How to Handle Multiple Applications for One Rental Unit: A Landlord's Fair Selection Guide

By PropsManager Team · Tenant Screening · Jun 20, 2024

You listed your two-bedroom on a Thursday afternoon. By Saturday morning, you've got 14 applications sitting in your inbox. Feels great, right?

Until it doesn't.

Because now you've got to pick one person and tell thirteen others "no." And if you do it wrong—even accidentally—you could be staring down a Fair Housing complaint that costs you $16,000 in legal fees before you even get to a hearing. I've seen it happen to a landlord in Phoenix over a $1,200/month unit. The legal bill was more than a full year of rent.

The reality is that handling multiple applications is one of the highest-risk moments in the entire landlord-tenant relationship. It's where discrimination claims are born, where good landlords make expensive mistakes, and where having a rock-solid system separates the professionals from the amateurs.

Let's break down exactly how to do this right.

Why Multiple Applications Are Both a Blessing and a Minefield

A vacancy costs the average landlord between $1,500 and $3,000 per month when you factor in lost rent, continued mortgage payments, utilities, and marketing costs. So getting a stack of applications? That means your listing did its job. Your rental listing description attracted interest, and your pricing hit the sweet spot.

But here's where things get uncomfortable fast.

Every time you choose Applicant A over Applicant B, you're making a decision that could be scrutinized under the Fair Housing Act. The seven federally protected classes—race, color, national origin, religion, sex, familial status, and disability—are just the floor. Many states and cities add protections for source of income, sexual orientation, gender identity, age, marital status, and even criminal history.

In 2023, HUD reported over 33,000 Fair Housing complaints nationwide. Roughly 56% of those involved rental transactions. And the single most common trigger? The applicant selection process.

So yeah. Multiple applications are great for your bottom line. They're also the moment where you need to be most careful.

The Three Main Approaches to Selecting a Tenant

There are really only three strategies landlords use when multiple applications come in at once. Each has trade-offs. Let me walk you through them honestly.

Approach 1: First-Come, First-Served (The Safest Route)

This is the method I recommend to every landlord who asks me. Simple: you process applications in the order they're received. If Applicant #1 meets every single one of your pre-established criteria—credit score, income verification, rental history, background check—they get the unit. Full stop.

You don't peek at Applicant #2 to see if they're "better." You don't hold off because someone told you they've got a friend who'd be "perfect." You run the first application through your criteria, and if it passes, you stop.

Why this works: It's nearly bulletproof against discrimination claims. You can demonstrate a clear, objective, chronological process. "We approved the first qualified applicant" is about as clean a defense as you'll ever have.

The downside: Sometimes Applicant #3 has an 800 credit score, makes $120,000 a year, and has a spotless 10-year rental history. And you already approved Applicant #1 who just barely cleared your minimums. That stings a little. I get it.

But you know what stings more? A $50,000 discrimination settlement because you can't explain why you passed on Applicant #1 (a single mother) to wait for Applicant #3 (a young professional with no kids).

First-come, first-served. Every time.

Approach 2: Best-Qualified Selection (Higher Risk, Higher Reward)

Some landlords prefer to collect all applications over a defined window—say 72 hours or one week—then evaluate everyone at once and pick the strongest candidate. On paper, it sounds logical. In practice, it's a legal tightrope.

Here's why. When you're comparing applicants side-by-side, subjectivity creeps in. Applicant A has a 720 credit score and makes 3.2x rent. Applicant B has a 690 credit score but makes 4x rent. Who's "better"? The answer depends on which metric you weight more heavily—and if your weighting conveniently happens to favor the applicant who doesn't belong to a protected class, you've got a problem.

If you insist on this method, you absolutely need:

• Written, pre-established scoring criteria (not created after you see the applicants)
• A points-based system with specific weights for each factor
• Documentation of every score for every applicant
• A consistent application of those criteria across every vacancy, every time

Some larger property management companies do use weighted scoring systems effectively. But for a landlord managing 5, 10, or even 20 units? The administrative burden usually isn't worth the marginal benefit of picking a slightly "better" tenant.

Approach 3: Lottery or Random Selection (Rare but Legal)

A handful of landlords in extremely competitive markets—think San Francisco, New York, parts of Seattle—use a randomized selection after qualifying all applicants. Everyone who meets the minimum criteria goes into a pool, and the winner is drawn randomly.

It's fair. It's defensible. And it's extremely uncommon because most landlords (understandably) want some control over who lives in their property.

I mention it mostly for completeness. If you're managing affordable housing or have specific local regulations requiring randomized selection, this might be required. Otherwise, stick with first-come, first-served.

Building Your Written Qualification Criteria

This is the foundation of everything. Without written criteria established before you receive a single application, you're essentially making it up as you go—and that's exactly what a Fair Housing investigator will assume.

