how likely you are to repay loans on time. A credit score of 670 or higher is considered good by most standards.

Why Is Credit Important?

Good credit is important because it helps you secure loans, mortgages, rentals, and other important financial goals. Financial institutions perform a credit check before approving applications, and use your credit history to determine available options, associated fees, and interest rates.

Credit can impact our daily lives in many ways. Potential lenders, landlords, and employers might reject your application if you have bad credit. But good credit can help you get approved for loans and save money.

There are many benefits to a good credit score. You’ll need a strong credit score for things like:

  1. Loan applications: Lenders assess your credit to determine how likely you are to repay a loan. People with poor credit may face higher interest rates, smaller loans, or rejection.
  2. Credit card applications: Banks and credit card companies need to look at your credit report before you can get a credit card. With good credit, you can get lower interest rates and higher limits.
  3. Mortgage applications: Your credit score will determine monthly payments and interest rates. Good credit is essential if you can’t afford a large down payment.
  4. Rental applications: Landlords can run a credit check or ask you to provide one. Credit score won’t impact the rental costs, but a landlord can reject an application due to poor credit.
  5. Job applications: Prospective employers can ask for credit checks, especially if you are dealing with sensitive information. You may need a credit check for jobs in accounting, sales, the military, and other industries.
  6. Insurance applications: Depending on where you live, you might need a credit check for insurance. Not all states allow insurance companies to access your credit information.
  7. Vehicle rentals: You might need a credit check for vehicle rentals if you don’t pay with a credit card. And depending on your state and the company, your credit may impact your rental options.
  8. Credit card benefits: Good credit can help you secure credit cards with benefits, including airline miles, travel credits, cashback rewards, and other perks.
  9. Lower interest rates: Poor credit leads to higher interest rates, making borrowing money expensive. The better your credit, the more money you will save.
  10. Better loan terms: Good credit gives you more options and freedom for repayment. Bad credit can limit your options to short-term loans with higher monthly payments.

Credit is always important, no matter how high or low your score. At the end of the day, everybody needs good credit to achieve their financial goals. That’s why it’s important to understand what can impact your credit score.

What Can Impact a Credit Score?

It might be surprising, but personal savings and stocks don’t impact your credit score. Credit score calculations look at your detailed credit history, and anything that impacts these calculations will impact your score.

The five main factors that impact your credit score are:

  1. Payment history: when you make payments
  2. Credit utilization: the amount of credit you use compared to your limit
  3. Credit age: how long you’ve had credit and how old your accounts are
  4. Credit mix: the types of credit you hold
  5. Credit inquiries: how often your credit is reviewed

While this might look simple, many surprising scenarios can affect your credit. Unpaid parking tickets in collections can impact your payment history, for example. And closing a credit card can lower your credit utilization. You can review your free annual credit reports to watch for drops in your credit and work toward preventing a bad score.

What Happens with a Bad Credit Score?

Keep in mind that you can improve a bad credit score over time. But until you do, there can be negative consequences. Most credit scores range from 300-850, depending on the scoring model. A bad credit score generally ranges from 300-600.

Bad credit scores can lead to:

  • Rejected applications
  • Higher fees and interest rates
  • Lost work opportunities
  • Difficulty renting a vehicle
  • Required deposits for utilities
  • Difficulty securing a student loan
  • Expensive insurance rates
  • Difficulty opening bank accounts

Bad credit doesn’t shut every door, but it can make life more difficult and expensive. It’s important to check your credit score before buying a home, applying for student loans, and other important life events. This will give you time to understand your situation and make a plan to build and improve your credit.

How Do You Build and Improve Credit?

Now that you understand what credit is and why it’s important, you can plan for success. There are many ways to build and improve your credit without overextending yourself. No matter your score today, you can work toward a bright future with good credit.

  1. Understand how credit works: Learn how your credit score works and what can impact it.
  2. Set goals for yourself: Use this knowledge to set goals for minimizing debts, increasing utilization, and more.
  3. Address your debts: Assess your debts and plan to pay them off.
  4. Monitor your credit score: Look for suspicious activity on your credit report and be aware of the potential impact on your score.
  5. Clean your credit report: Dispute errors on your credit report.
  6. Get a secured credit card: Use it regularly and pay your bills on time.
  7. Become an authorized credit card user: Build credit in association with somebody you trust.
  8. Apply for a credit builder loan: Improve your score if you have poor or no credit.
  9. Create a budget: Manage your finances to ensure consistent repayments.

