Today, the word “discriminate” gets a bad rap. Don’t get me wrong, much of that is for good reason, but we humans discriminate in all sorts of ways every single day. It is just something we do as a part of life, and we often do not even realize that we are doing it. Discrimination is not something most of us would like to admit that we do. But have you ever stopped to consider that perhaps discrimination is something we need to do, something that should even be encouraged?
If you are already or would like to become a landlord, the answer is yes.
Should landlords discriminate against everything? No. You should not discriminate against people because of their age, ethnicity, race, religion, national origin or familial status. It is illegal, wrong and the reason the word discriminate has such a negative connotation today. But almost everything else is and should be fair game.
For example, do you or would you review someone’s income stream before renting to them? Of course! You do not want to rent to someone who cannot afford it. That is discrimination based upon income.
What about criminal history? Would you rent to someone without checking if they have a serious criminal past? If you would, then you might be naive and are likely to face many other problems down the road.
So what other factors could you use to discriminate against possible bad tenants? Here are five possibilities for you to consider.
5 Characteristics You Can Discriminate Against as a Landlord
You can ban smoking in your properties. Yes, you cut yourself off from a chunk of the rental market, but by discriminating against smokers you also reduce your clean up costs and risk of fire, and you may actually attract a better class of tenants.
2. Pet Ownership
You do not have to allow pets in your properties, or you could only rent to people who have pets. Pet owners are a significant part of the rental market, but many landlords feel the damage pets can cause is not worth it. On the other hand, some feel that pet owners make better tenants and cater their properties towards them.
3. Job Type
Being discriminatory in your rental application process is all about reducing your risk and increasing the likelihood of collecting the rent. You may therefore want to eliminate certain jobs from contention.
Lawyers are one example. Some landlords will not rent to lawyers because some lawyers have a tendency to sue. Other landlords may not rent to truck drivers or landscapers, as they do not want 18 wheelers or mud all over their properties.
4. Constant Moving
Ever have an applicant who seems to move every year? If so, you do not have to rent to them. Tenant turnover is one of the major cash flow killers in the landlording business. So if possible, you want to find tenants who will stay for the longterm. You can discriminate against the ones who want to move every year.
5. Sloppy Living
Ever have someone show up just plain filthy, with food dripped down the front of their shirt and a car full of trash? I have, and I did not rent to them—and neither should you. If you do, all of that filth will move into your property. It is best to discriminate here.
So remember, it is OK—and even advisable—to discriminate if you are or plan to be a landlord. In fact, you simply have to discriminate in order to protect your interests and property. The key however is to be consistent in your discriminatory practices. You cannot let one lawyer in and keep another one out, for example.
You should give careful consideration to how you will and how you will not discriminate in your landlording business. Write everything down, and keep it handy in case you are ever asked for your rental policies. Remember, you can discriminate, but the person you discriminate against may feel they were wronged and sue. Protect yourself by being consistent and having written policies in place.
We are republishing this article to help our newer members make good tenant selections. Please note: To make sure you’re on the right side of the law as a landlord, always refer to Fair Housing Laws when making decisions about potential tenants.
Who do you discriminate against in your landlording business?
Please share with your comments!
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.