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Posted about 9 years ago

Low Rent Income Property - Screening Tenants

In the BP Tenant Screening book, there are two initial screening items that would cause a prospective tenant/applicant to be Denied, 1 - does not earn 3x the monthly rent, 2 - cannot get a qualified co-signer.  There are several other recommendations from posts, blogs, podcasts on BP that also have other indicators for denial, e.g. no past evictions, criminal activity, etc. 

But if we use just the first two as a path to denial, what is the success rate others have had in getting good tenants accepted for low rent property? We are looking at some opportunities in older (but safe) neighborhoods that will attract renters with low income and would like any input from the BP community to help guide how best to screen/accept these tenants who are likely to have some marks on their record.

Also, we have created a scoring system (thank you Michele Fisher http://www.biggerpockets.com/users/fischem)....but we have been told by a couple of landlords, that if we stick to our scoring, we'll never be able to rent to low income candidates, even though we've tried to keep it within reason.  Any thoughts would be very much appreciated. 


Comments (4)

  1. Podcast #83 specifically addresses all of these issues.  The speaker is @Marcia Maynard, in the podcast links Marcia shares a questionnaire document that she screens her tenants with.  There are so many other factors to consider before your prospective tenant even fills out the application that the real question becomes, "how do I value my time?  How do I screen people over the phone 1st so I don't waste my time with questionable applicants?"  This podcast is a brilliant listen!!! 


    1. Thanks!  Headed over to podcast now!  


  2. Thank You so much!  This is good information from someone who's working in this space!  It is very much appreciated. 


  3. I look at several criteria before renting to someone.

    a) Income - Do they have 3x the rent amount in gross income?  That helps them afford the rent. Those landlords that only take 2x rent or 2.5x rent don't consider that sometimes, tenants don't have anything in savings or don't save enough for emergencies.

    b) Eviction history - Ideally you want someone that has NEVER had an eviction. Barring that, no evictions within the past 5 years at a minimum and definitely not a pending eviction.

    c) Criminal history - I don't want criminals in my place, especially if someone has had prior drug charges.

    d) Credit history - If someone has a history of not paying their vendors (e.g. outstanding judgements) what's to say they won't stop paying you?

    A person is more than just one number; you have to look at several factors.