Your criteria should include specific, measurable standards:

Income Requirements

The industry standard is 3x monthly rent in gross income. Some landlords in high-cost markets drop this to 2.5x. Whatever you choose, it needs to be the same for every applicant, every unit, every time.

For a unit renting at $1,800/month, that means a minimum gross income of $5,400/month, or $64,800 annually. Document whether you accept combined income from co-applicants, how you handle self-employment income, and whether you count non-wage sources like child support or Social Security.

Credit Score Minimums

Set a hard floor. Common thresholds:

Be careful here: some jurisdictions restrict the use of credit scores in tenant selection, particularly for Section 8 or subsidized housing applicants. Check your local laws. If you're interested in working with voucher holders, our guide on Section 8 housing for private landlords covers the specifics.

Rental History

How many years of prior rental history do you require? Two years is standard. What constitutes a disqualifying mark? Late payments, eviction filings, property damage, lease violations?

Be specific. "Good rental history" isn't a standard—it's an opinion. "No eviction filings in the past five years and no more than two late payments in the past 24 months" is a standard.

Background Checks

Criminal background screening is becoming increasingly regulated. HUD guidance since 2016 has warned that blanket bans on applicants with criminal records can violate Fair Housing if they have a disparate impact on protected classes. Many states now have "ban the box" laws or fair chance housing ordinances.

Your policy should specify which offenses are relevant, how recent they must be, and whether you allow applicants to provide mitigating circumstances. A 10-year-old misdemeanor for something unrelated to housing is very different from a recent conviction for property destruction.

The Application Process: Step by Step

Here's the exact workflow I recommend for handling multiple applications:

Step 1: Standardize Your Application

Every applicant fills out the same form. Same questions, same required documentation. No exceptions, no "verbal applications," no "my buddy said he's interested." If they don't complete the full application and pay the screening fee, they're not in the running.

Using PropsManager's tenant screening features, you can standardize this entire process digitally—every applicant gets the same form, submissions are timestamped, and nothing falls through the cracks.

Step 2: Timestamp Everything

The moment an application is received, it needs a timestamp. If you're using first-come, first-served (and you should be), this timestamp is your entire legal defense. Email submissions, online portal submissions, and even paper applications should be logged with the exact date and time of receipt.

Step 3: Screen Sequentially

Start with the first application received. Run the credit check. Verify income. Call previous landlords. Check the background report. Confirm employment.

Does this applicant meet every one of your written criteria? If yes, approve them. If no, document exactly which criteria they failed to meet, then move to Applicant #2.

Step 4: Notify All Applicants

This is where a lot of landlords drop the ball. You've approved someone—great. But you've also got 12 other people waiting to hear back. Ghosting applicants isn't just rude; it's a liability.

Anyone whose application was processed and rejected based on information from a credit report or background check is legally entitled to an "Adverse Action Notice" under the Fair Credit Reporting Act (FCRA). This notice must include:

• The name and contact information of the screening company
• A statement that the screening company didn't make the decision
• Notice of the applicant's right to dispute the report
• Notice of their right to a free copy of the report within 60 days

For applicants who weren't processed because the unit was already filled, a simple communication works: "Thank you for your application. The unit has been rented to another applicant." Keep it brief, keep it professional, and keep a copy.

Step 5: Document and Archive

Save everything. The application, the screening reports, your notes, the timestamps, the approval decision, the rejection reasons, the adverse action notices. Keep this documentation for at least three years—some states require five or more.

If a Fair Housing complaint arrives 18 months later, you'll be incredibly glad you have a complete file showing exactly what happened and why.

Common Mistakes Landlords Make (And How to Avoid Them)

Mistake 1: Changing Criteria Mid-Process

You set a minimum credit score of 650. The first three applicants all have scores between 620 and 640. Tempting to lower the bar, right? Don't. If you change your criteria after seeing who applied, you've undermined the entire point of having criteria in the first place.

If your standards are keeping your unit vacant, adjust them for the next listing cycle—not the current one.

Mistake 2: Verbal Promises

"You're basically approved, just waiting on the background check." Never say this. A verbal promise can create a binding agreement in some states, and if you then reject the applicant, you could face a breach of contract claim on top of everything else.

Mistake 3: Asking Prohibited Questions

During showings, applicants will chat. They'll mention their kids, their church, their disability, their country of origin. Do not engage with any of this as it relates to the application. A friendly conversation about someone's family can become Exhibit A in a discrimination complaint.

Stick to: "Here's the application. Here are the criteria. Let me know if you have questions about the process."

Mistake 4: Social Media Screening

Looking up applicants on Facebook or Instagram? Stop. The moment you see that an applicant is pregnant, has a disability, practices a particular religion, or has kids—information you never should have had—you can't un-know it. And if you reject that applicant, the knowledge creates an inference of discrimination.

If you insist on social media checks, have a third party do it and instruct them to report only on housing-relevant information (property damage evidence, etc.) and nothing about protected characteristics.

