Author Topic: Landlords & Ladies: What are your background/credit requirements for tenants?  (Read 1771 times)

Stachetastic

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I've got several good applicants (and a few not so good) for a property I have available, and it seems they all have something that causes concern, but not necessarily a glaring red flag. Many issues are more than 5 years old. How far back do you go?

Note: In my LCOL area, it is always cheaper to buy than rent, so people with squeaky clean credit typically go that route.

Current examples:

One applicant has a judgement against her from 5 years ago for $600 and 2 misdemeanors from 2 years ago.

Another couple has a bankruptcy from 2009 (her) and an assault from 1994 (him)

A third couple has an eviction filing from this year and a judgement from last year for utilities for $1300--BOTH DISMISSED

Fourth couple has four total judgements against them including a car dealership, medical, and maybe a payday loan place? Most recent is 2009.

Cwadda

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I'm going to rank the prospects from best to worst, the situations you laid out.

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1. One applicant has a judgement against her from 5 years ago for $600 and 2 misdemeanors from 2 years ago.
No big deal IMO.

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Another couple has a bankruptcy from 2009 (her) and an assault from 1994 (him)
I feel like bankruptcy holds a more negative connotation than it should.  Donald Trump deliberately declared bankruptcy a number of times to re-negotiate debt owed to the bank. I mean, the guy is slimy, but it worked to his advantage.

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Fourth couple has four total judgements against them including a car dealership, medical, and maybe a payday loan place? Most recent is 2009.
Not good. A tenant will always pay these things before paying you rent. To the tenant, these are way more important.

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A third couple has an eviction filing from this year and a judgement from last year for utilities for $1300--BOTH DISMISSED
Eviction filed?  Instant disqualification.

Another Reader

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Lower your rent to attract better qualified tenants.  Use a minimum credit score, no exceptions.  That will likely disqualify most if not all of these applicants.  The first applicant is the only one to consider, and that's if the credit score is above the acceptable minimum, say 625.

Stachetastic

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Thanks for the input!

To clarify: Applicant 1's misdemeanors from 2015--Menacing and Drug Abuse. Still no biggie?

Cwadda

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Lower your rent to attract better qualified tenants.  Use a minimum credit score, no exceptions.  That will likely disqualify most if not all of these applicants.  The first applicant is the only one to consider, and that's if the credit score is above the acceptable minimum, say 625.

Honestly, credit is low on my priority list.  Why?  Because it's very easy to screw up your credit, and takes ages to build back up again.  People turn around, much faster than credit scores lead you to believe. 

Just my opinion.  I tend to look for 650+ but if it's on the fringe it's not a deal breaker for me.

Cwadda

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Thanks for the input!

To clarify: Applicant 1's misdemeanors from 2015--Menacing and Drug Abuse. Still no biggie?

I'm not even sure what Menacing is. Drug Abuse depends.  I'm fine with marijuana, it's not legalized in my state but it IS decriminalized.  But don't sell marijuana out of the house, for pete's sake.  Absolutely no hard drugs.  If the abuse was for marijuana, I'd be fine with it.

MommyCake

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I think Menacing means threatening physical harm.  I would stay away from this person. 

tralfamadorian

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One applicant has a judgement against her from 5 years ago for $600 and 2 misdemeanors from 2 years ago.

Another couple has a bankruptcy from 2009 (her) and an assault from 1994 (him)

A third couple has an eviction filing from this year and a judgement from last year for utilities for $1300--BOTH DISMISSED

Fourth couple has four total judgements against them including a car dealership, medical, and maybe a payday loan place? Most recent is 2009.

1) Upon hearing the additional details that the misdemeanors are relatively recent and related to drugs and physical violence.  NOPE.
2) Nope.
3) NOPE. Dismissed probably means cash for keys- RUN!
4) NOPE.

#2 is probably the best of the bunch. Other may not hold the assault from 20+ years ago against him but I want to always be comfortable going to my houses; I wouldn't feel comfortable going alone to my house if the tenant has a history of violence.   

Personally I don't have an issue with weed but if someone was involved with it enough to be arrested, they were/are probably selling it and at minimum will be smoking in your house. 

+1 Another Reader's recommendation.  Lower the price and find a tenant that you don't have to make any judgement calls above or bend your criteria.  Sometimes a small change in price can make a big difference regarding the tenant pool you attract. 

Stachetastic

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We went with applicant #2. Upon further investigation, we realized the assault charge from 23 years ago had been dismissed. Employer checks came back with glowing recs, and I know two people who work in the same company as the wife, where she has been employed for over 20 years.

As for lowering the rent, we are asking $800 (we pay sewer and sanitation) and have had 45+ inquiries. We scheduled 25 showings this week, and had about a dozen or so show up. We ran into another local landlord last night who owns 10 or so properties, and he shared the sentiment that people in our area with outstanding credit/backgrounds are buying. We previously had this property advertised a few months ago for $750 (tenant pays all utilities), but every single applicant was unqualified. We knew several of the interested parties who would have been more than qualified, but they all passed on it. So we took a few months and made some more updates: new flooring, 9 new windows, some plaster repair. While we raised the asking rent, we are now paying the sewer/sanitation (which is charged against the property taxes if unpaid, so many landlords round here include it with rent). So it comes out to be a very similar deal for the tenant. We are definitely seeing a higher caliber applicant this time around, so I feel like our asking price is on target.
« Last Edit: September 22, 2017, 08:49:40 AM by Stachetastic »

 

Wow, a phone plan for fifteen bucks!