Which tenants would you choose?

Question

Debating on which tenants you would choose. Leave your feedback! We have amazing 1st floor tenants and I think we are comparing everyone to them which is sort of hurting our judgment on people.

Tenant A:

• Young couple (mid 20's) with a child who is about 9 months old
• Make over 3x rent requirement and have 600+ credit score
• have been living on their own with rent less than what mine is
• only guy works, girlfriend does not
• They want to move in for July 1st (because they want to give their current landlord 30 days notice, plus need to have time to get money to move in - first, last, security)
• No major red flags here, pretty basic couple

Tenant B:

• 18 year old fisherman and his 17 year old girlfriend/fiance
• Have been living on their own, paying $200 more a month for rent (looking to downsize)
• He makes anywhere from 2-5k each trip out, which would be more than enough to cover rent, she works at Taco bell, but really she doesn't even need to work in order for them to meet income requirements
• very enthusiastic about moving and will literally move in tomorrow if they could. 
• Spoke about having the cash and all the nice things they own and no problem paying rent, etc.
• He can verify his income as he gets paystubs and taxed on his earnings
• seem like they could be a little immature and don't want to push out my awesome 1st floor tenants

Thoughts?? Any input would be great!

Thomas S. · Answer

I would not choose either and would continue looking.

Tenant A will end up costing you your down stairs tenant due to the noise of the baby and they do not have any money regardless of their income. They will be a problem collecting rent.

Tenant B is extremely unreliable due to age. They will be a never ending string of problems due to lost jobs etc. and when they split up, and they will, they will both want to leave.

Both A and B would be on the very bottom of my list of acceptable applicants.

Michele Fischer · Answer

I would not take B, and I would only take A if you could work out an earlier move in date.

Tenant A:

#1 & 4 are irrelevant to me

# 2 & 3 are good, but how long is their rental and work history AT THE SAME PLACE?

#5 As noble as it is to give proper notice, I will not hold a unit empty that long.  Get creative.  How soon could they have 70% of move in money, installments for the rest.  Can you offer a reduced rate for June to get them in sooner and offset that month vacancy?  That would also reduce move in money amount.  Sometimes I lay out different move in dates and payment options to let them see on paper that maybe they could move in earlier.

Tenant B:

#1 is red flag because girlfriend is not old enough to sign a contract.  This is a valid issue, not renting to them because they are young and immature in itself is not a good reason.  Document what in the conversation and actions demonstrate that they might not be a good fit to avoid age discrimination charges.

#2 for how long?

#4 Move in tomorrow is red flag, have you reached the current landlord?  Have they given proper notice, are they working with them?  If they screw current LL they will screw you.

#6 if you can't verify the income don't count it.  If they don't claim the money for taxes they are dishonest.  Her income is irrelevant if she is under age.

Keep looking, better to have it empty a little while to find a great fit.

Anthony Angotti · Answer

I would pick tenant A. The couple seems like the income would stick a lot better. In my experience couples with children are tied together more. If the fisherman guy bails you have problems. Also seems like tenant A would have more of a reason to have the business in order.

Robert P. · Answer

just an update on this....someone better than the two came along and ended up choosing them over both of these applicants. I appreciate all of the help. It actually allowed me to wait a bit longer which in turn lead to these new tenants! BP for the win!

Thomas S. · Answer

You actually can decide to reject a applicant for any reason you choose provided when challenged in court you can show the applicant you did pick was better qualified. However you are also within your rights to reject because you had a bad feeling. Provided you do not say the feeling was you would be murdered in your sleep because the applicant was a convicted murderer.

Bottom line is you can discriminate to protect your business interests provided you have an alternate  primary reason for rejecting the applicant. Keep looking till you find a reason then it will not be  discrimination.

Robert P. · Answer

I appreciate all the input. I definitely have requirements that everyone should meet and don't intend to discriminate on any protected classes.

I think I have made my decision....keep looking!

Nathan Miller · Answer

With no additional input, I would choose Tenant A because I believe they would care for the house better and not interfere with the neighbors.  Adding to what Jered said, you can set criteria to reject on felonies, but most states limit that to 7 years.  Unfortunately that means if somebody is a murderer, rapist, or convicted of other horrible crimes more than 7 years ago, you can't deny them for that reason.  Yes, our government feels it necessary to protect these classes for some reason.  It's mind blowing.

Thomas S. · Answer

Don't place too much emphasis on "protected categories". Landlords must always put their best interests first. Never select any applicant that you know will be a bad fit out of fear.

Choose the tenant that is best for you and your existing tenant.  Always put your best interests first. No one will ever know why you rejected a tenant because you are never going to tell anyone.

Jered Sturm · Answer

The most important thing to note from this post is the fact that some the information you are using to make your decision is protected under fair housing laws. If you reject a tenant based on any of the protected categories you could face a discrimination law suit.

The federal Fair Housing Act of 1968 and the federal Fair Housing Act Amendments Act of 1988 prohibit discrimination on the basis of the following criteria (called “protected categories”): race or color; religion; national origin; familial status or age—includes families with children under the age of 18 and pregnant women; disability or handicap, or sex.

For example you mention tenant A's age and the fact that they have a young child. By law your tenant selection process should not be effected by these things.

Also It is my understanding that a minor (tenant B's 17 year old girl friend) can not be legally bound by a contract in your case a lease so you would most likely not be able to include her on a lease. Check your laws.

You mention a credit score for A but not for B. In our screening we heavily weight credit score in the choice.

To prevent from any chance of discrimination accusations, and systematize our screening process we have minimum requirements such as:

Minimum Requirements:

•Monthly gross income at least 3.5 times the monthly rent

•NO convicted felonies

•NO sex offenders

•Minimum credit score of 600 (check yours for free at creditkarma.com)

•NO previous evictions

When we get several applicants that meet the minimum requirements and cant decide because its too close we will use the equation below. The tenant with the highest score gets accepted. Its a math equation on non protected characteristics that we find important in applicants. Math cant discriminate.

Attached is a visual of the equation I mentioned (click on it to enlarge). We obviously have a spreadsheet of where you simply plug this info in and out pops a score. This is just an easy way to show you here.

Good luck with your selection.

Stephen E. · Answer

Tenant A looks pretty good to me. Income and credit references check out, they seem stable from what you have said. Young families are less likely to jump around from one unit to another, so they may be there for a while, potentially lowering turnover costs.

Tenant B has verifiable income but the issue of the minor complicates matters and the eagerness to mvoe in yesterday is a red flag. I would pass on these tenants.

Which tenants would you choose?

Most Popular Reply