Handling Bidding Wars: Just Don't

In hot markets, applicants will offer to pay above asking rent, put down extra security deposits, or prepay several months in advance. This feels like winning the lottery.

But accepting above-asking offers creates serious Fair Housing concerns. If you accept $1,500/month from an applicant over $1,400/month from another, you've introduced a wealth-based selection criterion that may have a disparate impact on protected classes. Some jurisdictions—including Oregon and parts of California—explicitly prohibit landlords from considering offers above the listed price.

List your price. Stick to your criteria. Pick the first qualified applicant.

Using Technology to Stay Compliant

Look, managing all of this with spreadsheets and email chains is possible. I did it for years. But it's also how mistakes happen. You forget to timestamp an application. You lose a rejection letter. You can't find the screening report from 2022 when a complaint rolls in during 2024.

Property management software like PropsManager automates the compliance-heavy parts: timestamped applications, standardized forms, automated adverse action notices, and secure document storage. It doesn't make the decisions for you—but it makes sure you can prove how and why you made them.

For landlords managing more than a couple of units, this isn't a luxury. It's a necessity. Check our pricing page to see which plan fits your portfolio.

Special Situations

Co-Applicants and Roommates

When a couple applies together, they're treated as one application. Their combined income counts toward the income requirement. But be careful: you can't reject an application because unmarried partners are applying together. Marital status is protected in many jurisdictions.

Guarantors and Co-Signers

If Applicant #1 doesn't meet your income requirements but has a qualified co-signer, does that count as meeting your criteria? Decide this before you receive applications and put it in writing. For more on this, check out our guide on how to screen co-signers and guarantors.

Transfer Tenants and Internal Applications

If you manage multiple properties, existing tenants requesting transfers can complicate the priority order. Establish a policy: do current tenants get priority over external applicants? Either answer is fine, as long as it's consistent and documented.

Explore More PropsManager Resources

Looking for the right property management software? Check out our in-depth guides:

• Compare Property Management Software — See how PropsManager stacks up against Buildium, AppFolio, Rent Manager, and Propertyware.
• Software for Small Landlords — Built for landlords managing 1–50 units without the enterprise price tag.
• AI-Powered Property Management — Discover how automation can save you 5–10 hours per week.
• Solutions for Property Managers — Scale from 50 to 500+ units without scaling your costs.

Frequently Asked Questions

Can I hold multiple security deposits while deciding between applicants?

Generally, no. Collecting a deposit implies acceptance of the application in most states. Some jurisdictions allow a small "holding deposit" or "application deposit" that's separate from the security deposit, but the rules vary wildly. In California, for instance, you can accept a holding deposit with a written agreement, but you must return it within a set timeframe if you reject the applicant. Check your state's landlord-tenant code before collecting any money beyond the application fee.

What if the first qualified applicant wants to negotiate lease terms?

If Applicant #1 meets all your criteria but then asks for modifications—a shorter lease, permission to paint, an exception to the pet policy—you're under no obligation to agree. You can approve them on your standard terms and give them a deadline to accept. If they decline or don't respond by the deadline, document it and move to Applicant #2. Just make sure you'd offer the same negotiation opportunity to any applicant, regardless of protected characteristics.

How long should I keep applications from rejected tenants?

Keep everything for a minimum of three years. HUD allows Fair Housing complaints to be filed within one year, but some state statutes of limitations extend further. Private lawsuits in federal court can be filed within two years. And in some states, the window is even longer. Five years is a safe bet. Digital storage makes this easy—there's no excuse for tossing files prematurely.

Is it legal to charge an application fee to every applicant?

In most states, yes—but often with restrictions. Application fees must generally be "reasonable" and limited to the actual cost of screening. California caps fees and requires landlords to provide receipts and the screening report. New York banned application fees entirely in 2019 (with a narrow screening exception). Wisconsin, Minnesota, and several other states have their own rules. Never charge an application fee you can't justify with an actual screening expense.

Should I tell applicants how many other applications I've received?

You can, and it's often good practice to set expectations. A simple disclosure—"We've received multiple applications and will process them in the order received"—manages expectations and demonstrates transparency. What you should never disclose is any identifying information about other applicants, their qualifications, or why specific individuals were rejected.

Take the Guesswork Out of Applicant Selection

Handling multiple applications doesn't have to be stressful—or risky. The formula is straightforward: establish written criteria, apply them consistently, process applications in order, document everything, and communicate clearly with every applicant.

The landlords who get into trouble are the ones winging it. The ones who rely on gut feelings, change their standards from one vacancy to the next, and keep sloppy records. Don't be that landlord.

PropsManager was built to help property owners and managers handle exactly these situations. From standardized digital applications to automated screening workflows and compliant record-keeping, it takes the manual work out of staying fair and legal.

Ready to professionalize your applicant selection process? Request a demo and see how PropsManager streamlines everything from the first application to the signed lease.