12 reasons that your rental application could be denied.

In California’s competitive real estate market competition for space even extends to renters. It is important to put your best foot forward when applying to lease a property. Here are the top 12 reasons that your application to rent could be denied. 

Insufficient or unstable income: 

Property owners look for a low lease to income ratio. The lease to income ratio is a good indicator of an applicant's ability to cover the rent payment long-term. For California, the ratio of the median gross monthly rent to median household income was 24.1% in 2019.  Anything less than 30% will be looked on favorably by a landlord. You will want to make sure that you provide good documentation to substantiate your income. Typically, the two most recent paystubs and/or last year's tax return. 

Insufficient cash: 

Likely you have heard the expression in real estate that “Cash is King”.  While this is used in the context of purchasing real estate it also applies to rentals. At BOND Realty we use a multiplier of liquid funds to total move-in expense (first month’s rent plus the security deposit). A good minimum would be 2 times, 3-4+ would position you very well. 

A poor credit score: 

Your credit score is a reflection of your use of credit and timely payment history.  Anything in the 700s will position you well. 800+ and you would be considered top tier. 

Marks on your criminal background check: 

A property owner has an obligation to other tenants in a building to maintain a safe environment. If, you do have any marks in your background be sure to highlight all the positive things that you are doing and programs that you are participating in. Tell your story and the efforts that you have made to remediate your history. 

Bad References: 

It would seem self-explanatory that you should only provide references with which you have had a positive experience. Do not for example use a reference that you are fighting with or from historic employment that you were hard terminated from. 

Previous Evictions – Unlawful Detainers: 

A previous eviction aka Unlawful Detainer is a Red Flag for property owners. 

Unexplained gaps in your rental history: 

If asked you will want to make sure that you give a full accounting of your rental history. Stable rental history provides a window into future performance. 

Too many occupants applying to live in a unit: 

A property owner cannot discriminate against a host of protected categories including family status. There are limits on the number of occupants that is safe per unit. California's Department of Fair Employment and Housing (DFEH) uses a formula-based occupancy restriction, known as the "two plus one" formula, which permits two people to occupy each bedroom, plus one sleeping in the common area. So, for example in a two-bedroom apartment applying for 6 or more occupants would be an immediate decline due to safety concerns. 

Lack of professionalism: 

From the moment you call and schedule a tour of a property you are being evaluated. Be professional at all times. Show up on time and dressed for success. Park in designated parking spots only. Have your car looking presentable. You do not have to have a nice high-end car, but it should be washed, maintained and clutter-free. The property owner will use your personal persona, cleanliness, and presentation as a guide for how you will maintain the rental unit. 

You did not follow the directions: 

The ability to follow the application instructions is a reflection on how well you will comply with building rules and following instructions going forward. Pay attention to the details. 

Untruths in your application: 

Never lie on an application, period. See my article (To be honest with you...).  Most leases have a clause that the property owner is entitled to terminate the lease agreement and enforce an eviction if it is discovered that a tenant lied on their application. 

You acted too late: 

Do not take it personally if you lost a place because of timing. Now that you have been through the process and have all the documentation in order, you will be well-poised for the next place. Keep trying. 

The bottom line: 

Approach renting real estate the same way that you would apply for a job. With a bit of hard work and attention to detail, you will have a leg up on the competition.