5 Tenant Characteristics It’s Wise to Discriminate Against

5 Tenant Characteristics It’s Wise to Discriminate Against

3 min read
Kevin Perk

Kevin Perk is a full-time buy and hold and fix and flip real estate investor with over 15 years of experience. He and his wife Terron operate Kevron Properties, LLC, a boutique real estate investing company in Memphis, Tenn.

Experience
Kevin was a past president and is a current board member of the Memphis Investors Group. He’s also a blogger and writer who has authored hundreds of real estate investing articles on BiggerPockets and his own blog, SmarterLandlording.com, some of which have been featured on The Motley Fool and MONEY: Personal Finance News & Advice.

Kevin is also host of the SmarterLandlording podcast.

Originally from the Washington D.C. area, Kevin moved to Memphis to attend graduate school at The University of Memphis. After receiving his master’s degree in City and Regional Planning, Kevin climbed the planning career ladder to eventually become planning director of a county in the Memphis metro area. He “retired” from planning in 2003 to pursue real estate investing full-time.

Since “retiring,” Kevin’s main real estate investment strategy has been to buy and hold, otherwise known as landlording. Generally working in historic Midtown Memphis, Kevin is also known to fix and flip grand, historic homes when the right opportunity presents itself. He and his wife Terron (who is the principal broker at Perk Realty) have participated in dozens of real estate transactions in the Memphis metro area.

Kevin has the heart of a teacher and believes in helping others through education. An instructor of college-level geography for over 25 years, Kevin also regularly participates in seminars and panel discussions at such forums as the Memphis Investor’s Group and the Single-Family Rental Summit.

In addition, Kevin has been interviewed in publications such as the Memphis Commercial Appeal, the Memphis Daily News, and the Foreclosure News Report.

Education
Kevin earned a master’s in City and Regional Planning from The University of Memphis.

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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.

Related: Protect Yourself As a Landlord With These 6 Crucial Documents

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

1. Smoking

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.

smokers-in-rentals

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.

hoarder_house_tenant_abuse

Related: The Top 8 Mistakes Made By Rookie Landlords

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.

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Who do you discriminate against in your landlording business?

Please share with your comments!

Discrimination is always bad—right? Not so fast: Discriminating against certain tenant characteristics can save you major time, money, and heartache. Landlords, add these 5 tell-tale signs to your "absolute dealbreaker" list (and avoid destructive, unreliable renters in your properties!).