Achieving a good credit score isn’t the end of your credit journey—once you have a good credit score, you will need to maintain it. Stay diligent and follow best practices to keep a good credit score.

How Do You Keep a Good Credit Score?

Don’t take good credit for granted. To keep a good credit score, you need to stay organized and sensible about your credit usage. This means understanding your responsibilities and following best practices for credit management.

Follow these tips for keeping a good credit score:

  1. Stick to your budget: Committing to a budget can help you make payments on time, which is key to achieving a good credit score.
  2. Avoid carrying debt: Credit utilization is the second most important factor that makes up your credit score. Unpaid debts accumulate interest, which means less money for you.
  3. Pay bills and parking tickets on time: It’s important to pay all utility bills, phone bills, and parking tickets on time. Not paying bills can lead to collections and this impacts your credit score.
  4. Don’t let debts go to collections: You should avoid collections at all costs. When unpaid debts go to collections, it can cause significant damage to your credit score.
  5. Monitor your credit score and reports: When it comes to your credit, ignorance is not bliss. It’s important to watch your credit report for changes, errors, and suspicious activity.
  6. Protect yourself from identity theft: A large drop in your credit score can be a sign of identity theft. Stay aware, protect your information, and consider a credit card with security features.
  7. Use your credit card consistently: Using your credit card will help you build credit—just don’t spend more than you’re able to pay back each month.
  8. Don’t close old credit cards: Closing a credit card lowers your credit mix, so it’s a good idea to leave old credit cards open, even if you don’t use them. Keep an eye on them for suspicious activity.
  9. Only authorize people you trust: Authorized users on your accounts can impact your credit score. Only authorize accountable and trustworthy people.
  10. Avoid retail credit cards: While retail credit cards can be easy to get, they can come with expensive rates and fees. And not all retail credit cards report payments, making them less ideal for building credit.
  11. Don’t treat credit like extra cash: Building credit takes organization and discipline. You should always stick to a budget and avoid spending beyond your means.

Your credit score is like a financial reflection of you, so take pride in your credit and make an effort to keep a good score. Knowledge is power—the more you understand credit, the more confident you’ll feel when preparing for large purchases and other financial ventures.

Whether you have good or bad credit, it’s all about setting goals and staying organized. Remember, your current score is not set in stone. You can always improve credit management and make a difference in your future.

If you’re worried about bad credit or just want to see where you stand, get your free credit score today.

Source: credit.com

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We all know how to rent a typical, cookie-cutter apartment or house. Find a contact number. Set-up a walk through. Fill out the application. Pay your fee and wait for a response.

But sometimes typical just doesn’t cut it.

Maybe you’re looking to secure a unique apartment in an irresistible location. Or you might be seeking the only house for rent in a certain school district. Heck, you may even find yourself in New Zealand needing a short-term (3-month) lease when everyone wants a 6-month minimum.  *raises hand*

Whatever your motivation, here are nine ways you can knock the socks off your next landlord or property manager:

1. Create a Rental Résumé. Treat this like you would a job search. The majority of applications are going to ask for the same information. Put together a basic one- or two-page document containing this commonly requested information. Even if the landlord or property manager makes you fill out the application anyway, at least you’ll already have everything on hand. Be sure to include:

      • Full names of everyone on application
      • Dates of Birth
      • Contact information (phone and e-mail)
      • Current address (length, landlord information, reason for leaving)
      • Previous addresses (with additional information)
      • Social Security numbers Previous commenters note that you may want to wait to reveal your Social Security information
      • Current employment information (salary, length, contact information)
      • Past employment (with additional information)
      • Personal references
      • Vehicle information (make, model, plates, driver’s license number)
      • Pet(s) information (breed, size, age)

2. Pull your own credit report. Use AnnualCreditReport.com, if possible. Pulling your own credit report ahead of time will ensure that you are aware of the information contained in the report. If there are any negative marks, be sure to include a written statement of explanation (especially for any bankruptcies, evictions, or missed rent payments).

3. Obtain and include full letters of reference. Most rental applications only ask for the contact information of your references. However, as with a job, you can go the extra mile by including full letters of recommendation from previous landlords, property managers, or apartment complexes. As a property manager, I was more than willing to write these for our best tenants. Many apartment complexes have a standard reference letter they provide to past tenants upon request.

