When you create eye-catching property listings at property management platforms like Padleads.com, expect several applicants to contact you especially if you syndicate your listing to high-traffic rental websites.
However, not all applicants will successfully pass the screening process. All landlords would probably attest that rejecting a potential tenant is one of the most difficult things to do.
Rejecting applicants, if not done properly, might offend them and they will never do business with you again. If done right, rejected applicants, once they become more qualified to apply for your housing, could still consider to reapply for your other vacant units in the future. How do you tell an unqualified tenant that their application will be denied without causing trouble for yourself or burning bridges with them?
Learn how to say NO.
Some people find it difficult to say no because they are not comfortable or they feel guilty when they reject someone. This usually stems from being a people pleaser. But the tendency of this is someone will take advantage of your weakness.
Work on this flaw and remind yourself that you’re doing this for your good and that you can’t approve all applicants if you don’t have enough vacant units for them.
It’s not easy but you have to keep these things in mind:
• Saying no can be empowering
When you take full control of a situation, you will feel a sense of empowerment because you achieved something difficult for you to do. If you can do this and not feel like a bad person, then it will get easier in time.
• You can say no without being offensive
Just because an applicant is not qualified, it does not mean that you will not take in consideration how they might feel or react. You can say no politely and pleasantly to avoid upsetting the applicants.
Related article: How to be an Ethical Landlord
• Think about how this will affect you
You have to think of yourself first. It is not necessarily a bad thing because the main purpose of your renting out properties is that you can gain a sufficient and stable flow of income for yourself.
Although you will reject them, make sure you reject them with a valid reason, preferably with a legal basis, and not just because you do not like them. Here are some of the legal basis for you to reject an applicant:
• They cannot afford rent
You should not rent out your property if the applicant doesn’t have sufficient funds to provide you the payment every month. Think of the bills and the services that you need to pay for maintenance, which you must pay from the rent you collect.
Related article: Income Documents You Can Ask From a Potential Renter
• Not-so-good references
Part of the screening process is also checking out their references. Those are usually people who know them personally and have past transactions with them. This is a must-do for you as this will give you an idea of how they are with their network of people. Ask for references when you go over their applications.
• They have been evicted before
It is an advantage if they have a history of renting out properties and if they can give you contact details of previous landlords.
If they have a history of eviction, then you can say no to them especially if their previous eviction was due to criminal activity, constant leasing violations, damage to property, or conflict with landlords and neighboring tenants.
• History of illegal activities
No landlord will want to open their properties to people with a history of illegal activities. You need to project that you have a safe environment for your tenants. Renting out your unit to someone with a criminal background, especially those who have committed sexual misdemeanors, assault, or drug use, will put neighboring tenants at risk.
How do you to formally reject them?
• Utilize the LPA Denial Letter
This is used when there is a legal basis for you to reject an application. It has a checklist for you to select your reason for rejecting a tenant.
• Reject them by NOT rejecting them
You can avoid saying outright that they were denied. You can say that you found someone more fit for the property or that someone had already closed the deal before them. They would understand this since they are aware that they aren’t the only ones looking for properties to lease.
This happens all the time. Many applicants are qualified but gets denied not because they are not good enough, but because another applicant was simply better.
When screening and selecting applicants, the main thing you have to master is learning to say no but doing so in a professional manner and with a valid reason. A bad tenant can be such a headache and saying no to them is simply making a good business decision, so you don’t have to regret that.