Investor · Lansing, MI · Member since 2014 · 86 posts · 31 votes
Experienced landlords and property managers, I need your advice and opinions.
If you had to prospect tenants to pick from, which would you pick?
Applicant 1: has an eviction from 2 years ago, with a writeoff of nearly $3k from the apartment he was evicted from. Everyone evict has a sob story, and this one is no exception, but bottom line is there's still an eviction on his record.
Applicant 2: couple who's husband has 2 felonies from 2 and 4 years ago, both for cocaine possession.
Both are equal in other areas (income, rental histories, mediocre credit).
Would a vacant unit be better in this situation?
Look forward to your experiences with renting to felons and evicts.
Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
11y
The one with the two recent felonies would not meet our minimum criteria to rent. No go. Besides, the chance of that tenant reoffending is high. Drug users also bring unnecessary drama to a property and usually have more undesirable behavior that goes along with their lifestyle.
The one with the eviction would meet our minimum criteria to rent if they had only one eviction and would make full restitution to the previous landlord prior to renting from us. We would also require an additional security deposit. But, prior to making our decision, we would also look at the circumstances that led to the eviction to determine if they were high risk or low risk at this point in time.
Investor · Muskegon, MI · Member since 2014 · 71 posts · 29 votes
11y
Personally I would go with the felony couple. I don't think I would trust that guy with an eviction. He already popped his eviction cherry, so he's likely to do it again.
Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
11y
honestly I won't rent to either but I can in my market! I have class a properties and appeal to professionals.
That being said, who's your market? Who do you hope to appeal too? If your appeal to a lower class than I might choose the felony but honestly both makes me hesitate. Felony from liability potential and eviction because those are expensive and I don't want to get "bitten".
Investor · Baltimore, MD · Member since 2012 · 1k+ posts · 655 votes
11y
I would definitely let my house sit vacant before renting to either. In my area an eviction takes some time so if a person stayed in the home long enough for the full evicton process to play out then I wouldn't want to deal with them. Someone who knew they couldn't pay and moved out well before it got to the sheriff coming to put them out I "may" consider.
As far as the 2 time felon that's a definite no. I'd be skeptical of one felony but 2 is telling me something. Not to mention their employment options would be limited and I wouldn't want any risk of the police tearing up my house because they were serving a warrant for his 3rd felony.
St Thomas, Ontario · Member since 2013 · 575 posts · 408 votes
11y
Eviction and stiffing a landlord make candidate number one a no go. I would not go for candidate number two either. I had a tenant who had what I understood to be a minor possession case on his record, several years earlier. I gave him a chance and let him in. Two months ago the police came with a battering ram, knocked down the door and hauled him off after finding $10,000 worth of drugs together with scales and other drug dealing paraphernalia. Trust me, one or two month's rent is not worth risking headaches of this nature. You can't assume that these people are going to go on the straight and narrow path. All you have is evidence that they have been involved in drugs and have been convicted. The best guide to future behavior is past behavior. There are better applicants and you should find them.
Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
11y
The one with the two recent felonies would not meet our minimum criteria to rent. No go. Besides, the chance of that tenant reoffending is high. Drug users also bring unnecessary drama to a property and usually have more undesirable behavior that goes along with their lifestyle.
The one with the eviction would meet our minimum criteria to rent if they had only one eviction and would make full restitution to the previous landlord prior to renting from us. We would also require an additional security deposit. But, prior to making our decision, we would also look at the circumstances that led to the eviction to determine if they were high risk or low risk at this point in time.
Investor · Lansing, MI · Member since 2014 · 86 posts · 31 votes
11y
@Jim Zatko Thanks for your input. I agree with you, believe once someone's been evicted, they are less afraid/concerned about being evicted again.
@Stephen E. I agree with you. As far as finances are concerned, an eviction is worse in my mind than a felony for having possession of cocaine.
Thanks everyone else for your inputs. This particular property is in a B- neighborhood. I particularly like the C/B class neighborhoods - rents are not far from class A neighborhoods, taxes are about 1/2 of A neighborhoods, and my all-in cost to acquire properties is about 20% of A neighborhoods. As far as buy and hold goes, my COC ROI in C/B neighborhoods can be triple or quadruple of what my A neighborhoods yield.
Having said that, I do have to be real careful on who I rent to.