4. Provide copies of commonly requested “further information”. This is especially important for the self-employed or those with inconsistent employment length. Commonly requested information can include copies of recent paystubs, recent years’ tax returns, net worth statements, bank statements, and income/expense reports for small businesses. Also, landlords may request copies of identification like driver’s licenses, social security cards, or birth certificates.

5. Look sharp. Whether you like it or not, appearance does matter, especially for first impressions. Wash the purple dye out of your mohawk, lose the three wolves T-shirt, and dress business casual. (J.D.’s note: Did anyone notice that Dwight was wearing the three wolves t-shirt on The Office recently? I just about died laughing.)

6. Be five minutes early. Waiting does not impress anyone.

7. Find common ground. In any social encounter, discussing a topic that is familiar to both parties is one of the fastest ways to build rapport. When Courtney and I were searching for apartments here in Auckland, we talked to many different agents and owners. Early on in each discussion, I brought up the fact that I had owned a property management company back in the States. It gave us an immediate connection and built instant trust. While you may not have direct real estate experience, chances are there will be many opportunities for you to find common ground of your own.

8. Know your needs and wants ahead of time. This is a important. Decide ahead of time what features are absolute musts and which are more negotiable. For example, you may know that you need a fenced in backyard for the dog. Or, you may only be willing to consider homes with a detached garage for working on your cars as a hobby. On the other hand, an included washer/dryer may only be a strong want. You’d be willing to purchase these if the rest of the property fit your needs. Get clear on this distinction and be able to articulate this to your potential landlord or manager.

9. Don’t be afraid to ask questions. As a property manager, I always had a weird feeling about tenants who appeared nervous or who seemed afraid to ask questions. The potential tenants whom impressed me the most appeared confident, stated what they were looking for, and asked specific questions about the property. For example, it’s perfectly reasonable (and somewhat expected) to inquire about the average costs of monthly utilities.

Once you’ve established yourself as a strong candidate…leverage it! Knocking the socks off your landlord is not just for fun! After positioning yourself as an ideal applicant, don’t be afraid to start negotiating.

Here in Auckland, Courtney and I had luck negotiating ourselves into a three-month lease even though it ended in the middle of December (bad timing when trying to re-rent). At our last apartment in the States, the complex ended up waiving both the application fee and our required deposit.

Try asking for a 10% rent discount. Many apartment complexes run unadvertised specials, and the individual landlord will often discount if he believes you’ll be a quality tenant.

I’ve seen people have luck requesting upgrades on appliances or requiring that an owner furnish a washer/dryer when previously it wasn’t included. If your condo or apartment charges extra for amenities (gym, pool, parking), try asking for access to be included in your rent.

Most people are scared because they think it’s uncommon to ask for more. I’ve been on both sides of the rental equation and this sort of negotiation happens all the time.  If you don’t ask, the answer will always be “no”. So get out there, impress some people, and take your apartment or house hunting to the next level!

Source: getrichslowly.org

Apache is functioning normally

The time has come. You’ve found the perfect apartment, assembled all the necessary documents, filled out the completed rental application, paid the application fee and submitted everything. You meet all the qualifications and you’re certain you’re a shoo-in to get approved. But, then…nothing. Radio silence. You’re left in the dark, waiting to hear back from the landlord about whether they approved your rental application or not.

While it’s frustrating, there are valid reasons why your rental application may take longer to approve. Knowing what those factors or reasons are lets you prepare in advance to avoid them, thereby speeding up the process and getting you approved for an apartment faster.

Why is the property manager taking so long with the rental application process?

How long does it take to complete the application process? There are numerous factors that go into a rental application taking more or less time to approve. Primarily, it’s because your potential landlord needs to verify or confirm a lot of information. But, some of that information may take longer to verify.

If you’re waiting and waiting to hear back from a landlord about whether you’ve been approved for an apartment or not, these are the most likely reasons for the delay.

1. You didn’t fill out all the information or provide the necessary documents

If you didn’t completely fill out the rental application with all the necessary information, the landlord will need to reach out to you for the missing information. It slows the rental application process down, and it doesn’t leave the best impression on the landlord. When filling out the rental application, completely fill in all the different sections. Most important of all is to include identifying personal information like your name, current address, contact information and Social Security Number. After you’ve completed the rental application, read back through it to make sure you didn’t miss anything.

