Who Qualifies With You As A Tenant?

14 Replies

First of all an "APPLICANT" must be COLLECTIBLE !!! 

 (Someone you can sue and have a good chance of collecting).

This means they must.......

  • *Have a Job
  • *Pay their bills on time (look at their credit report)
  • *Must make at least three times the amount of the rent.

(These are just some)

Now if an applicant is questionable, then there is nothing better than a good Ole' CO-SIGNER!

The co-signer must also be COLLECTIBLE and have the same qualification to qualify as the applicant who plans to be the tenant.

POSSESSION OF THE HOUSE

Every person who will be in Possession of the home, that is of legal age, must be on the lease and must qualify, therefore be COLLECTIBLE, or have a Co-signer.

AND ALL OCCUPANTS

When you type up a lease you should always have on all legal forms the tenants names and these words "AND ALL OCCUPANTS. "

Because if you don't have the words AND ALL OCCUPANTS and you evict only the people's names that are on the lease, then guess what?  The only people that will be removed from the house are the people you named on the Lease and not everyone in possession of the house.  (However, not many people know this and so they leave when the tenants receive an eviction notice.  However, if someone wanted to test this fact, all they have to do is say, "Hey, my name isn't on the lease or the eviction papers, and I live here, and I'm not leaving, and the Bailiff couldn't evict them until the landlord filed for eviction on these unknown occupants who are in possession of the home.  (See Pacific Heights-the movie)  People who are in Possession of the home without a lease agreement, or listed as Occupants, are "Squatters".  

Therefore, when you add the words "And All Occupants" you are evicting everyone in possession of the home, including the dog!

Just a little tip.

Nancy Neville

  • No smoking--(they must sign that they do not smoke, many will say they don't but actually do)
  • No pets
  • Clean criminal background check
  • Excellent rental reference. My questions to current/former landlords:
    • "How many late payments has tenant had in the last twelve months?"
    • "Have you had any complaints about the tenant?"
    • "Have you had any difficulties or incidents with this tenant?"
    • "On a scale of 1-10, how would you rate this tenant?"
    • --if less than a ten, I ask why.
    • "Is there anything else I should know before renting to this tenant?"
  • Ability to pay deposit at contract signing
  • Steady work history with income 3-4x rent depending on rent amount.

These requirements (except income & work history) are checked on everyone over the age of 18 who will live in the unit.

OUR CRITERIA:

- No previous evictions

- No felonies

- Credit score minimum 650

- Documented Income of at least 3 times rent amount

- No current or pending lawsuits (check civil and criminal court records)

- Must obtain renter's insurance prior to move-in

- Rental application must be complete, no blank spaces, and no lies (we check every piece of information they give us)

WHAT WE REQUIRE TO COMPLETE THE APPLICATION

- Completed rental application

- $100 non-refundable application fee ($150 per couple)

- 1 month rent as money order to hold property (refundable if application is denied)

- 3 most recent paychecks / pay stubs

- 3 most recent bank statements reflecting paychecks deposited

- contact information for current employer(s)

- contact information for previous 2-3 landlords

- Copy of driver's license

You can view our Rental Criteria and Tenant Screening Questions by downloading them from the BP File Place. (Resources: FilePlace: OtherDocuments)

The tenant application process for us has some distinct parts, which at each juncture narrows the applicant pool to the most qualified. 

Advertising:  It starts with how we advertise the unit and by stating some key rental criteria in the ad. 

Inquiries/Interview:  Then with how we manage the inquiries and what we discover during an interview. 

Showing: If the prospective tenants pass that stage, we invite them to see the property, at which time we observe and find out more about the prospective tenant. We then give them an application and a printed copy of our full rental criteria. We ask them to call us when they complete the application and arrange to pick it up, hopefully by stopping at the place where they currently live and observing what we see there.

Application Review: We review the application with the tenant, verify their id, and ask more follow-up questions if something is not clear. Then we take the application back to our office and verify that all the information on the application is correct. We begin by calling previous landlords and employers.

