Prospective Tenant

What Is a Prospective Tenant and How to Become an Actual Tenant

Definition of Prospective Tenant
What Is a Prospective Tenant?. Altrendo Images/Altrendo/Getty Images

Definition of Prospective Tenant:

A prospective tenant is an individual who has shown interest in the vacancy at your rental property. He or she may have called about your property, may have come to view your property or may have even filled out an application to rent your property.

Until you have approved the individual through your tenant screening process and he or she has actually signed a lease agreement and paid rent, they are not considered a tenant.

Up until that point they are prospective, or potential, tenants.

Difference Between Prospective Tenant and Actual Tenant:

Prospective Tenant:

  • Called About the Property
  • Viewed the Property
  • Filled Out an Application to Rent the Property
  • Is Undergoing Your Tenant Screening Process

 

Actual Tenant:

  • Has Been Approved Through Your Tenant Screening Process
  • Has Signed a Lease or Rental Agreement
  • Has Paid Security Deposit and Rent
  • Is Currently Residing in Your Rental Property

 

Steps to Become an Actual Tenant:

  • Inquire About Viewing the Property

​The potential tenant will contact the landlord about the vacancy at the property. The landlord may pre-screen the tenant over the phone to determine if the individual will continue in the next step of the process. Here are 10 Questions to Ask Prospective Tenants.

At every point in the screening process, the landlord must treat all prospective tenants equally. This can be done by having the same qualifying standards for all potential tenants.

In addition, you must follow the Fair Housing Act.  This act prevents you from discriminating against tenants based on factors such as race, religion or five other categories. 

  • View the Property

The next step is for the prospective tenant to schedule an appointment and actually view the property.

  • Fill Out Rental Application

    ​If the tenant likes what he or she sees during the viewing of the rental, then he or she can fill out a rental application. This application will include basic information about the tenant, such as full name, yearly income, employment history, number of people that will be living in the apartment and current and previous addresses. 

    • Consent to Background and Credit Check

    ​The rental application will often include an area where the tenant agrees to having a background or credit check conducted. 

    • Pass Background and Credit Check

    ​The information on the tenant's rental application will be verified. If any red flags are discovered during this screening process, the landlord can discuss the issues with the applicant. 

    • Sign Lease Agreement With Landlord

    ​If everything checks out to the landlord's satisfaction, then the tenant has the option of signing a lease to rent the property. The lease term can vary from weekly, monthly or yearly and will be agreed on by both landlord and tenant.

    • Pay Security Deposit and First Month's Rent

    Before moving into the rental, the tenant must pay the security deposit as well as the first month's rent. The amount of the security deposit may be set by a statewide limit.

     

    • Move Into Rental

    ​Finally, the applicant can move into the rental. The individual goes from being a prospective tenant to being an actual tenant.

     

    Example of a Prospective Tenant:

    Mike is a landlord with a vacancy at his rental property. He places an ad for the vacancy online. Shelia sees the ad and calls to inquire about the property. She sets up a viewing to see the property on Saturday. Shelia would be considered a prospective tenant.