Similarly, not providing the right supporting documents slows the landlord down. They need the correct documents like your SSN and driver’s license number in order to run a background check on a potential tenant.

2. Running background and credit checks

Either working through an agency or independently, landlords need to run background checks on prospective tenants. It’s one of the fastest ways to verify all the key information like identity verification, monthly income and if you have a criminal record. If any essential information is missing from the initial application, the landlord, property management company or background check company will take longer to find and confirm that missing information.

If the property manager needs your credit report, make sure that you don’t have a freeze on your credit when they run a credit check. They’ll have to reach out to you to remove the freeze in order to check your credit score and credit history. While removing the freeze is relatively straightforward, it still wastes valuable time.

If you have bad credit, that also slows down the process. You’ll likely need to bring a co-signer or co-applicant on board in order to move forward.

3. They’re confirming your employment history and income

During the apartment rental application process, landlords reach out to your employers. In addition to verifying your employment status, place and length of employment and income, employers are great character references.

If landlords are held up at this step of the process, it’s likely because they’ve run into issues attempting to contact your place of current and previous employment. They may have a hard time getting in touch with your boss. If you’re in the process of applying for a new apartment, let your employer know. They can look for a call or email from the landlord and will know to answer in a timely manner.

4. It’s taking them time to confirm your rental history

Similar to digging into your employment history, landlords also explore your rental history report to ensure you’ll be a good tenant. Typically, they’ll reach out to your past landlords. They’ll ask your previous landlords to confirm your previous addresses and get a sense of how you are as a tenant, such as if you have any issues with paying rent on time. You’ll likely need to provide contact information for at least two prior landlords or a leasing office to contact. If you owned a home in the past, they may even want to contact the real estate agent.

Make sure your past landlord knows to expect a call regarding your rental history. That way, your potential landlord doesn’t have to chase down your landlord references. Keeping everyone informed about the process speeds up the approval process.

They’ll also look into whether you’ve had any evictions or dealings in landlord-tenant court.

5. They need to verify your income

In order to get approved for an apartment, the landlord needs to make sure you can comfortably afford to pay rent, as well as your other financial necessities. That’s why most landlords require a gross monthly income three times greater than the cost of monthly rent. In your initial application, you should have submitted several months’ worth of pay stubs, bank statements or proof of annual income like tax returns.

In some cases, the pay stubs or bank statements you provided aren’t enough proof of income. They’ll let you know that you need to provide additional income verification materials. If you have a non-traditional job like a freelancer, you’ll likely need to provide more background financial information.

6. They’re getting in touch with your references

Along with your ex-landlords and employers, some landlords like to hear from your friends and colleagues during the rental application process. It sheds light on you as an overall person, vouching for your reliability, stability and personality.

Before submitting the name of someone you know as a character reference, ask for that person’s permission first. Then, let them know approximately when they can expect to hear from the landlord.

7. They need additional documents or materials to move forward

A landlord will need to hit pause on your rental application if they need more verification. They’ll reach out to you to let you know exactly what else they need to move the approval process forward.

Try to get them the documents or materials they need as soon as possible to reduce the delay.

8. They’re approving your co-applicant or co-signer

If your credit report turned back a bad credit score or your monthly income isn’t high enough, you might not have everything it would take to get approved. But, the landlord can move forward if you have someone like a family member act as a co-signer. Your co-signer or co-applicant needs better financial standing than you, with a better credit score, income and assets.

Your co-signer will still need approval, as well, though. So, it may take anywhere from a few hours to an additional day or so to approve your co-signer.

9. Your payment didn’t clear

It’s embarrassing, but it happens. You could overdraw your account by paying the processing fee or trying to put down a security deposit.

Have all your money set to go to avoid this mishap, which may sour the landlords’ impressions of your finances.

How long does an application take for an apartment?

Typically, the apartment application approval process should take between 24 and 72 hours. But, if you’re dealing with any of the above delays in processing, the time to process rental applications could stretch longer.

If you submitted your application late in the day or on a Friday, the rental application won’t move forward until business hours start again. Submitting your application early in the week or the day sets you up for success and avoids delays.

However, if you’ve done your research and submitted all the right materials at the right time, getting approved for an apartment could take only a few hours.

How can I speed up my apartment application?

