I have students applying to live in an apartment and their parents pay. One parent is paying the bills and has a good income from a business and investment dividends/annuities, but their credit shows a state tax lien with a low 600s credit. Prior landlord said they've always paid on time.
Would you rent to a group where one of the cosigners has a state tax lien on their record?
@Rich C. Usually I would say yes, but the circumstances of the tax lien and the co-signor's efforts to redeem would guide my decision.
- What type of property is delinquent on taxes? Is it the owner's primary residence or an investment property? If primary residence, the delinquency is more concerning.
- What efforts has he made to pay it off?
- How big is the lien?
Unless you think the parents are in severe financial distress and simply don't have the money, I would think that paying their kid's rent while the kid is at university is pretty high up there on the priorities list.
I am imagining how the late rent scenario would play out: Student calls mom and dad crying, asking "I'm getting evicted right before exams because you guys didn't pay the rent???" The vast majority of parents are going to use every available dollar to pay.
I would be more concerned about the parents' willingness to pay repairs when their kid has a party and wrecks the house.
Matt Schelberg Thank you for the reply. We did some digging and just confirmed that the lien is for state income taxes levied while the cosigner wasn't living in the state and is in the process of being taken off the credit report, so it seems that it is a non-issue. Thanks again.
@Rich C. Glad to hear it! Sounds like you are in property management? How often are your student renters late on rent compared to other types of tenants? I hadn't really considered it before your post, but I would think university students are generally good tenants. Would be interested to hear your observations.
most of my tenants are 20-30 years old, mainly young professionals and students. I generally don't ever receive late rent because I use the Venmo payment system for electronic rent payment, which virtually every young person already uses. If they don't send payment by the first, I am on them and typically receive it within 3 days of the 1st. What I like about students and rent payment is that they typically need to stay for the year...whereas I've had occasional issues with young professionals needing to leave early or on one occasion skipping town without paying rent. The issue with young students is that they are immature and can't take care of simple maintenance issues themselves, such as tightening a screw. And you are also dealing with a parent...who often is outraged at their child's high utility bill. So you can generally assume the rent will come in but the property management will be more hands on. Without question, my best tenants have been military/airforce/navy and I would take them over any candidate in a heartbeat.
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