As I understand it, you have to be able to produce a written copy of your rent standards, should you have to fend off a Fair Housing complaint.
Here is what I have so far…
1)Gross monthly income should be 3X rental rate.
2) No unpaid landlord tenant judgments.
3) Positive landlord reference.
4) Bankruptcy discharged.
5) No more than 2 residents per bedroom.
Those are pretty close to my standards. I don’t worry about bankruptcy, and will not accept anyone that the court had to do an eviction. I figure if they got to that point they aren’t worth having around.
If there is a judgement for “rent and possesion” anywhere they are automatically disqualified. That’s actually my biggest thing.
Income is hard to verify in unusual situations - I think you need to have a rule for those.
What if they are paid largely on commission?
What if their income is SSI, disability, retirement income, pension, VA housing allowance, child support, etc.?
You don’t get pay stubs for a lot of those situations, and tax returns are too old to mean anything. I have a gal renting from me that makes $2000/month plus commission. I can’t verify her income because if she doesn’t sell enough she doesn’t get but $2k. I rented to her anyway because she had great rental history with several landlords in my small town that I know. Her daughter had enough income that I was able to verify that I didn’t break my own rules, but I think I am going to update it to allow me to consider 50% of a commision based pay towards the monthly allowance. I.E. a person that rents a $1000 house needs $2000 in base income and $2000 in commission to qualify.
You also don’t get pay stubs or reliability with child support or a lot of those other things.
I meet and greet and if they are presentable with good story then it’s all about proof of income. For those w/o paystubs I want to see bank statements showing money coming in and going out or right story. Examples… a webmaster who gets a bunch of small comission checks that added up to way over 300% of rent. Comsotologist who makes tons of money but most in cash, showed me bank statements from check deposits of only 180% of rent but knew cash tips boosted her income way over my 250% of rent threshold. Even a presentable poledancer (yes I live in Vegas) who’s man had proof of 200% of rent while she had a bunch of cash. All turned out to be great tenants.
I would also consider a bad credit score, most types of criminal history and any evictions in their past as negatives as well
However negatives of many types (with exceptions to criminal records and recent evictions) can sometimes be reduced or eliminated by putting down a larger deposit, in my opinion.
So if you do get someone who makes $4,000 a month, they have been on the job for a couple years, will be paying $1000 a month rent - but they do have bad credit and they broke a lease 3 years ago when they got a divorce - do you eliminate them? Not necessarily, especially if they can put down 2-3 months of a deposit!
You need to keep your standards tight, but not so tight that you don’t get any renters.
Remember that the average renter tends to have imperfect credit, hence they are renters and not home buyers.
The most important thing you need to look for is a good, steady source of income.
I am NOT advising you to do this at all - but I know one landlord who only verifies the employment of people. He doesn’t do a credit, criminal or any other background check. To me - this is nuts. However he has a 4x income requirement, and hardly ever has any evictions. Interesting, eh?