With rental properties being snapped up faster than ever, having your rental application held up puts you at risk of losing that dream apartment. Here’s how you can speed up the process of getting approved for an apartment and avoid delays.

1. Complete the rental application with all the necessary information

Make sure you’ve completely filled out all the sections of your rental application. Don’t leave any sections blank and ensure all vital information like your name and SSN are clearly listed.

2. Have all your documents ready

Have originals and copies of all supporting documents ready to go so the landlord doesn’t need to chase them down or contact you again and again.

3. Have proof of income

The more proof of income you can provide, the better. The further back it goes, the steady stream of income shows reliability and dependability. That’s why you should have at least two to three months’ worth of pay stubs ready to go.

If you’re a freelancer or work a less conventional job, have additional income documents going back several months, as well.

4. Have a co-signer ready, if necessary

If you suspect you may need a co-signer in order to get approved, ask someone in advance so they can quickly hop on board if the need arises.

How long does it take for an apartment application to get approved?

Having your application held up in processing puts you at risk of losing the apartment you wanted. The more prepared you are, the faster you could be in the dream rental property.

Zoe Baillargeon is an award-winning writer and journalist based in Portland, Oregon, where she covers a variety of beats including travel, food and drink, lifestyle and culture for outlets like Apartment Guide, Rent., AFAR.com, Fodor’s, The Manual, Matador Network and more. In her free time, she enjoys traveling, hiking, reading and spoiling her cat.

Source: rent.com

Apache is functioning normally

During the apartment application process, landlords ask potential renters to provide a lot of information about themselves. Some are simple like your name and phone number, while others are more personal like your income. But before accepting you as a tenant, landlords need to ensure that all the things you said about yourself are accurate and truthful. That’s where background checks come in.

With your permission, landlords can run background checks on you to verify all the information you provided. After all, landlords want trustworthy and reliable tenants, so they need to do their due diligence. A housing provider’s substantial examination of your past with an apartment background check looks for any red flags or anything they need to worry about. But what are they looking for exactly?

What shows up on a background check?

In a nutshell, a background check shows some or all of the details of your personal, financial and professional background. Taken all together, they help paint a more detailed, complete picture of you for the landlord.

The top reasons why landlords run a background check for apartment applicants

Having a stranger look into your personal history can feel invasive. But if you know what information they’re looking at, it helps ease worries. Here’s everything that a future landlord looks at while running a background check.

1. Confirming personal information and identity

Landlords want to protect their rental properties, and that calls for accepting honest tenants. They need to know that you are who you say you are, so the background check validates your name, address, age and other identifying facts.

2. Confirming past and present addresses

On your application form, you’ll usually need to list your previous address history. During the background check process, landlords verify that you indeed lived at those previous addresses.

3. Criminal history and criminal record

No one wants someone who is potentially dangerous or involved in illegal activity living in their apartment rental. Not only does it put other tenants living in the same place at risk, but it could open the landlord up to litigation if something happens.

That’s why many landlords and property managers conduct a criminal background check to screen for a felony record or prior arrests. These types of checks look through police records across the country, uncovering pending criminal cases, prior arrests and criminal convictions.

Having a conviction on your record is more serious than having an arrest because you weren’t or haven’t been charged with any crimes. Arrests are usually scrubbed from your record after seven years, but convictions stay on your record permanently. That being said, having a ton of arrests credited to you wouldn’t look great either.

4. Sex offense registry

As part of the criminal background screening, landlords in some states may check if you pop up on any sex offender lists. If you are a convicted sex offender, you could be denied on these grounds in some states according to state laws. But others don’t allow landlords to discriminate against potential applicants based on this type of offense.

5. Employment history

Along with your personal information and criminal background, your employment history is one of the most important parts of your background check. On your rental application, you’ll be asked to list your current and at least one previous employer, as well as your position and how long you’ve been with the company.

Landlords verify and confirm all this information while running background checks, often by calling or contacting your employer directly.

6. Income

When submitting your application, you’ll need to include pay stubs or other proof of steady income so the landlord knows you can comfortably afford the monthly rent. As part of the employment history check, landlords confirm that you make as much money as you stated on the application by checking with your employer.

It’s also not enough to make roughly the same amount of money each month as the cost of the rent. Landlords know that you have other expenses like utilities and food, so they need to ensure you make enough to comfortably afford all essentials. Having a monthly income three times the cost of rent is the norm.

