Should we stick with the potential tenant we have now or wait?

Question

My family and I are nearly done with renovating a rental unit with the hopes of not only increasing the value therefore increasing the rent but to also attract higher quality tenants. We have a potential tenant who is very interested in the unit as her mother lives in the same complex and we received a very positive review from her supervisor who not only stated that she has been a reliable employee but is expected to stay with the company for a long time. The monthly income is $3600 and at the moment we are looking to charge either $1000 or 1050 for rent each month. However, if we have the kitchen cabinets renovated then we could increase the rent and potentially attract other tenants. While I am not against signing a lease with the interest I am open to seeing what else is out there. The last tenant we had at one point never had a trash bin until I bought one for her and her family and we also had multiple leaking incidents due to plumbing issues in both the kitchen and the bathroom. It wasn't her fault as her children caused some of it but we decided to not renew the lease. In addition, one of her sons apparently slipped in the bathroom and kicked the wall hard enough to cause a big hole that had to be repaired. I am adding this to emphasize why I feel it's important to see who else would be interested. This tenant would be single with no children which isn't a bad thing considering our past experience (I am personally ok with someone having a family but after having to pay a few thousand dollars for repairs and receiving complaints from the unit below us (2 story building and we are on the 2nd floor) it's important to have a good standard.

In terms of renovation the main focus we have is to finish stripping the paint off of one of the doors (95% done) and while there are other minor things that could be dealt with they are probably not worth the time and effort at this point. In addition to determining whether or not we should commit to the one interest we already have should we go ahead and get the cabinets renovated? It will likely happen this week if we go through with it so any and all thoughts would be appreciated.

Nathan Gesner · Answer

Can you handle some constructive criticism?

Her son slipped in the bathroom and accidentally kicked the wall hard enough to put a hole in it?

Tenant didn't have a trash bin until you bought her one?

Here's my favorite: "It wasn't her fault as her children caused some of it..."

If the tenant has children, she is responsible for their actions. If a tenant can't afford her own trash bin, she shouldn't be in your rental unless you like running a slum with pests. And I've managed 400 rentals for a dozen years and not once had a child fall and kick a hole in the wall. I'll bet dollars to bagels there were other signs that these kids were undisciplined hellions.

It takes some time, but you've got to develop a tougher stance on your tenants if you want to be successful. They should have verifiable income of 3x the rent. They need a decent credit score and a good landlord reference. Have they been at their job for two months or two years? What does their car look like? Can they follow basic instructions when filling out the application? If they are a higher risk than normal, don't accept them without a higher deposit than normal. You have to mitigate your risk.

Even after moving them in, you shouldn't allow them to abuse your house or live like animals. If they don't use a garbage can, it can attract pests and/or damage your property. Your lease should address their responsibilities and there should be consequences when they fail to abide by it.

Theresa Harris · Answer

If you have a good tenant, rent to them. You want someone who will take care of the place, pay the rent and ideally stay for a while to avoid turn over. She sounds like she'd tick all of the boxes.

JD Martin · Answer

Once you find a good tenant there's no point in just hanging around waiting for a better one. So do your due diligence on this one and see how it pans out. If they pass the credit/background check and have stable employment, it looks like their income passes and you could just pass on the cabinet rehab for now and probably gain a long-term tenant if her mother lives there already.

Malkia Ra · Answer

Agreed. Not to mention, testing the waters to see what other potential tenants may surface could mean you lose out on the great candidate you have now.

Should we stick with the potential tenant we have now or wait?

Should we stick with the potential tenant we have now or wait?

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