I have a property that i have an applicant for.
The thing is the following, Husband , wife to be on the lease, brother may visit or maybe not at all.
Husband doesnt really have a ‘fixed’ income but has his own business and is variable, the wife makes more than enough for rent.
As this is my first rental plus Im sort of not getting expected traffic on the property (though its located in a superbly convenient area) im hoping to bite a bit of a bullet and get tenants in.
They are okay with credit checks for both husband and wife, but are not really keen on having the brother on the lease, since its short term.
Secondly they do not want to enter anything for fixed income for the husband but just for the wife.
Lastly I like them because they are only 2 for the most part and they’ll (ab)use less and wear and tear will be somewhat minimized.Maintenance consequently will be reduced. They are a middle aged couple and seem nice enough.
What credit score should I look for?
I am using erenter to check their background, any advice on strategy will help me a great deal.
Any thoughts or pointers will be greatly appreciated.
My advice…Save yourself the money and give up the credit/background checks. Look at all the people with decent scores who have been borrowing money over the last 5 yrs, only to have their properties go into foreclosure down the line. What does a credit check tell you, really??
There are bad people with good scores, and good people with bad scores. That’s the only thing a credit report will ever teach you.
Did you talk to previous landlords? That and monthly income are the most important to me, followed by a background check, I pull credit even on my low income renters, not for the scores, but for previous addresses that might not be listed on the application, those are the landlords that I want to talk to the most.
Welcome to the world of landlording! or is it the land of worldlanding? It is best that you establish your criteria and set it in stone. Mine is simple: rent should not exceed 35% of income. Steady job the more long term the better (new job in the last 3 months is a red flag and needs to be investigated further). Ask to see the most recent check stub (get a copy if you can). A criminal background is an absolute! It is amazing what shows up on “decent looking peoples” file. If you get an excuse for for not providing something they are hiding something. their credit is going to be bad, I look for things that have happened recently (flag!). Things that happened a couple of years ago do not bother me. Establish how things will be run by you from the very moment tenants meet you. This lets them know ground rules for other issues in the future.
You’re not going to get great credit scores. These people are renting for a reason. As mentioned, I’d use it to get previous addresses and talk to previous landlords. However, if you’re talking to the current landlord, be cautious. They may tell you that they’re two of the greatest tenants in the entire world and yada yada yada. Why? BECAUSE THEY WANT THEM OUT! Of course this isn’t always the case, but I’d definitely get more than one landlord reference if possible.
Make sure you verify everything you can. Get the wife’s work number. Look that number up as a reverse phone number search (for free on the internet) and make sure the number is for the place of business she listed on the application. Last thing you want is for her to give you her friend’s phone number and they act like her supervisor.
Another suggestion is to look at your county’s court website. There’s probably a link on there where you can search a pubic information database. You can find all kinds of things on there from simple speeding tickets to assaults/foreclosures/drug charges/etc.
All this stuff is free. John made an excellent point about the credit check. You can at least use the addresses from there.
Have you got your home office inspected where you can actually pull a full credit report or are you just going off erenter to give you a “credit decision?” The credit decision is where they look at the complete file and give you a decision such as “rent only with co-signer or larger deposit.” If you’ve been inspected, you can see their full report so you can make your own decisions.
Remember (as previously stated) they’re renting for a reason…low income, past credit problems precluding them from getting a loan, etc.
I have not registered a business, this is more of a ‘Doing Business As’ sort of situation shall I still get an inspection for the erenter.com criteria? Is there a charge for getting the inspection done(by the city)?
Regarding the other points, I considered the fake office ph number situation but how about if they fake the landlord numbers which are actually friends who give them good references?
There are a lot of different websites listed in threads here regarding tenant screening and credit checks. Search through them. Some services want you to pay $75-100 for a one time inspection. Others are annual or every few years. If you move, you’ll have to get re-inspected.
If you’re worried about imitation landlords (friends), that’s where you can use their previous addresses on the credit reports. You could then look in public records at the court house and find who owns the property at that address.
