Finding a new place to live can be both exciting and daunting at the same time. On the one hand, there is the joy of finding a new space where you can see yourself living in the long run – but on the other hand, you do not want to get your hopes up, just in case your application gets rejected. We have had a look at the general administration process, to see how one can better prepare oneself for the application process – even if you already know that you have a bad credit rating.
It is important to put yourself in your landlord’s shoes. They are probably just as excited as you are about the prospect of finding the right tenant for their property. Whilst this might make them more lenient during the application process, there is no landlord that is willing to take on the risk of a tenant that will be unreliable during the monthly payment process. Try your utmost to provide them with reasons not to be concerned about your credit record. The first step would be to provide them with a certified copy of your identity book/card – just to prove that you are who you say you are.
General rule-of-thumb is that your Net earnings need to be three times the rental amount for which you are applying. When purchasing a property, the banks will consider your gross salary for affordability. In order to prove this, you will need to submit the latest three months’ bank statements that clearly indicate your salary being paid into this account. This should be accompanied with your latest three months’ salary slips. You can also expect your future landlord’s rental administrators to contact your employer to verify that you are still working at that company. This will go hand-in-hand with your ‘proof of employment’ letter that should be on an official company letterhead with all their contact details on it. A certified ‘proof of your current address’ should accompany your application, and if you are renting from another landlord, provide their details so that your new landlord’s rental administrators can touch base with them to see what type of tenant you are.
The landlord’s rental administrator will also consider your monthly expenses from your bank statements. They need to ensure that you have disposable income, after the monthly rental has been deducted in order to qualify from an affordability point-of-view. If you do not qualify on your monthly salary alone, you will need to show any other additional income that you might be receiving, like commissions or rental income that you might be receiving from other properties – just to boost your overall monthly income amount. You could also consider getting someone close to you, like a family member or your company where you work, to sign surety for your lease agreement. This means that if you default on your payments, they will be personally liable to make that payment on your behalf. All of these measures will reassure your future landlord that you are a viable prospect to move into their property, as your risk on defaulting is low. Obviously, it would also help if you can show a flawless record of paying your current landlord on time.
If the above measures still do not give you the ‘all clear’ on your application for the property, you might need to consider negotiating with your landlord. In order for them to have reassurance that you will pay your monthly instalments, they might be open to the idea of you paying a double deposit. It is the industry norm to pay a deposit equal to one months’ rental as an assurance to your landlord that you are not going to damage the property, or default on your monthly payments. This means that they can deduct any monies from the deposit that you pay at the beginning of your lease, and if you have not defaulted or damaged the property, you ought to get that deposit back at the end of the lease term. When paying a double deposit, it would mean that the landlord will have access to more money, as insurance that you do not intend to default on your financial commitment to them. Very few people have access to this kind of money, and it might be worth negotiating a payment plan with your future landlord, whereby you pay small amounts on a monthly basis, until you have built-up a second deposit that they can tap into, if need be.
It goes without saying that one can easily be offended when your application is rejected. By planning your submission carefully and highlighting the areas of concern, you might be afforded the opportunity to negotiate a way around your official credit rating. It is important to remember that the landlord might be as excited as you are to have you as a tenant, but they do have to keep the risks in mind when considering if they will proceed with a lease. This is one of the instances where honesty really seems to be the best policy.