How do you consider multiple applicants

Question

Hi,

I put my house on market Thursday and got a ton of interests. I have been doing my research on BP for sometime now and have been following some best practices.

I am asking all prospects to fill out a pre-screen survey prior to scheduling a viewing. Got a few back, and a couple of those are for 3 or more young professionals who want to share the house.

In this case, would all of them be on the lease such that they would be responsible for the rent jointly and individually? Would I assume that each contributed to the security deposit equally? Does the above apply to non married couples as well (boy / girlfriend, engaged etc.)?

If it were you, would you ask for more by way of security deposit in this case?

Also, any thoughts on renting to groups of young professionals? Assuming you had your pick of tenants, where would this group fall?

Thank you,

satha

Michael R. · Answer

I guess it depends on the girls!  But I've worked in retail and when I used to clean the bathrooms at the end of my shift -- the girls bathroom was always dirtier than the boys.

To your question about income -- given the constraints that can arise in a group tenant situation - I would think that each individual tenant would need to meet the 3X rent rule -- that way, if there were say - 3 tenants -- if two had to move to another city -- that in the worst case scenario the last person standing would be able to afford the place on their own.

I'd be interested to hear what others have to say on this.

James DeRoest · Answer

I would avoid roommate tenants. Total pain in the ass as they ALWAYS fall out with each other.

"Bob has left but do we still need to pay his share?" "Steve never washes his feet" "can you remove Stuart from the property as he plays loud music at night"

Just goes on and on.

Account Closed · Answer

You should check the laws for where your property is.  For instance, in CA, you can't require them all to individually meet the requirements.  In CA, you have to let them pool their income to meet the requirements.

I would not ask them about their relationships with each other.  That could get you into hot water with fair housing.

Don't ask for more security deposit, as that can also be viewed as discrimination.

Yes, your lease should name them all, and say they are all jointly and severally liable.  They need to provide you with the security deposit in full in one check.  Who pays what and who gets it at the end of the lease is between them.  But, your lease should say how the deposit will be returned.  I suggest you have them designate which tenant will receive the deposit refund, but put in the lease that you will name all roommates on the refund check, and it's up to them to work out cashing it and divvying it up.

My experience with renting to techies in Silicon Valley, who wanted to room together, was they were usually Indian men.  They were great tenants.  They were living together to save money and for company.  The worst thing that happened to me, was that they'd sometimes leave and replace a tenant without ever telling me.  Once I ended up with an apartment that no longer had any of the original tenants living in the unit!  But, I admit that the rent was always paid on time, and there were no problems.

What I did, though, was I only had month-to-month agreements.  That way, if there's any issues, or if they want to change roommates, it's easy to adjust everything, or even kick them all out.

Satha Palani · Answer

Michael Roy Exactly what i told my wife. Sadly you can't tell these things for sure until they move in .

The house rents for $1550/mo. A young professional making 3X that could easily rent a decent 1br for between $800 and $1000 in the city i am in; without the hassle of having roommates.

My guess is these girls will be making  anywhere between 25K and 35K  / year. If i were to apply the 3X rule to them individually that would disqualify them.

Satha Palani · Answer

Interesting perspectives. Thank you. I think I will schedule a  showing and have all 3 of them come over so that I can talk to all of them. My wife seem to think renting to a group of girls may me better vs. boys.

In terms of income, should i be looking for each of them to make at least 3X their porting of the rent? In this case that would be the equivalent of one months rent

Thanks,

satha

Dan C. · Answer

@Satha PalaniAs far as how that type of tenant would rate, in my personal opinion very high.  I have one location that routinely attracts young professionals and they consistently are great tenants.  I would say the biggest downsides to them is a) they are not handy or experienced at running a household, so they call for every minor little problem b) you end up with a much higher rate of turnover.  For me they never stay longer than 2 or 3 years, they are always moving to different towns for there careers or getting married.

Brie Schmidt · Answer

@Satha Palani

- Congrats!  If I were renting to roommates I would set it up so that they are all all the lease and jointly liable.  So if one roommate can't pay rent it is up to the others to cover it and deal with it internally.  How they split their portion of rent and SD is their problem, but you want to make sure it is delivered to you in full with one check.  That makes them responsible for collection from each roommate.

I would ask questions about their relationship with each other.  Have they lived together before?  Do they all work together?  Are they childhood friends?

I have a few landlord friends who has called for advice when the living situation wasn't working out and they wanted one roommate to leave mid lease and were involving the landlord to solve the problem

How do you consider multiple applicants

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