You need standardized, written criteria for tenant screening. If you do not do this, you will unnecessarily expose yourself to potential discrimination lawsuits, and your own poor judgment.
If the brother visits, fine. Your lease agreement should contain language that mandates that anyone who stays for more than 2 weeks, then he/she needs to fill out an application to rent, and have the rights and responsibilities of the other tenants. This protects you from squatters.
If you are not getting expected traffic, I would try more advertising, use a sign in the yard, Craigslist, bulletin boards at local employers or classified newspaper ads.
For variable income applicants, I require proof of income over time. Last years tax returns and previous 3 months bank account statements. Income must be 2.5 or 3 times the rent.
You cannot legally discriminate based upon how many people will rent. I am referring to this quote:
“Lastly I like them because they are only 2 for the most part and they’ll (ab)use less and wear and tear will be somewhat minimized. Maintenance consequently will be reduced.”
You can only set occupancy standards. Mine is 2 per bedroom plus one. For example a 2 bedroom unit could not have more than 5 people.
I do not typically check previous landlords, employers, or personal references. I think that checking their credit is essential. I usually only look at their credit and their application.
I do not have a minimum score. Bad things happen to good people, and I am prepared to let stuff like death in the family, medical problems, divorce or foreclosure slide when screening a prospective tenant. What I do not let slide are charge offs, patterns of bad credit, bad credit followed by bankruptcy, followed by more bad credit. Deadbeats always have a heartbreaking story to justify a lifetime of poor money management.
If a prospective tenant seems like they are lying, they probably are. Find out why, and you will probably find a legitimate reason not to rent to them.
You cannot reliably predict what kind of tenants you will get from screening. Some tenants that you are hesitant to rent to turn out to be fantastic, and some tenants that you thought would be ideal turn into your biggest headaches.
I have posted about this subject before.
Funder very informative response. I should have probably got the property inspected to see a more detailed report.
The thing is, if the hubby is busy doing variable income work, then what if he has taken a loan or has other debt, then wouldn’t that loan take first preference for payment over the rent (from the wife’s paycheck)?
E-renter isnt as exhaustive as one might think, but its better than knowing nothing perhaps.
On my standardized written criteria for tenant screening, one of the requirements is the demonstrated ability to pay the rent. So, it may not matter if the prospective tenants make a lot of money, they must also have a monthly income to expense ratio that makes them seem solvent and able to pay their rent.
Whether the tenants decide to prioritize rent or another loan is up to them or a bankruptcy judge.
Tenants are ultimately going to do what they want with respect to paying their bills. You can at least let them know your stance on things when they sign the lease. You’ll have financial consequences in place in case they decide to be a little late on rent. You can also tell them that the rent comes first. Having a roof over their heads should be their top priority. Even if a credit card marks them as 30 days late, at least they’ll have a place to live if they pay the rent. If not, then they can explain their thought process to the judge during the eviction hearing.
We are fair but firm with our tenants. If they’re late, they’re paying us some extra money for making us wait.
If they have told you that the brother may be visiting and they don’t want him on the lease, that is tenant speak for the brother will be moving in, but there is something bad about him that will cause you to reject him, so they don’t want you to see an application from him or check into him.
No exception, every adult who lives in the unit gets a complete reference check.
I think this group stinks so bad, I can smell them from way over here. If you decide to take them (and my recomendation is agianst it), please check the brother out and I recommend a month to month agreement, so you can get rid of them more easily if they turn out to be trouble.
If you insist upon a lease, put the couple on the lease and make him sign a contract that says he will comply with all the terms and conditions of the lease with the exception that he wll be considered to be a guest and as a guest he must leave with a 72 hour written notice from the landlord.
Everyone with an income has a way to prove it. He has bank deposit records, or pay stubbs, or records of his billing. if he has a business, he has calling cards, stationary, contracts, maybe a sign on his car.
If he has absolutely no records of his income, he either doesn’t have an income or his income is from something illegal, like drug dealing.