For first-time renters with no rental history, seeking a place to live brings excitement tempered by a degree of apprehension. If you are looking to sign a lease for the very first time, realize that you are not alone. Many others have navigated the process, and so can you.
There are understandable reasons for no rental history. For example, you might be transitioning from living with family after landing a great job in a new area. Perhaps you stayed with family for a time to build up your savings. Maybe you are a recent graduate relocating to begin your career. Or, you might be a graduate student needing new housing in a new city.
What do landlords look for when first-time renters apply? Understandably, they want to lower the risk of nonpayment or issues with tenant behavior. To minimize such concerns, look for ways to demonstrate your financial stability and your character.
7 Tips for Getting Approved Without a Rental History
While a lack of a rental history might seem like an obstacle, it can often be overcome. Don’t let it stop you from finding a new home that meets your needs and desires. This post will empower you to navigate the rental process with confidence.
There are clear, achievable steps to present yourself as a trustworthy, reliable applicant.
1. Confirm employment
Whenever possible, have your employer(s) confirm your position, current pay, and months or years worked there. The letter should be on an official letterhead, including the employer’s name, address, and phone number. Such correspondence is typically signed by someone in human resources (HR) or finance.
If appropriate, a statement like, “We do not anticipate any layoffs in the foreseeable future,” is also helpful. If some of your income is due to overtime, the letter should address the prospects for future overtime.
Self-employed individuals might seek reference letters from clients and business associates.
2. Establish adequate income
Provide evidence of your financial stability. Be ready to show recent pay stubs and a current employment contract, if applicable. For self-employed individuals, recent tax returns establish self-employment income, particularly Schedule SE. Recent bank statements provide a snapshot of your most recent income levels.
Rent should not consume too much of your monthly gross income. In most areas, 28-33% is a common range. The percentage may be higher in certain larger cities like Los Angeles, Miami, and New York City.
3. Add a cosigner
A cosigner assumes responsibility for rent payments if the tenant does not make them. A cosigner is often a family member or close friend with a good credit score and strong finances. If you are applying in person, bring your cosigner along, if possible.
4. Work with a professional guarantor
If you don’t meet a landlord’s standard screening criteria, a professional guarantor service might be an option. For a fee, such businesses guarantee rental payments. Clients include “students with no credit history, international renters new to the country, freelancers or gig workers with fluctuating income.” Read the fine print, as there are eligibility requirements and policy limitations.
5. In rare instances, increase the upfront payment
This is a strategy that is useful only with certain smaller, private landlords. For most lessors, the amount of the security deposit and the monthly rent is non-negotiable. A regular income sufficient to pay rent and other recurring expenses is most important.
6. Offer references to certain smaller landlords
In today’s residential real estate market, most landlords do not look at references. However, references may be of value when dealing with an occasional private landlord. Again, meeting the income requirement is key.
If references are relevant, consider approaching those who know you well enough to speak to your character and trustworthiness. Examples include professors, former bosses, coworkers, and long-time friends. If you are a student or a recent graduate, most academic institutions are willing to confirm your academic standing in writing.
7. Detail your personal situation
First impressions count. An apartment tour offers a natural opportunity to come across in a positive way. An in-person conversation with a landlord or representative offers an opportunity to exhibit trustworthiness. As an alternative, consider submitting a letter that explains your personal situation. Cite your career and other goals for the next couple of years. Demonstrate that the particular landlord-tenant relationship would be a good fit for both parties.
Those with no rental history may want to show proof of timely utility bills and cell phone payments. Credit card payment histories will appear on your credit report.
Additional Strategies
During the rental process, make your application stand out by highlighting your strengths. Note any recent promotions or pay raises, for example. Note any past rental arrangement, even if it consisted of informally paying rent to a family member. Highlight other aspects of your life that reflect well on your character. Charitable work is but one example.
Start your apartment search early. Ideally, time your quest to coincide with slower times of the year, like the winter season. At these times, competition for housing may be less intense. Consider tips for a smooth rental application process here. Don’t get discouraged if an application is not approved. Apply what you learn the next time around.
If you encounter obstacles when seeking an apartment lease, consider these strategies:
- Rent with a roommate, ideally, one with a stable rental history and a good credit score. A roommate means an additional source for rent payments, a plus from a landlord’s perspective.
- Start with a sublet or short-term rental to establish a brief rental history. This builds a foundation for a long-term lease in the future.
About Draper and Kramer
Draper and Kramer is a full-service real estate firm founded in 1893. D&K manages luxury apartment properties in Illinois, Texas, Arizona, Missouri, and Colorado. Some of our newer developments include The Wright and Tempo Nine Mile in Greater Denver, Moda at the Hill in St. Louis, and Wrigleyville Lofts in Chicago. Browse our complete selection of luxury apartment communities here.
