I am weeding through possible tenants for my first rental. Out of the people we have met my wife and I both like an older couple with a small dog that have had a checkered past and were completely up front and honest about it. He has a DUI and Possession charge that came from the same traffic stop. He is not the kind of guy you would picture with a drug problem. It has been over 5 years and he has been on probation with nothing but good references and works as a construction project manager so problems with the house will be only major issues all small items he can handle. They have good rental history and communicate well with us. I have gone to their apartment and spent an hour talking and meeting the dog. They have paid $1400 a month at the apt for the last year, my rent is $1450. They cant make all the security deposit up front it will need 3 installments over the first 3 months.
So far everything checks out well and we have a good feelings about them being honest hard working couple.
Would you rent to them? Advise?
@Justin Green I would have less of a problem with the charges than I do with not having the security deposit. It sounds like they are one car repair away from not being able to pay rent. I much prefer more financially stable tenants.
@Justin Green I believe in second chances. But they come with conditions. I've had people like you describe move in and do well for a couple years and then fall off the wagon. When I take someone with a checkered past I keep the rent at the top of the market and I generally double the deposit. Under no circumstances do I allow installments on security deposits -that is your security for if/when they default. All $ needs to be in place before they take occupancy -that is what we expect from 'ordinary' folk, why would we bend the rules for those who have shown less than an exemplary history?!
Most of these folks are very grateful that I have given them an opportunity, and many truly do prove to be great residents.
Your description of this tenant sounded like you were asking for others to validate a decision that you've already made. If you want to take the risk of renting to this fellow, then by all means, do so. It's your property. Things might just work out fine. It's your business.
On the other hand, this is your BUSINESS. Treat it like a business. Is it your business policy to accept security deposits in installments?
I hope I don't sound too nasty, but you asked for advice and I believe you need it in this case. Sorry. I hope this is helpful.
All the best.
To a certain degree it will depend on your market, the property, and of course the tenant.
That said, the deposit should be handled as you would with any other application. Is it your business policy to accept the deposit in payments? If not, why are you making an exception for this tenant? Is it a valid reason or are you letting your emotions lead the decision?
You mentioned a pet; do you typically allow pets or is this another exception?
I personally have several "checkered" past tenants. In my experience, they are loyal, keep to themselves, stick around awhile, and like to pay in cash (which you will never hear me complain about).
It is a natural reaction to want help the "underdog", just keep in mind why you are using real estate as an investment vehicle. Whatever you do, make sure you apply equal standards across the board and keep your emotions in check.
To be honest with you I have found some my best tenants, have been convicted fellons, they know that they have been turned down from most companies, and the fact that I gave them a chance really goes far. Before I approve anyone that has a criminal record, I always ask if they are on probation, and if they are on probation I get permission to contact their parole officer. I always ask the parole officer if this were their property would you rent to them. Since they are ultimately the person that knows their character, and knows their past behavior that is the best person that you can ask because they have no reason to tell you something that is not true.
Also you treat them just like any other tenant and they must have a security deposit/ pet fee (if necessary). I know that you want to help him out, but maybe you should give him a payment plan, and if he doesn't meet the payment plan, but you do need to get some money up front incase this doesn't turn out well.
I might consider someone with a criminal history depending upon how long ago it occurred. I would not set someone up on a payment plan for the security deposit. If for some reason they default before you have the entire deposit what would your course of action be? Why put yourself in that situation?
I really must reiterate what everyone else has said. I have much less problem with his background as I do with the installment plan. Without a security deposit you have no protection or at least a cushion to bridge the gap if/when they default or trash your place.
Personally I would hold off for a better tenant apllicant.
No, and because of the money not the record
Same here on the security deposit. Ask them to borrow it from friends/family. If no one will lend to them, why would you?
Thank you all for the advise. The history is not a problem for most of you and myself included. The security deposit is. I have notified him the security deposit is doubled and needs to be paid up front. I do allow pets for all applicants. with the doubled security deposit and pet deposit I feel well covered.
Good luck @Justin Green !