Is it just about annual income? A thorough explanation of what you need to know to pass the rental application screening

First of all, what is a rental screening?

When signing a lease for a property, a tenant screening will be conducted by the landlord or property management company.

A tenant screening is an examination conducted by a landlord to determine whether a tenant is suitable for renting out the property they own.

Also, if you use a rent guarantee company, you will also need to be screened by the rent guarantee company.

The main purpose of tenant screening is to check whether there is any risk of the tenant failing to pay rent after the property is rented out, and whether they will cause any trouble while occupying the property.

Rent is an important source of income for landlords, so it is important to assess a tenant's ability to pay before they move in.

There are five factors that determine ability to repay:

• age
• Occupation
• Marital status
• Stability of the workplace (length of employment)
• Rent is less than 1/3 of your monthly take-home pay

First, compare the above items with your own situation and choose a property that meets the criteria that will make it as easy as possible to pass the screening.

Also, since there are other residents in apartments and condominiums, landlords also look to see if the tenant is of a personality that will not cause trouble with other residents.

During viewings and the contract process, you will have the opportunity to speak with the rental agency and landlord, so be sure to be polite in these situations as well.

Documents required for rental application

Various documents are required for the rental application process, which can be divided into three main categories:

• Tenant documents
• Identification documents
• Proof of income

I will explain what each document is in turn.

Tenant documents

First, you will need to fill out and submit an application form as your tenant documents.

In the application form, please provide the following information:

Personal information	・Gender・Date of birth・Address・Telephone number・Annual income・Years of employment at current workplace
Workplace information	・Company name, address, telephone number, industry, number of employees, capital

If you are living with your family, you will also need to fill in the names, ages, workplaces, and schools of the other tenants.

In addition, if you provide a personal guarantor, you will also need the following information about the guarantor:

Guarantor information	Name, gender, date of birth, phone number, relationship to the resident, annual income, years of employment at current workplace
Guarantor's workplace information	・Company name, address, telephone number, industry, number of employees, capital

After you submit the application form with the above information to the real estate agency, the rental property screening process will begin.

Identification documents

Generally, you will be asked to submit identification documents at the time of application, but in some cases you may be asked to submit them again during the application process.

Basically, you will need to submit the following documents:

Identification documents	・Driver's license ・Insurance card ・Passport ・My Number card ・Residence card
Other required documents	・Resident card and seal certificate

If you provide a guarantor, you may be asked to submit the following documents from the guarantor:

• Identification documents
• Proof of income
• Resident card
• Seal certificate

Also, when copying your My Number card, be sure to cover the personal number with a sticky note or something before copying it.

Proof of income

Finally, you will need to provide documentation to prove your income.

Generally, you will submit one of the following three documents:

• Withholding tax slip
• Tax certificate
• Final tax return (for self-employed/freelance)

Also, although it is not a document, a seal is also required, so don't forget it.

Tenant screening schedule

The screening process generally takes about 3 to 7 days.

The main flow is as follows:

• Submit necessary documents to landlord (1 day)
• Document verification and contact with relevant parties (1-3 days)
• Final review and result notification (1-3 days)

There are five main reasons why a flight may be delayed beyond the above schedule:

• There is a problem with the submitted documents
• I can't contact you
• Busy moving season
• The landlord lives far away
• The landlord is not familiar with the screening process

Also, the guarantor will be contacted for confirmation during the rental application process, so in order to ensure the application process goes smoothly, be sure to let the guarantor know in advance that they will be contacted.

Please be aware that if you are unable to contact your guarantor, there is a high possibility that your application will be delayed.

Reasons for not passing the screening other than annual salary

As mentioned above, just because your annual income is higher than the standard does not necessarily mean you will pass the rental screening.

In fact, we have heard reports of people with stable annual incomes failing the rental screening for properties where the rent is less than one-third of their monthly income.

Next, we will explain the following three items that are reviewed other than annual salary.

• Tenant's personality
• Ability to pay
• Guarantor

Tenant's personality

The tenant screening also looks at the tenant's personality.

In the case of apartments and condominiums, landlords have an obligation to provide an environment in which residents can live comfortably, so they need to deal with any problems that arise between tenants.

For this reason, we check in advance whether the applicant is someone who will not cause trouble during the tenant screening process.

When talking to landlords or rental agents, be careful not to give a negative impression by being overbearing, violent, using abusive language, or showing a lack of cleanliness, as this could result in you failing the screening.

Ability to pay

Many people worry about the rental application process being judged as not being able to repay.

Besides annual income, there are two other factors that may result in your application being rejected:

• Job security
• Have a history of defaulting on credit cards

When applying for a rental property, your ability to repay is mainly determined based on the rent being 1/3 of your monthly income, but other than that, being a civil servant or an employee of a large company with a high level of job stability will also be an advantage in the screening process.

Of course, even if you are an employee of a small or medium-sized company, there is no problem as long as your income is stable.

