If you’ve been looking for a rental of any kind, you know how tough the hunt can be. Dozens of applicants for each vacancy, stricter credit, income, and referral requirements from landlords, bidding wars. These are, unfortunately, all part of navigating today’s tough rental market.
The culprit is a national housing shortage that has been brewing for more than a decade. Ever since the housing crash of 2008, new construction of homes and rental units has slowed dramatically. Any recent building uptick has been offset by supply chain and other pandemic-related delays. Meanwhile, rising mortgage rates make owning a home less affordable, prompting lots of would-be buyers to stay put in the rental market.
The result? There are many more people who want to rent than the number of rental units out there. That rental market squeeze means higher prices, forcing most people to spend more on rent than the recommended 30% of income.
In the first three months of 2022, apartment occupancy hit an all-time high of 97.6%. During the same time period, asking rents jumped an average of 15.2% throughout the country.
These four steps can help you anticipate what landlords are looking for and help you present yourself as the ideal tenant.
Tips to Get Approved for a Lease
Step 1: Know Your Number
Determine just how much you can afford for housing costs.
The advertised or asking rent is just the beginning. You’ll also need to take any fees, utilities, maintenance, parking, and renters insurance into account. With inflation hitting a 40-year high, you may need to adjust your estimates for these costs upward.
Take into account the bidding war environment. In the heat of the moment, you may outbid the others but also end up with an apartment you can’t comfortably afford. To avoid this scenario, determine your ideal monthly payment and stick to that number, no matter how tired you are of the apartment hunt.
💡 Need help figuring out housing costs? Check out our cost of living by state breakdown.
Step 2: Prepare Your Rental Resume
Apply for a rental the same way you approach applying for a job. You want to make sure you fulfill all of the requirements, and then some.
The first step to getting approved for an apartment is usually filling out an application online. Be sure to do so accurately and thoroughly. When the time comes to see the place, you’ll help make your case if you bring the following:
Copies of Your Credit Reports
Landlords routinely do background and credit checks on applicants they are considering. Offering a copy of a credit report gives them on-the-spot information. If something on your report is confusing, you can attach your own letter of explanation.
Most landlords will look for a good FICO® score (670 to 739) or higher. Find your credit score on a loan or credit card statement or through an online credit score checker. Or get it for free from Experian.
Proof of Employment and Income
Landlords want to know that you can comfortably afford the rent. To prove you can, you could bring copies of your past three to six months of pay stubs, a copy of your most recent tax return, and contact information for your current employer. (This may be more than the landlord is asking for, but it helps build your case.)
Some, but not all, landlords also require employment history information. Having a list of former employers and their contact information on hand can help speed up this process. Even if it’s not required, the list helps paint a more complete picture of why you’re a trustworthy candidate.
References
Be ready to present credit references, which may include character references and asset documentation. Personal references from your boss, a co-worker, or another nonfamily adult who can vouch for you are a good idea. The landlord or agent may not call these people, but having them on your list is a sign of your professionalism and trustworthiness.
Landlords probably also will want the names, locations, and contact information of any previous landlords. A stellar rental history can help put you ahead of the crowd, so you want to make it easy for the agent or landlord to check on you.
If you’ve had trouble making rental payments, it’s best to be honest and offer an explanation.
Documentation for Service or Assistance Animals
According to the Fair Housing Act, a person with a disability may seek a “reasonable accommodation” from a housing provider so that they may have an equal opportunity as a nondisabled person to use a dwelling, even one that otherwise does not allow animals. The disability can be physical or mental.
Service animals, defined as dogs, are not considered pets, and housing providers cannot charge fees or deposits for them.
So-called emotional support animals have ruffled feathers throughout the country. First, applicants with assistance animals must make a request for reasonable accommodation, and not necessarily in writing. If the disability is not observable, they must provide reliable information — typically a letter from a medical provider or therapist — to the housing provider showing that the animal provides assistance.
Beyond that, the U.S. Department of Housing and Urban Development (HUD) does not allow housing providers to seek personal details of a person’s medical history. Importantly, HUD says that online certificates alone are not sufficient to reliably establish that a person has a nonobservable disability or disability-related need for an assistance animal.
So if you have assistance animals, it’s a good idea to bone up on the laws, which can be complicated, and have professional documentation.
Step 3: Show an Interest
It may sound trite, but landlords and rental agents are reassured when they know that someone really wants to live in the property. At a time when demand is high, this can be even more important as landlords become inundated with calls or online requests.
If you’ve visited the property before, have a friend in the same complex or nearby, love the neighborhood, or even appreciate the architecture or amenities, be sure to say so. Landlords want to know you’ll enjoy living there and, in turn, take good care of your new home.
Step 4: Prepare to Pay
Many leases have been lost when an early and promising applicant is ready to rent but doesn’t have the funds available.
Make sure you bring your checkbook or an electronic payment option so you can pay your security deposit, first month’s rent, and whatever else is required immediately. And, of course, make sure you have the funds available, even if your budget is having to also cover moving expenses.
Move-in money can obviously be a challenge to come up with. If it’s several thousand dollars, a personal loan could help.
Did you snag the apartment or house? Once you move in and exhale, renter-friendly updates can help you make the space your own.
The Takeaway
It’s a challenging time to look for a rental. But preparing thoroughly before you start your hunt and taking steps to show landlords your qualifications and genuine interest can help you stand out in the crowd.
In this rental squeeze, however, some house hunters may find that it makes more sense to build equity in their own home, and generational wealth, than pay rent.
If so, SoFi is here to help.
Consider that SoFi home mortgage loans come with competitive fixed rates and can call for as little as 3% down for qualifying first-time homebuyers.
Photo credit: iStock/cnythzl
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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