Background Checks: Then we send out for reports on credit history and legal history.

Decision to Rent or Decline: We either offer to rent and negotiate a move-in date, or we decide they do not meet our minimum criteria to rent and deny them. If the latter, we follow up by mailing them an "Adverse Action Notice" as required by our state.

I did not accept co-signers.  Even for students.  I wanted to only contract with the tenant.  if your ads say you don't accept co-signers, it weeds out a lot of bad tenants without having to waste your time with them.  The only tenants I would let move in, who didn't have their own income was students in good standing, and I verified this.  Then, I didn't care who paid their rent.

Other than what others have mentioned above, I also did not rent to anyone who showed up late to an appointment with me, or did not do what they said they were going to do.  I'd give them a window of around 15 minutes, and if they didn't then call me to say they were so sorry, but stuck in traffic, etc., I automatically did not rent to these people.  They do not value my time and expect me to adjust my schedule to suit their whims.  These people make for high-maintenance tenants.  

I also didn't rent to someone who I didn't personally meet, unless they were someone relocating for a job or to start college, and we did everything long-distance.  But, if someone shows up who is so-and-so's cousin, who they sent because they had to go get their nails done instead of picking up an application themselves, etc., I didn't rent to them.

Basically, anything that gave me a red flag that this person won't be responsible or respectful.  I was a very nice, easy-going manager overall.  But, I'm not your mom and I'm not going to sit around waiting for you.  These are the same types of tenants who will park their cars crazy, and take up two parking spots, or play their music loudly and disturb others - they are not aware of, or care how they affect other people.

I also told applicants once that I needed them to completely fill out the application.  I looked them in the eye when I said it.  If they didn't, I did not rent to them.  I'm amazed how flippant some people are about filling out an application, as if I'm being so unreasonable.  I'm not going to force you to be accepted.  Again, this is someone who feels that me and my silly little rules and requirements are beneath them.  They will be bad tenants and neighbors, because they don't think they should have to follow rules.

If someone calls me in response to an ad and they sound drunk, or if I can hear someone swearing in the background, or fighting and arguing, or someone is telling them what to say, I don't rent to them.  I wanted mature, responsible, respectful adults.  And there are plenty young first-time tenants who fit the bill, too.  It's not necessarily age-related.

Wow, scary. Only one person mentioned a credit score.

I'm going to get on my soap box now so bear with me. This is important.

There is a direct correlation between how a tenant will behave in the rental and their FICO score. By behave I mean pay rent on time, not damage the property and respect the home, neighbors and the landlord. We require a credit score of 630 or higher for apartments and 650 or higher for condos, houses and townhomes. 

Pulling a credit history only gets a landlord so far because they are doing a subjective judgement call to place tenants rather than relying on the hard numbers (FICO score) set by an impersonal computer. Setting FICO score standards will help you find great tenants. 

In addition, having written policy on what FICO score you will accept will keep you from being accused of discrimination. A credit history won't do that, nor will calling the last landlord because that activity calls for subjective judgements. If you are taken to court on discrimination charges, the judge will probably rule against you if you use these to pick tenants. At the very least you will have a weak case.

Protect yourself, your rentals and your business by using FICO scores to qualify tenants. 

Don - owner of a property management company that manages 140 doors. 

P.S. Using FICO scores have helped us to only have to evict two of our renters out of thousands in the last 10 years. This speaks for itself.

FICO SCORE

That is the Key Word for banks and other lending agencies to determine whether they should loan you money or mortgage loan or a car loan, etc.    However, I don't believe it suits our Industry. The reason being, a roof over one's head is usually more important than paying their bills. 

Part of my speech when I sign the lease with my tenants is that I chose them because they paid they bills on time.  That I don't except any excuses for rent not being paid or late.    That rent should be the very first thing they pay when they get their pay check. 

