Newbie help: which tenant do I choose?

Question

Okay, so the first tenant I chose (who had perfect credit and a clean criminal history) did not end well-stopped paying rent after 4 months-some neighbors mentioned to me they were not very favorable neighbors (they almost called the police on them several times). So I'm gun shy picking the next tenant.

I have decided on 2 families, but can't choose:

Family 1-Divorced (long ago) father of a 21 YO son sold their house. Father has had his job for 25 years, perfect credit. Son works, has good credit-for a 21 YO. They would like to move in on the 22nd, and can pay pro-rated rent but not the deposit, he can pay the deposit when the house closes on the 27th.

Family 2-newly married older couple, she has custody of her teenage niece and has been raising her since she was a baby. Wife had bankruptcy after her divorce 9 years ago. She has had her job for the last 2 years. Husband has had his job for 5 years, but also has wage garnishments from 2 years ago from credit card bills (fairly large debt). They want to move in this weekend and have the money for deposit and pro-rated rent. They brought copies of their pay stubs for me when they came to look at the house.

I have offered both families to start the lease on whatever day they move in or to pay a pro-rated rent. Both can pay July rent on the 1st.

My screening service runs credit, criminal, and residence- both families' scores are very close. I like both families.

Any suggestions are greatly appreciated!

Lisa G. · Answer

@Brianna Schmidt & Jordan Thibodeau *waves* my rental property is in the Northend, a few of the families in the neighborhood let their kids live with them as they go to college.

Kris Taylor · Answer

Definitely the single dad & son.

But my other question would be do you do regular references in addition to the standard background check formalities?

Stephen E. · Answer

I would have to agree with the posters taking the single Dad. Less baggage overall. For the others prior bankruptcy and credit card garnishments signal poor money managers who may find it difficult to pay rent on a timely basis. I have rented to bankrupts in the past and have had mixed results, but none of mine had the current issues such as garnishments that yours have. They had put their problems behind them (or so it seemed).

I would take option #1. One of the skills in this business is being able to discern among prospective tenants who all have imperfections. Most tenants have weak credit; it is one of the reasons why they are tenants. The trick is being able to divine amongst shades of grey and isolate the ones that are a good risk from those that are not. Good luck.

Lisa G. · Answer

@Jeremy Housekeeper -wife of Family 2 was Chapter 7 and it was discharged. She was very upfront and honest about it.  I called the husband to ask about the garnishments, it looks like one is 'active' and one 'inactive'. He didn't say what it was from, just that they were going to be paid off and funds were taken out of his bank account.

Thank you all for your input. It is very much appreciated!

Jeremy Housekeeper · Answer

I'd go easy on the dad with the 21YO son still living at home. A lot of people in their early-20s are choosing to avoid moving out in order to throw more money at their student loans. Even still, he's working and having excellent credit so young is a plus.

For family 2, was the wife's bankruptcy chapter 7 or 13? If it's chapter 13, I'd check if she successfully completed her plan and the debt was actually discharged rather than dismissed; this will give you a greater feel for her discipline with regard to obeying a monthly payment schedule. For the husband in family 2, the fact that the garnishments were due to CC debt is a major red flag. Unless that debt was due to unemployment or a similar unavoidable circumstance (medical, etc), I'd run the other way.

@Lisa G. Usually garnishments due to CC debt occur as a last resort. He might have tried to negotiate a settlement with the collector but they might not have wanted to budge. Hard to tell.

Arch Jeffery · Answer

if you lean toward the delayed deposit, I would ask to see settlement statement which will tell you how much equity he will have after closing.  You may also be able to call the closing officer with the day to see if there are any concerns about closing happening.

Marcia Maynard · Answer

I'd choose the single dad and son.  Both would be named as tenants on the rental agreement jointly and severally liable.   However, I would not let them have the keys or move-in until they have sufficient funds available to do so.

With strong credit, they should be able to come up with the funds.  If they can not get a short term loan from family or friends or a credit cash advance, then they will need to wait.  Ask for a holding deposit and hold the unit for them up to a specific date, no later than July 1.

Lisa G. · Answer

@Gerald K. yes, I do understand that part, The thing that makes me the most nervous about Family 2 is the credit card wage garnishments. Did they have to wait until it got that far to pay their bill? It is fairly recent.

@Brianna Schmidt - I was thinking about asking for a post dated check, or something. I do understand about the house selling. I really like that he has held his job for 25 years.

Gerald K. · Answer

Please see BP screening tenants Ultimate Guide

Make sure to call previous landlords and the ones before them. I would not take a tenant without a security deposit. Too risky. They have no incentive to pay once they've moved in.

Brie Schmidt · Answer

Selling a house can be expensive, especially with repairs required by the buyer.  I would be ok waiting 5 days for the deposit