7. Renter history

Landlords want a stable renter with good rental history. When they check your rental background, the key areas they’ll look into are your payment history and if you’ve had any issues with previous landlords. They can see if you pay rent on time and if you have any previous evictions.

Late rental payments or being evicted by a previous landlord are big red flags that could result in your application being thrown out.

8. Contact information for previous landlords

As part of the rental history report, contact information for past landlords or property managers may come up. Former landlords serve as great references for you as a tenant. As an extra precaution, you could get asked to list the name, phone number or email of your former landlords so the property manager can get in touch.

If you have no renter history and this is your first time trying to rent an apartment, you can still be considered based on other criteria.

9. Credit report

A standard background check will not include your credit score and credit report, as that is information the landlord needs to specifically request from one of the main credit-reporting agencies. But some details of your financial history can show up on a general background check.

If a landlord wants to know more specifics about your financial history such as what your credit score is or if you have any outstanding debts, they’ll need to request a separate credit check for that information.

How far back does the background check go?

An apartment background check typically looks back at the last seven years of your life, but some landlords may go back as far as 10 years.

The reason for this is that under the Fair Credit Reporting Act, you can access a criminal record for up to seven years. However, you can search for convictions indefinitely and they are a part of your permanent criminal history.

What information do I need to provide for the background check?

Landlords use your Social Security number to access your background information as it’s the one piece of personal data that remains constant your entire life. Addresses can come and go, and you get new phone numbers. Even names get changed. But your Social Security number stays with you for life. That’s why it’s the most critical piece of personal information a potential landlord needs to run accurate and comprehensive apartment background checks.

Do I need to pay for my rental background check?

Nearly all landlords and property managers include an application fee as part of their apartment application process. The application fee covers the background check cost, as well as the cost of running a credit report.

These fees typically run between $25 to $50, but they can go higher and be upwards of $100.

Can I refuse to authorize a background check?

All rental applications should include a section where you can authorize having a background check performed on you during the tenant screening process. You are within your right to not sign and refuse to authorize a background check.

But that also means landlords are within their right to reject your application. Renters with a criminal history aren’t protected under the Fair Housing Act. This leaves the door open for landlords to discriminate or reject your application since they can’t legally look into your background. However, a growing number of cities like Seattle and San Francisco are banning landlords from running a criminal background check. Staying well-versed in the local laws for tenants and landlords in your area helps you know your rights.

Is there anything I can do to improve my rental background check?

All potential tenants want to look as good as possible on their background and rental application to stand out from the crowd. But at the same time, no one is perfect. Everyone makes mistakes and there are hiccups on your background check reflecting that. You may have bad credit. Maybe you’re temporarily out of work due to an unexpected event or sudden job loss.

But having one or two less-than-stellar components of your background check doesn’t necessarily disqualify you from being considered. If you have bad credit or a felony record, be upfront about it with the landlord or answer truthfully if the landlord asks. This reflects well on you, showing that you’re honest and direct about past mistakes. Even if you do have a bad credit history, criminal convictions or are looking for a new job, landlords can still consider you for the rental property if they understand the extenuating circumstances.

Other than that, improving your background check is all about playing the long game. You want to show a property manager good patterns over time, like holding down jobs or raising your credit score through thoughtful spending. Being a good tenant, paying rent on time and maintaining a good relationship with your landlord or property manager will elevate a subpar rental history. Being a responsible person in all areas of life can help you land a great apartment.

Landlords cannot reject your application based on these factors

During this process, it can feel like landlords get pretty personal based on all the sensitive information they collect from you. But there are limits to what information they can gather. They need to have a nondiscriminatory interest in all potential applicants, meaning they can’t reject someone simply because of prejudice. Under both federal and state laws like the Fair Housing Act, landlords can’t deny or exclude persons based on any of the following:

  • Race or ethnicity
  • Gender
  • Skin color
  • Religion
  • National origin/Ethnic background
  • Disability

Background checks help landlords find the best tenants for their properties

Background checks are sometimes a frustrating part of the rental process, especially if yours isn’t perfect. But landlords need to protect their property and create a safe living environment for all their tenants.

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.

Zoe Baillargeon is an award-winning writer and journalist based in Portland, Oregon, where she covers a variety of beats including travel, food and drink, lifestyle and culture for outlets like Apartment Guide, Rent., AFAR.com, Fodor’s, The Manual, Matador Network and more. In her free time, she enjoys traveling, hiking, reading and spoiling her cat.

