I'm hoping someone has run into this before. I have a SFH that I just put up for rent on Craigslist. I received a response from a prospective tenant who says his family owns a company in the area and he gets money put into a trust fund every month. He just opened a new business with a partner and the income from that is low. He says he would pay the rent out of the trust fund and that he has paperwork to prove he has the trust fund.
My question is how do I know that the paperwork he gives me is real? Has anyone had a tenant like this before and can give me advice on how to do due diligence? I already plan to check his documentation, call his previous landlord (has been there several years but now needs a bigger place), do a credit check and background check. Thanks for any advice.
Ask for the bank statements to verify the deposits.
Trust fund...new business, sounds like the tenant is doing great, you must have a very high value rental, what's the monthly?
I had a tenant a couple of years ago that had a trust fund. They are normally run by trust attorneys. I called the attorney and talked to him personally. He confirmed the trust fund and the attorney paid the rent for the tenant directly from the trust fund. The attorney and the tenant both signed the lease.
I also did a background check on the tenant and all was good. He was going into firefighter school (or whatever it is called) and was a really nice guy. He was one of my best tenants ever. I hated to see him go when he got a fire fighting job several hours away and had to move.
I had a similar situation to Michelle's. A potential tenant with a trust fund and no income wanted to occupy the largest apartment in one of my buildings (a 3-bed, 2-bath) which was also the most expensive at just shy of $3,000. I talked to the person administering the trust and they provided proof of sufficient funds for the duration of the lease (over 12 months).
I ended up accepting him and there was never any issue with the rent - the trust wired it in like clockwork 2-3 days before the 1st. Unfortunately, the tenant was not a high quality one and proved to be less than a perfect fit in the building which has all families on the other floors. I ended up not renewing their lease but that is also because the area supports A+ prospects and there is always demand from fairly high income prospects.
As in all situations, do your due diligence and screen, screen, screen.
Hope this helps
I really appreciate all the responses. I guess it's not unheard of at least. It just caught me off guard. He seems like a very polite person, which is a good start, and I plan to do a lot of screening. I especially like the idea of contacting the trust attorney.
The property is in a vacation area and therefore there are a lot of weekly rentals, but not many full time rentals for people who live/work there, so year round rentals are in demand.Thank you for all the ideas.
@James Baltayan We are in a similar situation with a perspective tenant. How did your experience work out?
I appreciate all the feedback on this thread-- I have similar situation however my unit is a 'no-frills' efficiency in Omaha NE that I am estimating will rent at $450-475. I feel as though the combination of an economy unit and no job is a glaring red flag... seems as though the experiences above are consolidated to high value / vacation units. I suppose carrying on with the above vetting if I want to consider?