Ask Lucas

Ask Lucas 012: Are Online Rental Applications More Secure than Paper Applications?


In this episode, Cynthia asks about Cozy and is concerned about online security. She is also wondering if she needs to collect paper applications when using Cozy.

Full Transcript:

Lucas Hall: Hey, everyone. This is Lucas Hall from Landlordology and Cozy. Welcome to the 12th episode of “Ask Lucas,” a bite-sized Q & A show where I answer your questions about landlording and property management. The way this works is very simple. You can leave a recorded question on, and I’ll answer it in this podcast.

Today’s question is from Cynthia, but first, I want to tell you a little bit about Cozy. Cozy is an online tool designed specifically for landlords like you and me. I think it’s the best way for an independent landlord to accept rental applications, screen their tenants, order credit reports, and then automatically collect their rent online. That last part’s really key because automation personally has changed my life and the way I do rentals.

I use Cozy to self manage all my properties, and I highly recommend it. Get Cozy at, and now let’s hear what Cynthia has to say.

Cynthia: Hi, Lucas. It’s Cynthia. I’m a new landlord. My son is moving out of our property. I’m going to use Cozy, but I’m worried that maybe people won’t feel that it’s a place they feel comfortable, so am I going to have to have paper along with sending them to Cozy to apply? Thank you.

Lucas Hall: Hey, Cynthia. Thanks for your question. That’s really great that you’re getting ready to turn your property into a rental property, and congratulations on that. Yes, Cozy is very different from the normal application process and even different from a lot of other property management softwares out there.

This is not intended to be a Cozy commercial. Landlordology is owned and operated by Cozy, and it’s just a resource that we created to give back to the community in which we belong, but to answer your question, when you fill out a property with Cozy, you get a little application link, and so that link is a unique URL that is tied to that property, and then you can either email that link to a tenant, or you can share it on a social media network like Facebook or Twitter.

You can basically tell the tenant, “Fill this out, and then I’ll get your application“, it’s so incredibly simple and all the applications for that property get dumped into one dashboard so that you can view them against each other and see which might be the best tenant and even view the total income for a group to see how that compares and what those ratios are.

It’s very useful, but as far as not feeling comfortable with filling out the application, I would question what specifically are they dealing with or what are you concerned about? For example, the things that I can think of is maybe a tenant might not want to fill out an online application, thinking that, “I’m not really sure who this is going to,” and “Is it secure?” And “What kind of data do they ask for? Do I really want to give them all that information?” All of these are valid concerns and for the tech-savvy user, rightfully so.

Tenants and landlords should be concerned about identify theft and what people are doing with their information, so what you can tell them is that Cozy has bank level security, and we encrypt everything. The rental application goes straight through a secure connection to your dashboard, and you’re the only person that’s going to be able to see it.

Even so, the rental application does not ask for a Social Security number, and Cozy does that on purpose. Identify theft is at a all-time high. It’s 2014, and it’s the Number One crime in America, and contrary to popular belief, the Social Security number is not needed to screen your tenants, and the reason for this is because all the major credit bureaus have, in fact, changed their methods of collecting to reduce identify theft, and they don’t require a landlord to actually input their Social Security numbers.

The only companies that do require a Social Security number to screen a tenant are third-party screening companies that require you to then fax that information over to them, and the reason they need it is because they have no legitimate business in the property. They’re just a hired help, and they’re not the owner not the tenant, and so the credit agencies and credit bureaus have gotten around this by setting up systems, which Cozy uses. Actually, Cozy flag-shipped the technology with Experian to make this happen.

You can tell them all this, but it still may not alleviate their concerns, so what I would do is ask them to fill our an application after they view the property and after they really do express that they are interested and they want the place. Yes, you can send them the link beforehand, and then they can fill it out before they even get there to hopefully pre-qualify them, but they don’t know who you are at that point.

After they view the property, they’ve met you once or twice, and they’re comfortable that you, in fact, own the property, and that you do really have a place to rent that they can take. That mitigates a lot of their concern and by that point, the online application is just a minor concern. Try to solve it from a lot of standpoints. It’s not just the application that’s the issue. It’s really the big picture and whether or not you’re a fraudster.

I hope that answered that question. The last one you had was just about keeping paper applications or paper documents in coordination with what you do on Cozy and so, Cozy lets you collect online rental applications, screen those tenants and then, in fact, collect your rent online, and so anything that has to do with that aspect of it doesn’t have to be on paper, and you don’t have to track it.

Now, a lot of landlords still want to do paper leases and have this physically signed. I think that’s a great idea. I actually use a lot of documents, signing tools online to get my leases signed, which is just as legitimate, but I understand that some people want a physical signature, and I actually encourage people to meet with their tenants as you sign the lease, just to reinforce the clauses that are in the lease and then sign it there to try to give it that sensation and that emotion of legitimacy that goes along with the contract.

You might have a paper lease, and you might have paper notices that, if you choose to send out physical notices to somebody saying that you’re going to show up later, tomorrow to fix the sink or something, but all of those documents, you can digitize and send them to the tenant in an email or keep online at various document management sites.

I know Cozy’s working on a product where they’re actually going to let you upload documents and be able to share that with the tenant in the dashboard, so when that gets launched, you’ll have that option as well.

No, you don’t need keep paper rental applications, and you don’t need to keep anything related to that tenant screening capability because even if you do order credit reports, they’ll be in Cozy.

I hope that really helps you and good luck with this next situation, and I know Cozy has a great customer support team, so if you have any questions along the way, feel free to give them a shout. Thanks again. Bye.

About Lucas Hall

Lucas is the Chief Landlordologist at Cozy. He has been a successful landlord for over 10 years, with dozens of happy tenants and a profitable income property portfolio.
Read more about Lucas's story.