Update on what I did: I decided to go with the couple where the husband has a drug possession felony. The felonies were 6 and 9 years ago, when the husband was 18 and 21 yrs old, respectively. To compensate for my higher risks, I increased the rent by $200/mo. To encourage the couple to be good citizens, I also offered to return the $200/mo surcharge in the form of a $2400 rent credit towards a lease renewal if during the entire time of the 12 month lease they are never late in paying rent and no record of police visits to the house.
I do like to give people the benefit of the doubt and a chance to live in a nice property (our properties are among the nicest in C and B neighborhoods). Although I won't hesitate to enforce every detail on the lease agreement and evict if warranted. The couple realizes that they probably won't be able to rent again (at least not a well-kept property) if they add an eviction to their shaky past. I also hope, and believe, that the husband has become more responsible since age 21.
Revive this post in 12 months for an update to see if I made the right decision to give this young couple another chance. :-)
Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
11y
So were the felonies from 2 and 4 years ago or from 6 and 9 years ago as per your later post? It does make a difference. So does their current age. Hope you made the right choice, time will tell. We rent B and C properties too, so we have given second chances. Many of those tenants prove worthy, but do require diligence in making sure they abide by the terms of the rental agreement. Good luck!
So were the felonies from 2 and 4 years ago or from 6 and 9 years ago as per your later post? It does make a difference. So does their current age. Hope you made the right choice, time will tell. We rent B and C properties too, so we have given second chances. Many of those tenants prove worthy, but do require diligence in making sure they abide by the terms of the rental agreement. Good luck!
For some reason I thought the felonies were was 2 and 4 years ago. But upon a review of the criminal reports, they were actually from 6 and 9 years ago. Which did make me re-think about the candidate since he was 18 - 21yrs of age during those felonies.
Real Estate Investor · Chicago, IL · Member since 2014 · 286 posts · 159 votes
11y
I would never go with an eviction, because they know the game now and all the players and they know that, at the end of the day, they get to live for free for several months. Also, eviction shows they stayed until the bitter end. I like what you did for the felony people. You gave the chance, but with consequences. Good idea.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
11y
I agree with @Nancy Curran, unless the tenants weren't actually evicted, but had a filing, and you spoke with the landlord. I have a tenant of 3 years now that had an eviction filing from her previous landlord, but they both had the same story and it was due to the tenant's job loss. She left before the court date.
But I only considered it for that one hard-to-rent property; for our others, there is a much larger pool of tenants to choose from.
I would never go with an eviction, because they know the game now and all the players and they know that, at the end of the day, they get to live for free for several months. Also, eviction shows they stayed until the bitter end. I like what you did for the felony people. You gave the chance, but with consequences. Good idea.
There is a difference between an eviction and unlawful detainer in our state. Eviction means removing a person and their belongings from the premises via a legal process. Unlawful detainer means they stayed past the period that they were legally allowed to stay. It is the unlawful detainers that end up before a judge at the courthouse. Those are the evictions that concern me most.
In our jurisdiction, even if a tenant is evicted and unlawfully detains, it is less than a month from the time of posting the legal notice to Pay Rent or Quit to the time of sheriff lock out. Even if the tenant "knows the game"... I am confident I know it better and will have the better attorney.
We've rented to people with prior evictions and it has worked out. We've also had an unauthorized occupant with a prior record for eviction and unlawful detainer, who became our tenant by default. When we had to evict her, she unlawfully detained. She was street smart, but not as smart as me. She was out in less than 30 days.
Never say never, but if you don't know landlord-tenant law better than your tenants, then indeed it may not be worth the risk. Also, operating in the Chicago area is a different game, even if you do know the ropes. So I understand your position. :-)
Investor · Cleveland, OH · Member since 2012 · 145 posts · 39 votes
11y
This has too be the oddest topic I've seen in a while...
When has an empty unit ever made since in residential investing..
Go with the one with the eviction make him pay a double deposit and set him up with direct deposit rent pay. Advise him that if he's late one time in the first 12months he'll be evicted and if you have a double deposit that shows that he is serious about the place.
Investor · Fort Worth, TX · Member since 2015 · 109 posts · 41 votes
11y
This might sound insane to some people but I would be more likely to rent to the felon if he were busted with a very large amount of drugs rather than just a small amount.