Minimum Income & Credit Score for Prospective Tenants

Member since 2022 · 10 posts · 2 votes

Does everyone require prospective tenants have 3x the rent in monthly income / rent is no more than 30% of their monthly income? What is minimum credit score you look for in a B- neighborhood? For people with lower than your minimum credit score, do you still have them apply to see more detailed credit check and give them the option to pay larger deposit or something to help protect yourself?

0 Reply

52 views

Most Popular Reply

Marcus R.

Real Estate Agent · Denver CO · Member since 2019 · 209 posts · 332 votes

We require a 670 Credit score. No income requirements but we do go through their credit report in detail and ask questions as needed. I think in theory income requirements can work but we all know people with high incomes who are still paycheck to paycheck. It's the behavior that's the problem, not the income.

1 Reply

See this reply in the discussion

11 Replies

Jump to latestLatest

Sort by

Charles Carillo
Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
2y
@Sam DiNicola

3x the rent is our standard guideline for new tenants but, many landlords are not as strict on this, with a growing number of tenants paying 40%-50% of their income on rent (especially in Florida).

For a B-class property, I would say the minimum is 670 (good credit - https://www.experian.com/blogs/ask-experian/credit-education...). Would I accept someone with a slightly lower score; possibly, but the deposit needs to be larger and/or apply with a co-signer.

I have found that the best practice with tenant requirements is to list all of them in the property rental listing. The tenant can then make the decision if they want to apply or not after reviewing them. I would not tell them upfront that you will bend the rules.
1 Reply
Sam DiNicolaPro Member
OP
Member since 2022 · 10 posts · 2 votes
2y
@Charles Carillo thank you for this! If a tenant with lower credit, do you take a larger security deposit or instead require first month, last month rent, and one month security deposit?
0 Reply
Richard F.
Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
2y
Aloha,
Requiring larger deposits from some can be seen as a Fair Housing violation, as you are effectively allowing them to "buy" their way in. Also, many locales limit what you can collect as Security Deposit and initial Rent payment. Check local LL/Tenant law.
Regarding credit scores, this will help you understand their meaning:
1 Reply
Sam DiNicolaPro Member
OP
Member since 2022 · 10 posts · 2 votes
2y
Fair housing was what I was thinking of. I will check our local laws, thank you!
0 Reply
Marcus R.
Real Estate Agent · Denver CO · Member since 2019 · 209 posts · 332 votes
2y
We require a 670 Credit score. No income requirements but we do go through their credit report in detail and ask questions as needed. I think in theory income requirements can work but we all know people with high incomes who are still paycheck to paycheck. It's the behavior that's the problem, not the income.
1 Reply
Charles Carillo
Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
2y
Quote from @Sam DiNicola:

Fair housing was what I was thinking of. I will check our local laws, thank you!

Florida's landlord-tenant laws state that there is no limit to the security deposit amount a landlord can charge.
0 Reply
Charles Carillo
Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
2y
Quote from @Sam DiNicola:

@Charles Carillo thank you for this! If a tenant with lower credit, do you take a larger security deposit or instead require first month, last month rent, and one month security deposit?
It is all on a per-case basis when you are dipping below the 670 minimum. How far below are we talking? Ask them for a co-signer, and I would most likely double the security deposit you would charge normally. If their credit is getting under 650; I probably am not going to rent to them.
0 Reply
Sam DiNicolaPro Member
OP
Member since 2022 · 10 posts · 2 votes
2y
@Charles Carillo and that wouldn't be a fair housing violation asking for more security deposit based on their credit score?
0 Reply
Charles Carillo
Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
2y
Quote from @Sam DiNicola:

Fair housing was what I was thinking of. I will check our local laws, thank you!
Florida state law does not limit how much a landlord can charge for a security deposit.
https://www.nolo.com/legal-encyclopedia/overview-landlord-te...
https://www.doorloop.com/laws/florida-security-deposit-laws
https://www.managecentralfloridaproperty.com/florida-securit...
0 Reply
Charles Carillo
Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
2y
Quote from @Richard F.:

Aloha,
Requiring larger deposits from some can be seen as a Fair Housing violation, as you are effectively allowing them to "buy" their way in. Also, many locales limit what you can collect as Security Deposit and initial Rent payment. Check local LL/Tenant law.
Regarding credit scores, this will help you understand their meaning:
Florida state law does not limit how much a landlord can charge for a security deposit.
https://www.nolo.com/legal-encyclopedia/overview-landlord-te...
https://www.doorloop.com/laws/florida-security-deposit-laws
https://www.managecentralfloridaproperty.com/florida-securit...
0 Reply
Charles Carillo
Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
2y
Quote from @Sam DiNicola:

@Charles Carillo and that wouldn't be a fair housing violation asking for more security deposit based on their credit score?
Florida state law does not limit how much a landlord can charge for a security deposit.
https://www.nolo.com/legal-encyclopedia/overview-landlord-te...
https://www.doorloop.com/laws/florida-security-deposit-laws
https://www.managecentralfloridaproperty.com/florida-securit...
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.