Would you rent to unemployed couple with 6 months prepaid rent???

44 Replies


Seriously though. Don't do it.

Think about the number of days/weeks off your life going through eviction, and the ... I should have not done this conversation with yourself.


I would rather structure it as say 3 months rent and a security deposit equal to 3 months rent. 

If they pay 6 up front and then don't pay on month 7 you still loose out with an eviction with only 1 months rent as security deposit.

Doing it the other way if things go south you have 3x the deposit amount to weather the storm.

FYI different states have different laws in what you can collect for deposits and how much. Here in Ohio we can collect for more than 1 months rent but would be required to pay interest on that amount.

@Michael Hoover  - I would say no. He managed a restaurant and it failed. He has a BK. Would you hire a manager of a restaurant that failed, to run your restaurant? No. He's going to have to take a pay cut to get employment. They will have to adjust their lifestyle to make ends meet on a lower income. Your property is likely close to the one they were just at in terms of quality and quantity. They will need to move down the food chain so either way it's a no go. Keep in mind 6 months is January. What's it like finding tenants in January in Chicago area?

To be clear on what they actually offered.   They will pay 6 months rent up front and will pay the individual months rent on the first day of lease through month 6.   So the 6 month prepaid rent will actually go toward months 6 through 12 rents.

Since this is in Cook county - which is very TENANT-FRIENDLY, then do NOT do the deal. It could take you 6 months to evict a tenant there - specially if the tenant you happen to rent to is a professional tenant. These people know how the system works and what to tell the judges to get them to live rent-free.

I agree with @Timothy Riley  

Having gone through the agonizing process of an eviction in Chicago, I'd definitely not take it lightly.  You could easily be out 6 months rent.  You can check with your attorney, but I'm guessing you couldn't serve them until the 6 months of prepaid rent elapses.

Short term gain for long term pain from where I'm sitting.

Lincoln Square is a very hot neighborhood you should not have any issue. I would list the unit on the MLS with a realtor and look at alternative applicants before making a decision

No.  Bankruptcy  5 years ago, unemployed, and sizable savings? Hmmm, wonder if the sizable savings came from not paying a mortgage, living there for free and saving the money to get a sizable savings? And unemployed? Very risky. If this is a good rental, you should definitely be able to find a better tenant! Why settle for such a risky tenant. As with all investments, if you manage risk well, you will definitely end up making more. So again, I would never rent to someone unemployed, just too much risk to make sense for me. From all my mentors, they have said if someone comes waiving cash and offering many months of rent up front, they are desperate! RUN is the word they used. Whatever you decide, I hope it works out for ya! Happy Investing.

No, I would not. I generally consider a tenant's offer to pre-pay a huge red flag. In my mind they are waving the cash in your face in hopes that you will overlook things when it comes to their screening. If the tenant is unemployed, you should expect the worst - that they still don't have a job at the end of the six months and that there are no more cash reserves to pay you rent past that point. Now look at the timing of things. You won't be able to initiate anything for the 6 months they pre-paid. So let's say they stop paying at the end of month 6, it may take you months to get rid of them which means you are out of rent income. Not to mention that they may still trash your place which will cost you time and money to fix before you can re-rent once you manage to get rid of them. In the end, the 6 months rent you collected upfront may be wiped by the additional expenses you could incur if you ended up with a bad tenant. 

Why did they sell their house if they have all this extra cash? Sounds like they're hiding something.

Originally posted by Account Closed:

Since this is in Cook county - which is very TENANT-FRIENDLY, then do NOT do the deal. It could take you 6 months to evict a tenant there - specially if the tenant you happen to rent to is a professional tenant. These people know how the system works and what to tell the judges to get them to live rent-free.

 This is a scary thought. Although it may be tempting to take such a large pre-pay and to help someone out, ultimately this is your business. Hopefully you have some other options that present less risk than renting to these tenants.

Originally posted by @Michael Hoover :

Looking to rent one of my 2 bedroom units and a couple with an interesting situation applied and I wanted to see what some you of thought of renting to them.  

The husband was recently laid off from his job and is currently seeking employment.  The wife is currently staying home with their young child.   They recently sold their home and have offered to prepay the first 6 months of rent (1650 per month) and begin paying on first month and continue for the next 6 months until the full years rent is paid.   They stated that they have very little debt and sizable savings (getting the credit reports this evening).  He filed for bankruptcy 5 years ago and she has good credit.

What do you guys think?   

 Hi Michael: "sold their home" to me may translate into "lost their home". I'd want to know where the prepayment money came from and you will probably be able to discern that from his credit report. I would also check out their court records as this all sounds more than a little suspicious. Look forward to hearing what you find out and best of luck to you.

Originally posted by @Pawan W. :

No! Does not make business sense unless you want to sign a lease for only 6 months and then re-evaluate.

 That sounds good on the surface, but by then he could be in a situation where it's hard to evict them if necessary. Best rule of thumb I think is to only rent to people who don't give you doubts even before the lease is signed. Even then it's hard enough, but at least try to get off to a good start. Thoughts?

I am so glad someone finally rented to me when I was unemployed. I had just returned from a long stint overseas in a cash-based country (so no credit score).   For most people, unemployment is a temporary situation.  I do not understand why so many landlords treat it as though it is more likely permanent.  And the attitude of "well if they can pay in advance for 6 months, they can pay for 12"  is harsh and stinky.  As a landlord, I never lose sight of the way I was treated as a tenant.  Tenants are people, not wallets.