In addition, your credit card default history will also be used to judge your ability to repay, so be sure to check whether you have a history of defaulting on payments in the past.

Guarantor

The tenant's personality and income are the most important factors, but there are also cases where the guarantor can be a hindrance to the screening.

There are two main cases:

• Unable to get cooperation from a guarantor
• The guarantor has a low income

First of all, if you are asking for a guarantor, make sure to ask a family member who is easy to cooperate with and has as stable an income as possible.

Also, if you are unable to get the cooperation of a guarantor or your ability to repay is not recognized, check with the real estate company to see if you can pass the screening by using a rent guarantee company.

For more information on guarantors for rental contracts, please refer to the following article:

It's okay if you don't have a guarantor! Explanation of rental contracts for people without a guarantor

Key points to pass the rental screening

So far, we have explained in detail about the rental property screening process, but some people may not know what they need to do to actually pass the screening.

Below are five points to keep in mind when applying for a property:

• Rent is 20% to 30% of income
• Ask a family member with a stable income to be your guarantor
• Make a good impression on real estate agents and landlords
• Do not make false statements on your application form
• Be careful with incoming calls

Rent is 20% to 30% of income

First of all, properties with rent that is significantly higher than your income will not pass the rental screening.

Check your take-home pay and set rent that you can afford on an ongoing basis.

The average rent is said to be 20% to 30% of your monthly salary. This should be based on your annual take-home pay excluding bonuses.

In addition, civil servants and full-time employees of large companies are generally more likely to pass the screening, and those with longer years of service are more highly evaluated.

However, even if you lose your job, you may be able to get approved if you have savings of about 1-2 years' rent.

If you were working until last year, you may be asked to submit copies of your tax withholding slip and tax return from the previous year, so be sure to prepare these documents as well.

Ask a family member with a stable income to be your guarantor

The guarantor should preferably be a family member who is close to you and is not yet retired.

Please note that even if an elderly person living on a pension has a stable income, they may be deemed to have no ability to provide guarantees.

Also, be sure to explain to your guarantor in advance that they will have to pay the rent on your behalf if you are unable to do so.

Make a good impression on real estate agents and landlords

Your personality and attitude will be evaluated throughout the series of actions you take from the first phone call to your application.

Landlords are often given documents such as "reference materials regarding tenancy qualifications" prepared by real estate companies, which contain a description of the personality of potential tenants.

You don't have to force yourself to smile to make a good impression, but you should be careful not to make excessive demands or behave in an unreasonable manner.

Also, please make sure to dress neatly and use proper language.

Do not make false statements on your application form

The application form for tenancy usually contains a clause such as, "If any false information is provided, you will not object if the lease is terminated."

When signing a lease agreement, you may be asked to provide proof of income, and the information provided may be verified to ensure it is not false.

If the information is found to be false, the rental contract will not be able to be concluded, so obviously, be sure to submit correct information and documents.

Be careful with incoming calls

Some people may normally not answer calls from unknown numbers, but if you ignore calls from real estate companies, your rental application process will be delayed.

In the worst case scenario, your application may not pass the screening.

Therefore, be sure to answer any phone calls you receive, even during the review period.

Also, if you are unable to answer the phone due to work or family commitments, please be sure to call back.

What to do if you fail the rental application

So far, we have introduced information to help you pass the screening, but unfortunately there are cases where you do not pass the screening.

In such a situation, what should you do?

Here are three ways to cope if you are not approved for admission.

Find your next property

Generally, they won't tell you the reason why you didn't pass the screening.

However, if you have an idea as to why you were rejected, you can explain the situation and ask the real estate company to introduce you to properties that are more likely to pass.

Also, you may be able to pass the screening without any problems for another property, so try changing the rent or property conditions and looking for another property.

Change insurance company

It is said that 80% of real estate companies ask guarantor companies that have strict screening procedures for their first loan.

Therefore, you may be able to pass the screening by changing guarantor companies.

If you start looking for a new rental property at a different real estate agency, be sure to tell them the guarantor company you used the first time to ensure that the rental screening goes smoothly.

Make a representation contract

There may be cases where there are no other suitable properties and even if you try changing guarantor companies, you still won't pass the screening.

In such cases, you may want to consider having a relative within the second degree of kinship who has a stable annual income sign the contract on your behalf.

The person signing the lease on your behalf will be a relative, but there will be no problem as long as that person is able to pay the rent properly.

summary

This time, we introduced the details of the rental property application screening and the conditions for passing the screening.

After viewing the property, you will be asked to submit a rental contract and undergo a tenant screening process.

Therefore, please use this article as a reference for any items that can be prepared by then.

Also, while many people consider the rent to be their top priority in order to pass the rental screening, the most important thing when renting is how comfortable the property is to live in.

The following article provides a clear explanation of how to choose a rental property that you won't regret, so please take a look at it.

A must-see for women! How to choose a rental property for single living! We also explain the points you should look out for.

If you are worried about signing a rental contract for the first time on your own, be sure to ask a friend or family member for advice.