Below 600 credit score tenants

Lincoln, Nebraska
General Landlording & Rental Properties
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Below 600 credit score tenants

Mohammad Murad
Member since 2024 · 24 posts · 7 votes

Hi,

I am running a STR unit where a guest (unmarried couple) reserved the place and they asked whether I want to lease the property for long term or not. They seemed to be very interested and willing to pay slightly more than as it is a full furnished . Both are struggling financially. She worked as a cleaner and her boyfriend is a construction worker . Her credit score is <600 and she earns small amount monthly. She doesn't have bank account.

Now, should I lease my unit to them. If yes, what precautions I can take to avoid any financial loss..

Thanks in advance 

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  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    11mo

    The vision of dollar signs has you ignoring a bunch of red flags.

    "They are struggling financially..." This will end up being your problem. If they are struggling financially, why are they paying extra for your STR? It's probably because they won't qualify for an apartment. Did you run a criminal background check?

    She doesn't have a bank account means you can't really verify income.  Are they paying her cash?  How would they pay you?  Accepting cash is a terrible idea.

    I"m less concerned about the credit score as many residents have poor credit.

    Unless you go through all the steps to qualify them properly, the best steps you can take to avoid financial loss is to not take them on as long-term tenants.

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  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    11mo

    Why would you want to take this risk of having non paying tenants? Even if you are making slightly above market rent, if they stop paying all the extra rent turns negative quickly. A persons credit score is the largest indicator of whether or not they will pay back debts. Sub 600 tells me this woman is at high risk for default. If she came to you with 600 credit but had 100k in the bank or had other mitigating factors, at that point you could consider them. I understand the human factor, you want to have a soft heart and help those in need BUT from a bussiness stand point, you are putting yourself at risk.  

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