Would you rent to this potential tenant?

Question

The good:

Clean cut, well spoken, has 2 verified sources of income (one is a transportation business he owns) and meets our income qualifications, good payment history for the past 2 years according to credit report, good communication with me, jumped through all of my hoops.

The bad:

While the past 2 years are "clean"....Chapter 7 Bankruptcy in 2013, Eviction (says he co-signed with a girlfriend), 2 divorces (which led to bankruptcy) and a "failure to operate vehicle with license" on criminal report.

Says he is looking to move to "save money". This is a 2/ 1 zero lot-line attached.

This is my first ever property and I wanted your thoughts. I appreciate your wisdom on this.

Alexander Felice · Answer

I might rent to him. If I got a good feeling from the guy, I would absolutely forgive an event from 4 years ago.

5 years ago I didn't have a dollar to my name, had some (ALLEGED...) trouble with the law, and would have probably be a bad tenant. Now I'm the exact opposite, people change all the time.

To be clear though, people are just something I'm good at. I can read people well, quickly, and I know how to manage them and expectations of both parties. So tenant troubles aren't usually difficult for me anyway. This is why I wouldn't be as concerned.

If you fear the tenant could become a problem and you can't/won't handle the headaches then definitely PASS.

Amanda Hensley · Answer

That eviction is too soon - this tenant would not meet my criteria.

Randy E. · Answer

Oh, I thought it was in 2013.  Four years ago is still fairly recent.  I might be tempted to give him the benefit of the doubt, but he has so many other red flags.  Also, the excuse of blaming other people for his problems shows a lack of personal responsibility that I take as an indicator of being a poor rental risk.

Michael Barbari · Answer

@Matt Ransom

You definitely don't want a head ache with your first tenant. There will be plenty more to choose from. Good luck!

Matt Ransom · Answer

I really appreciate all of you taking the time to help a newb. Biggerpockets.mysmartmove recommended that we "accept" this potential tenant and that was what made me stop and think. I think mysmartmove accepted because of his recent track record. I have other prospects and I will move on. Your thoughts are invaluable.

Richard C. · Answer

No.  Not for any one thing, just for the totality of things, which demonstrate a certain level of instability.

Darryl Young · Answer

I believe your gut has already told you the answer...

Mindy Jensen · Answer

@Matt Ransom, is he your only prospect?

Since you are new, you have to decide what criteria you will use to determine if an applicant is acceptable. To avoid being seen as discriminatory, you must apply the same criteria to every tenant.

That said, I think you should pass on this one. You are (or should be) in this to make money. An applicant with red flags should be avoided if you have other applicants to choose from. One thing that many new landlords don't know is that it is far better to lose one month's rent due to vacancy, than to lost multiple months rent due to eviction and repairs.

If your applicant has a reason for everything negative on their report, they will most likely have a reason every time the rent is late.

Some criteria that keeps popping up in the forums:

Tenant must make 3X rent.Tenant must be able to come up with entire security deposit plus first and last month's rent.No evictions. None. Not a few years ago, not decades ago. None.All adults over age 18 must fill out application and submit to background check. Zero criminal background.Credit score above 650 and preferably above 700.

Different markets have different tolerances, and individual landlords have their own tolerances as well. Make a list of what you are looking for, share it with all applicants before they fill out an application, and let them know you stick to it. A little bit of work upfront can help save you a ton of work after they are in possession of your house.

Check out How to Rent your House: The Definitive Step by Step Guide.

Matt Ransom · Answer

Thank you. The eviction was 4 years ago. The traffic violation was 5 years ago. Still too recent?

Thank you BP community!

Would you rent to this potential tenant?

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