Source: rent.com

Apache is functioning normally

Apache is functioning normally

Have you ever been captivated by the ins and outs of real estate investing, declaring, “I could do that,” or even, “I want to do that,” but couldn’t pinpoint where to start? If so, you’re in luck because this Redfin article is tailor-made just for you. 

Buying your first investment property has the potential to be an exhilarating and profitable adventure. However, let’s face it: the complex landscape of real estate investing can be intimidating without the right knowledge and guidance. But fear not. In this all-encompassing guide, we will unveil a treasure trove of expert tips and invaluable insights that will empower you to fearlessly navigate the process. From relationship building to conducting due diligence, you’ll be equipped with the knowledge and strategies to enter the world of real estate investing and buy your first investment property with ease. Let’s get started!

1. Learn from experienced investors

When it comes to real estate investing, there’s no better way to learn than from those already doing it. Learning from experienced investors can vastly build your understanding of how it works, beginning with market research and ending with either the sale or signing a tenant in your new rental. You can even learn from other investor professionals by identifying if there is a way you can help them. 

“I hear many new investors say that they don’t feel they have anything to offer, but that is untrue,” says Kathie Russell, a board member of the North Carolina Real Estate Investors Association. “Everyone has something to offer. I guarantee that something you do in your day job or as a hobby will be helpful to somebody.” She adds that to begin building your relationships with investors is to find your local REIA. “These groups are an absolute must for new or aspiring investors. There you will meet your lenders, your mentors, your friends, and your advisors.”

2. Assemble your team

Building a reliable team of professionals who specialize in real estate investment can provide invaluable guidance and support throughout the process. Eric Feldman, SVP of Sales and Marketing at Longhorn Investments stresses the importance of knowing who your decision makers are regarding your investment strategy and process. Within the world of real estate investing, everyone is trying to secure the best deal, thus meaning properties move quickly – so having a team of trusted individuals in place is essential. 

You should identify a knowledgeable real estate agent who understands the local market and can help you identify promising investment opportunities. Additionally, having a competent real estate attorney can ensure that your legal interests are protected during negotiations and contract signings. An appraiser will help identify the actual value of a property, which can help you avoid overpaying. Collaborating with an experienced property inspector can help identify potential issues and prevent costly surprises down the line. Lastly, establishing relationships with reputable contractors and property managers can streamline property renovations and day-to-day operations.

3. Rely on market data

When it comes to real estate investing, Doug Van Soest, founder of SoCal Home Buyers, wisely emphasizes the potential risks involved in buying an investment property. However, these risks can be mitigated by leveraging available data. Van Soest suggests conducting a thorough comparative market analysis (CMA) using the wealth of data at your disposal to understand the current state of the marketplace. By examining factors such as property prices, rental rates, vacancy rates, and historical trends, you can make informed decisions and alleviate some of the risks associated with real estate investments. 

4. Consider area potential and long-term equity gains

Buying your first investment property doesn’t necessarily mean it will be where you reside. When considering where to purchase, you’ll want to think about a location’s potential and the possible long-term equity gains associated with the area. 

Scott Jones, the economic development director for the city of Manor, Texas, proudly showcases his community as a shining example of a location’s potential. “Manor either has or is working to have it all as we speak,” says Jones. “Manor is only minutes away from everything Central Texas offers. This includes abundant, relatively inexpensive land for development, a high-quality education system, first-class public safety and utilities, mass transit to Downtown Austin, and much more.” 

Manor, Texas, has seen significant housing growth year over year. In May 2020, the median sales price was $234,000; as of May 2023, the median sales price equals $350,000 (nearly a 50% increase YOY). Consulting with local experts and real estate agents can help identify up-and-coming areas that can play a pivotal role in creating high ROI opportunities.

5. Explore your loan options

When buying your first investment property, it’s essential to explore the available loan options. Understanding and comparing mortgages, government-backed loans, and private financing can greatly impact your financial success. Research and consult experts to make an informed decision that aligns with your investment goals and long-term stability.

Lender, HomeAbroad has a tip about Debt-Service Coverage Ratio (DSCR) loans “While conventional loans may require income and debt to income, DSCR loans evaluate the property’s income potential and cash flow to determine loan eligibility. DSCR loans do not consider investors’ income, making them ideal for investors seeking cash flow-driven investments.”

