Reading a rental application without guessing

Screening is where self-managing landlords are most likely to substitute instinct for method, and instinct here is both unreliable and, in several directions, unlawful. The good news is that the method is short. Three checks carry almost all the predictive weight.

One: are they who they say they are?

Photo identification, matched to the name on the application and to the name that will appear on the agreement. This sounds procedural because it is, and it is also the check most often skipped in a hurry — usually for the applicant who is most charming in person.

Two: is the rent affordable on their real income?

Ask for evidence of income rather than a stated figure: recent payslips, a bank statement showing the deposits, or an accountant’s letter for someone self-employed. You are not judging whether they earn enough to satisfy you. You are checking whether this rent, at this income, is sustainable for the length of the term.

The common rule of thumb — rent at roughly thirty per cent of gross income — is a starting point, not a gate. Circumstances vary wildly, and a rigid ratio will exclude perfectly good tenants while admitting some poor ones.

Three: would their last landlord take them back?

This is the highest-value question you will ask anyone, and it works because it is difficult to answer evasively. Call the previous landlord or agent — not the current one, who may have an interest in a smooth departure — and ask a small number of specific things.

• Was the rent paid on time, and were there arrears at any point?
• Was the property returned in reasonable condition?
• Were there complaints from neighbours or other residents?
• Would you rent to them again?

A referee who hesitates before answering “would you rent to them again?” has already answered it.

What you must not ask

Federal and state discrimination law prohibits refusing a tenancy on grounds including race, sex, pregnancy, marital or relationship status, disability, age, sexuality, and — in most jurisdictions — the source of a person’s lawful income. That last one catches a lot of landlords by surprise.

Write down why

Record the reason you chose the applicant you chose, in one line, at the time you chose them. It disciplines your own thinking, and if a rejected applicant ever raises a complaint, a contemporaneous note about verified income and a positive reference is worth a great deal more than a recollection assembled afterwards.

Then deal with the applications you did not accept. They contain identity documents, income evidence and contact details for people who now have no relationship with you. Australian privacy expectations — and simple decency — say you should not be holding that material a year later because it was easier not to delete it.