Hello Again Everyone,
I am processing a rental application right now and I would like everyone's opinion. The background check came back clean with no criminal history. Good start. No evictions on record either. Good again. I called the previous landlord and they said that the tenant keeps the house in good shape, but is late 1 to 2 months rent fairly frequently. This was the landlord's only rental and it doesn't sound like they were very good at pushing the tenant to pay. What would you do? Some options I have thought of are below.
1. Don't rent to this tenant
2. Get an extra security deposit (1.5 months instead of 1, this is the most that is allowed in Michigan)
3. Make them get automatic payments from their bank account
4. Maybe both of 2 and 3?
If they are behind in rent 1 - 2 months on a regular basis, did the landlord (or tenant) say why? If it's because the tenant can't afford the rent or can't manage their money, you will have the same experience.
Automatic payments debited from their account won't matter if there's no money in there to debit.
An extra half month's rent won't be much use if they're 1 - 2 months behind and you have to start an eviction. They will certainly not pay another dime once that starts.
Are there no other potentially qualified applicants? So far option #1 sounds best.
I would not rent to them. Do you have no other applicants?
1-2 months late, frequently? That's a lot different than your average "pays late". I'm guessing you wouldn't even be considering this applicant if you had others. I suggest putting your energy into something you can control. I'd focus on getting more applicants and not on trying to transform a chronic later-payer.
Thanks for the feedback everyone. I am definitely leaning towards not renting to this tenant. I was going back and forth in my mind about what to do, thinking that most tenants don't have great credit. With that said, most people should prioritize housing as their top payment to make. I do have a good amount of people calling to see the house, so I will keep showing the house to find a better tenant. Thanks again for your comments!
I would also say don't settle and find a better applicant. Most applicants/tenants in my rentals area don't have great credit either, but one that pays rent on time is still quite possible. After ridding of some terrible non-paying tenants that I inherited, I learned quickly that I'd rather be vacant a little longer than having the place filled and still no money coming in.
Tenant screening to find a quality tenant is the most important aspect of being a landlord. This is where you absolutely do not want to cut corners or compromise. Even if it means going one more month without a tenant. Move on to the next applicant,
How does the rent on your property measure up to the former property? Maybe the applicant was in over their head the first time around and is attempting to live back within their means at your property. Just a thought.
Also, I'd venture to say that this is where personal intuition comes in. If you feel comfortable with it, then I would allow it. But the fact that you are asking a group of real estate investors may indicate otherwise. Best of luck!
Well...,maybe the current landlord didnt train the tenant from the beginning. Even so, would i want to go into knowing that they need to be trained to be responsible? Probably not. If I come across that bridge, Ill follow procedure. But Im not walking into a gunfight with a water gun.
The last thing I want is a late tenant. I don't do late :) I ALWAYS pay my mortgage on time. In order to do so my rent must be received on time!
Just so I understand they are 1-2 month behind on rent and you are asking if you should rent to them ? I wouldn't.
If the landlord said they were late frequently but only days behind I might consider especially if they have no consequence for being late and the landlord lets it slide and they have been with him a while. That may be learned behavior that they can unlearn.
What is frequently late 1-2 months that is like not paying your rent...
Unless your rates are considerably less than their current landlord I'd keep shopping for tenants.
My rental is about $300 per month more than their current rental. I have had a ton of calls for the house, so I am definitely moving on. Thanks for confirming my decision everyone!!
Absolutely not rent to them
I see you offer screening services. How long will it take to get back a criminal search in Mississippi?
1. I'd not rent to them
2. If you do.. do it month to month so u can kick them out and look for new tenants in 36 days.
Originally posted by @Kris Taylor:
Absolutely not rent to them
If after you decline their application and they should decide to push the issue, you can ask them to show their proof of rent payments for the last 2 years (or however long you want to go back).
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing