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A rental application is a form used by landlords to evaluate potential tenants for a rental unit, gathering detailed personal information and often granting consent for background checks and consumer reports. The video discusses the importance of rental applications for landlords, what should be included in them, associated fees, and red flags tenants should be aware of. It emphasizes that rental applications not only gather data for credit and background checks but also help filter out less serious applicants, providing landlords with confidence that the applicant can consistently afford the rent. A template for a rental application is available in the video's description.