This just goes against the grain of conventional thinking, but when we stopped trying to get AA tenants, and began marketing to the CC tenants, we were able to command higher rents, higher deposits. and longer terms.
On low-end rentals it’s enormously difficult to get big enough deposits to cover potential damages even from, well-screened, “good” tenants.
Also, the “good” prospects will shop around for bargains in rent. Plus those landlords that advertise bargain rents, will have the pick of the litter among the AA-grade prospects.
Theoretically, an AA-grade tenant won’t trash the place. However, in the event that the business relationship goes south, the AA tenant can morph into a turd, with nothing much to lose for screwing with us over rents, or the condition of the property.
On the other hand, if we’ve got a tenant who’s had a hard time finding a place to rent, he’ll give us the deposit we want, sign our 24-month lease; and be happy to ask his Uncle Henry to co-sign. After all that, he’s going to think twice about jeopardizing his deposit and his co-signer’s credit, etc.
Again, we don’t get long term leases, higher rents, and big deposits from “good” renters, because that market niche never supports it.
However, there’s a different market for the “bad” renters. It’s a market that most landlords don’t want to cater to. As a result, it reduces the competition to the point it’s like shooting fish in a barrel.
Of course some states undermine our “bad” renter niche, by limiting the deposits we can demand. As a result, we have to settle for the better tenants, lower rents, and shorter terms (if we didn’t get creative).
Of course there’s ways around this government interference, but that’s for another post.
Meantime, doesn’t it make sense to market to people who are happy to pay over-retail, cough up significantly larger deposits, content to coerce Uncle Henry to co-sign, and agree to longer term rental agreements?
Of course, too, this isn’t for novices.