6. Perform your legal due diligence

Joshua Holt, the founder of Big Law Investors, urges real estate investors to understand the importance of conducting comprehensive legal due diligence before purchasing a property. Holt expands on this by saying, “check the title deeds to ensure there are no hidden encumbrances or disputes, review zoning laws and local ordinances to ensure that the property can be used as intended, and double check that all taxes are clear.”

“The last thing you want is to find out that local laws prevent short-term lease arrangements after you’ve purchased the property for that specific purpose,” says Holt. “Conducting legal due diligence before purchasing the property is important to ensure you protect your investment and avoid costly legal issues later on.”

7. Never buy a property without having an inspection

A home inspection is pivotal in identifying potential flaws within a property. Home inspections can also help determine an investor’s renovation budget and help alleviate newfound stressors throughout the rehab process. 

Ronnie Jackson, general contractor of Austin Home Renovations, urges buyers to “never purchase a property without an inspection provided by a licensed real estate inspector.” Additionally, Jackson adds that you shouldn’t “complete your option period without having that inspection evaluated by a professional contractor.”

8. Don’t forget about taxes

Yes, taxes are a significant component of real estate investing. First, there are property taxes. Tony Trahan, a property tax consultant of KE Andrews, shares that “when buying a real estate investment property, one of the most critical factors during your due diligence or underwriting process is correctly modeling the property taxes owed going forward. In many states, this valuation determines your taxes and is highly negotiated.” 

Capital gains tax is another tax to consider (and budget for), especially if you intend to sell your investment property. There are two forms of capital gains taxes, short-term and long-term. Short-term capital gains tax refers to the tax paid on profits from the sale of assets that have been held for one year or less. It is generally subject to ordinary income tax rates, which vary depending on an individual’s tax bracket. On the other hand, long-term capital gains tax applies to profits from the sale of assets held for more than one year. Long-term capital gains tax rates are typically lower than ordinary income tax rates, offering potential tax advantages for investors who hold their assets for an extended period. The specific long-term capital gains tax rates depend on the individual’s income level and the type of asset being sold.

9. Submit a competitive offer

When making an offer on your first investment property, you should be prepared to act swiftly and present a strong offer with attractive terms, such as a pre-approval letter, a substantial earnest money deposit, and flexibility on closing timelines. While it’s important to be competitive, it’s equally crucial to ensure that your offer aligns with your financial goals and allows for a profitable investment.

10. Get insurance coverage

Whether you’re in the rehabilitation stage of your home flip or are holding a property as a rental, you’ll want to be sure you’re adequately insured. Comprehensive property insurance should protect the structure, renovations, and fixtures, guarding against perils like fire, theft, and natural disasters. Liability insurance is crucial to cover potential lawsuits or claims by others for injuries or property damage. Builder’s risk insurance can safeguard against losses during construction or renovation, while rental property insurance is specifically designed for landlords, covering structures, liability, and rental income loss.

Pegram Insurance Agency elaborates on landlord policies, “which can help protect you financially in case of damage to your property or liability claims.” Understanding which coverage works best for your situation is critical; Pegram Insurance Agency adds that “there’s a big difference between renting to long-term tenants and renting on Airbnb/VRBO. Airbnb and short-term rentals require specific endorsements for additional coverage, so check with your insurance provider.”

11. Renting your property

If your investment strategy includes renting your property, Jordan Davey, digital marketing director of Victory Property Management, offers insights from mitigating rental risks to maximizing received applications. Davey highlights performing screenings on all applicants, reminding landlords to “not take rental applications for face value. Get income verification and be on the lookout for anything that may appear suspicious.” 

Additionally, Davey recommends working with your real estate agent to price the property accurately. It’s important not to overprice a rental home, but equally important to not underprice. Do your due diligence and review accurate CMA data to determine a price best suited to your market’s demands.

A final note on buying your first investment property 

In conclusion, purchasing your first investment property can be an exciting and potentially lucrative endeavor. By considering key factors such as market research, financial analysis, and seeking guidance from professionals, you can set yourself up for success. Remember to approach the process with careful planning, a long-term perspective, and a willingness to adapt as needed. So, take the leap, embrace the opportunities, and embark on your journey as a real estate investor.

Source: redfin.com