BiggerPockets

Hi everyone. I haven't posted in a while. I've been busy getting a rental in order. I now have a dilemma between two applicant tenants. I am leaning towards one but wanted some of your opinions. The SFH is a 3/2/2 listed for 1295. Comps at 1350. Only other active comp is being listed for 1550.

App #1: single mom with four young teenagers. Will be using section 8 voucher. Income (to be verified) is already 3x rent. Did not have complaints about the house, but section8 still has to do inspections. Some credit issues.

App #2: two grad students working research positions. Good credit. Nitpicked during showing (e.g. how some cabinets doors had a mm gap in closed position). Signs of endless service calls in the future? Constantly wanted to negotiate price down. Requested fridge, washer, dryer at my expense (lower rent if they bought and I keep or I buy at current rent rate). Asked my realtor if they could back out of app if they needed to.

Both are wanting to move in 2 weeks.

Your opinions are appreciated.

Well, did you have a set criteria (written) before you started taking applications, did they both meet it? Did you already verify their employment, credit, income, past rental history, etc.?

What shape is the house in and will it take abuse from 4 teenagers? How old are the teenagers (when they will be moving out)? Boys or girls (boys tend to be rougher on property than girls)? How does the single mother's rental history?

As far as the grad students, what happens if one of them finds another position and moves out? How far away from graduating and do they have intentions of moving to another city/state or do they plan to stick with their current employer after they're done? Nitpicking can actually be a good sign, you can protect yourself by having some addenda to your lease but it tells you they may actually care about the property and its condition. It's obvious that they view your property as a fall back place and they're asking about backing out in case they find something better/cheaper. I'm curious why two grad students need an SFR instead of an apartment or a condo?

The single mother will probably stay longer, you can bank on getting your rent on time, but the property will probably take some abuse from having teenagers. The two grad students will probably not stay as long, may break the lease if one of them loses a job or lands something else, but they'll probably take a better care of the property. It may be beneficial to lower the price a bit more and see if you can attract few more applicants...

Good luck!

I think George and Jim covered it and make sure even though they accepted that you fully process their application like Jim mentioned. Half the time prospective tenants take off when they hear my application process. That's fine, I want the cream of the crop tenant.

Update - I went with app #2. They actually have not bothered me much even though they have a direct line of communication with me through google chat. Even better, they set up an electronic monthly recurring transfer for rent payment. I feel blessed!

Roy - I actually had a criteria. Both applicants came in the same day and both met that criteria. Being my first rental, I guess I didn't narrow it down enough and I didn't really know what type of applicants to expect. Otherwise, I would have already known which one to pick. I believe you learn to make those decisions through experience. I don't think #2 is the smart way to go. What if none of them meet your criteria.

Great job at firing back! Don't let them push you around. Be firm, let them know who is in charge. I usually tell them, if you don't like it, this unit may not be for you and it's something you have to consider. If your soft, you will have a lot of headaches.