Which renter should I choose?

Question

First-time renting my home. We have two possible applicants. Help me think through the pros and cons to determine whom I should rent to:

• Candidate 1: Single recently divorced person with a 65 lbs pitbull. Getting $450k from a home sale and willing to pay entire year rent upfront. Good credit score (800+) but low income ($70k)
• Candidate 2: Family of 5 (3 kids) with a business + a smaller dog (40 lbs bulldog) and ok credit (680+) but higher income ($130k) than other candidate.

For Candidate 1, my main worry is the big pitbull. My insurance company says they exclude coverage for exotic animals and any dogs with a bite history. They do not have an excluded dog breed list. Neither of the dogs have a bite history.

Who would you choose? Thanks for your help.

Theresa Harris · Answer

What if the tenant leaves early?  What if you need to shorten the lease because they broke the agreement?  What if you have to evict?

Theresa Harris · Answer

Not sure how you get proof of no bite history, but if your insurance company doesn't have problems with either breed, go for the first candidate who applied and was qualified.  Candidate 1 with no kids might have less wear and tear on the house and they have a better credit score.  I wouldn't let them pay an entire year up front as there are too many things that can go wrong with that.

Akshay Saxena · Answer

Thank you. The single person is going through a separation and will be getting a large sum as part of their home sale. Hence the large payment. Their credit score is high but there isn't much of a rental history since they stayed in an owned home before. They have been at their job for 16 years.

Nathan Gesner · Answer

There are other issues you should be checking that aren't on your list. For example, how long has the single guy been at his current job? How long has the family owned their business, and is it doing well? What is the debt:income ratio for each?

Applicants offer to pay a full year in advance to jump in line ahead other candidates or to distract you from looking into their background too deeply. When someone offers all cash up front, I dig deeper to see what they are trying to hide.

Wesley W. · Answer

Candidate 1: pit bull is a liability for you, regardless of tenant's insurance; paying a year in advance is a red flag -  @Theresa Harris is right.  Very tricky to unwind a contract that's been paid in full.

Candidate 2: families will usually stay longer, but possibly more wear and tear; minor concern about small business vs. W2

I would pick #2.

Melanie P. · Answer

Or they will make up with their spouse and move back home in a couple months.

If your state has a security deposit cap collecting the year up front is problematic.

I would choose Candidate #2 providing you have acceptable verification of their income - bank statements that multiply out to what the past couple years tax returns indicate on the business. And you ran an eviction screen on them with no records found.

Which renter should I choose?

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