I tell them that without a roof over their heads, they have no place to sleep at night, to shower, to live, or to store their stuff.  So paying their rent should be a Priority, and 99% of the time it is.   I tell them that their rent is my paycheck.  That they wouldn't like it if their boss said I can't pay you today because my car broke down or my mother passed away.  You worked hard for that money, you need the money, and so do I.  I tell them that without their rent, I can't take care of them, I can't take of their repairs.  That their rent check is what takes care of them and me. 

Of course you will have those that don't pay their rent or anybody else.  But that is way I choose applicants that are COLLECTIBLE.

When I run a credit check it's not to see their FICO Score.  I want to see the landlord/tenant Judgments they have against them.  I want to see if they pay their utilities.  I want to see how bad their credit is or how good.  

I could care less about a SCORE.  There are two things that most people will pay first, their Mortgage (or rent) and their cars.  So a Score Figure doesn't matter at all, it's just a figure, just like someone's age is just a number.   I want to know how they live.  What's going on in the report, what's going on in their life.  A figure is just a figure.  But when you read a credit report in all it totality, it tells you more than just a figure.

So..that's just the other side of the story. and only my opinion.

Nancy Neville

I disagree with @Don Glasgow regarding credit scores. I have not found them to be a good predictor of a good tenant. I have had several divorcees with terrible credit scores who turned out to be ideal tenants. European transplants for whom I was the first landlord in America--paid in cash, extremely clean. Also, some young folks who had just landed good jobs after college. 

Interviews with former landlords and employers are far more valuable. Also, a wise landlord once advised me to judge a tenant by the car. Is the car clean, well-kept, or trashed? How they keep their car is how they will keep their home. I admit I now keep an eye on the car when an applicant shows up for a viewing.

 In the area where I am, the type of tenant that will pass the requirements of @Chris Kennedy are most likely folks who are moving here and will be moving out soon when they buy a home--this may be different due to the market economics in a FL or CA. 

I prefer tenants that have a longer term perspective.

I just added "all occupants" to my lease!

Good Job Chris!

@Steve Rozenberg right now the tenant pool is so strong that new tenants need to show they can pay the rent (job or plenty of cash), excellent credit score, pass a tenant screening w/o problems and be able to pay all the deposits etc. 

Sorry I came off a little strong on how we do business and FICO scores.

None of the properties we have would be considered low income. We have been very careful to take on only the nicer rentals to manage. How we qualify our tenants works for our types of properties. 

I'm aware that we probably turn down good tenants with low credit scores. We have our policy so that we don't have to think about how we chose. It has worked for us quite nearly 100% of the time.

Perhaps my way of choosing tenants should be filed away by the people on this board and taken out and dusted off when the right time comes along.

Thanks for the feed back.

Don

Don, there is nothing wrong with your opinion and that is what is good about having a forum like this.  We get to read other people's views, experiences, what works for them. 

Your method has worked for you, and I know a lot of Landlords who use your method,  and many landlords use my method as well.  But how do we know what method works best for us, if we don't know of other "methods" available, by people like you and me and everyone who posts on here?

Never feel like you "came on too strong", or your method of doing anything may not be what the majority of people feel about it, because it's people like you and me and everyone on this board that makes us better landlords.  

Life changes.  My method may not work in today's world.  Your method may not work tomorrow.  But everyone's idea's and experiences shared on here, educates us, and it's up to us to choose what method we want to try and what methods really work. 

So Don, I for one, enjoy your posts, and I come on here and feel strongly about a lot of topics and speak my mind and maybe not everyone agrees with me.  But you know what, If I had helped at least one person on here with what I write, then that mean a lot to me.  And you know what?  You've got 15 votes so far and that goes to show that 15 people agreed with you, not to mention the people who don't vote, which I'm sure there was a lot of them who agreed with you..... 

So I look forward to your next post!

Nancy Neville

If I were a tenant and had the sort of credit scores and backgrounds you are all asking for I wouldn't be renting from you, I'd be buying.

I would always try to visit a tenant in their current abode. How they live at the moment can speaks volumes more than what pieces of paper they can assemble.

I've said elsewhere I find punitive ($100 non-refundable) application fees abhorrent.

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