Rental Property Investor · Pasadena, CA · Member since 2013 · 7 posts · 1 vote
Hi BP,
I am currently in the process of accepting applications to rent out one of my units. One of the applicants who applied is a very polite young man who is married with 2 young kids. He works at a local church as a youth pastor. Upon receiving his application I noticed he does not meet my income requirement. His wife is currently not working since she stays home and take care of their kids. However he told me the church he works for will be paying for his monthly rent. The reason why they are moving is because they are currently living in a one bed room, and needs more space for his growing family.
Yesterday I met up with him at his church so I can talk with his pastor. His pastor confirmed the fact the the church will be paying for monthly rent.
So my question is - how should I handle this situation? I've never encountered such arrangement where a place of employment, let alone a church, will be paying for the rent of my tenant. My first thought is that I will ask the church/pastor to be his cosigner. My initial reaction tells me that this should be pretty secure. I also haven't done my background check/screening yet should I still do so?
I haven't heard of this before . I have heard of churches paying the required deposit. However, since the Pastor confirmed he will be paying the rent, I would require the Pastor to cosign the lease and type up another document stating that the Pastor/Church will be paying the rent in accordance with your lease and rental terms.
Here are a few questions that has come to mind in responding to your post:
Who will be paying your required deposit?
Who will it be refunded too at the end of the tenancy?
Who will be paying the required utilities at the rental property?
We have the guarantor of the rent funds co-sign the lease. Doing so prevents a so called dumping effect where the tenant is not financially able to go it alone, and gets help along the way. If we get resistance, we move on the next prospective tenant. It protects you.
If you do co-sign, set up rent payments to be sent directly to eliminate waiting a few days for money transfers.
It's somewhat common for churches to provide housing for their Pastors. It usually comes in the way of a parsonage that the church owns, but I think this situation does not seem unusual to me.
Churches pay pastors/staff with a housing stipend. It's done because it allows the recipient to avoid paying tax on it as income. Not uncommon in my mind. You might check but it could go straight to his bank along with his other income.
Let's see run a background check vs good faith? For me I go with the background check every time. Sadly church membership or even employment is no guarantee of future performance.
Thank you all for chiming in. The church is decent in size. I will definitely ask the church to be the cosigner in this case.
Now that the monthly rent is secured, should I still run his backgroup check and credit? Or should I just accept this application based on good faith?
Is there some data or stats our there showing church employees are excellent payors and don't have eviction or criminal records? If so, please share! If not, do the checks.
Now that the monthly rent is secured, should I still run his backgroup check and credit? Or should I just accept this application based on good faith?
Always do a background and credit check, guarantor or no guarantor.
You have to follow your procedure the same for all tenants. Have written criteria and follow your procedure the same for each tenant. You don't want some tenant later claiming you violated fair housing- written criteria helps.