Potential tenants transitioning from the military in Alaska

Columbia, SC · Member since 2014 · 100 posts · 12 votes

Good afternoon,

I have a question about screening potential tenants who are transitioning from the Military and moving from Alaska. The husband will be receiving his military paycheck until February, but they do not have jobs lined up in North Carolina yet. I have asked for a cosigner who currently has the adequate income to make the rental payment and a good credit score. Do you think adding the cosigner will cover my basis on renting to the couple? I empathize with them being that far away and transitioning out of the military, but I also want to cover my basis making the house payment. I appreciate everyones input.

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Jonathan Taylor SmithBusiness Member

Rental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 840 posts · 801 votes

10y

My thought on a co-signer is that it just puts extra pressure on the primary signer(s) to do the right thing and pay the rent for fear of negative impact on and feedback from the co-signer if not... But ultimately I think this works only when it was likely the rent would have been paid by the person(s) anyway. In other words, I do not think adding a co-signer really prevents a bad tenant from proving to be just that... Co-signer or not, if they don't have a job and can't get one quickly, the rent can't / won't be paid.

Still may be a good idea to get a co-signer, but I'd put primary focus on employment history and bill paying habits as seen on credit report from when they were fully employed. Also, what line of work will they be seeking and is that something readily available in your area? And do they have any existing prospects for employment, interviews lined up, etc... or are they moving blinding and hoping it just works out?

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Jonathan Taylor SmithBusiness Member
Rental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 840 posts · 801 votes
10y
My thought on a co-signer is that it just puts extra pressure on the primary signer(s) to do the right thing and pay the rent for fear of negative impact on and feedback from the co-signer if not... But ultimately I think this works only when it was likely the rent would have been paid by the person(s) anyway. In other words, I do not think adding a co-signer really prevents a bad tenant from proving to be just that... Co-signer or not, if they don't have a job and can't get one quickly, the rent can't / won't be paid.
Still may be a good idea to get a co-signer, but I'd put primary focus on employment history and bill paying habits as seen on credit report from when they were fully employed. Also, what line of work will they be seeking and is that something readily available in your area? And do they have any existing prospects for employment, interviews lined up, etc... or are they moving blinding and hoping it just works out?
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Yvette M.
Reno, NV · Member since 2016 · 328 posts · 97 votes
10y
Is the co-signer in the same city?
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Angela Hollis
Palmer, AK · Member since 2015 · 27 posts · 5 votes
10y
When you say 'transitioning', are you saying getting out of the military or retiring? A retiree will continue to receive a paycheck.
Not sure how legal it is, but you can ask for proof of funds for a couple months worth of rent.
Have you asked them how they plan to make the payments until they receive a new job?
Have you done a background check to see their history of rent payments or credit history?
Open communication is key to any business. Have that discussion with them. Depending on how long they've been in the military, it's can be extremely difficult for that transition and finding housing is one of the most stressful events they will go through.
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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
10y
Why bother with the added risk by accepting a tenant that is a concern before you even start. Mitigate your risk and pass on this applicant. You are wasting both time and money on this applicant as he does not qualify or meet any of the basic requirements for a tenant. No job...forget it.
Is your market so bad that you are desperate to find a quality tenant. If not then you are now wasting your time trying to make a unacceptable tenant fit. This is not the correct process for finding tenants.
If your motivation is due to the fact that they are military then you need to get more serious about your business decisions.
PS. never accept any applicant without doing a credit check. This is landlording 101. If you are not doing it you do not understand the vast amount of information/protection it provides to your business.
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Brandt Smith
Cypress, TX · Member since 2016 · 132 posts · 49 votes
10y
Philip Mullinax move on to another tenant. You are considering taking on a tenant that doesn't meet the basic 2.5 x rent salary requirements.
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Catherine German
Realtor · Sequim WA & Port Angeles, WA · Member since 2016 · 164 posts · 78 votes
10y
check your state laws to see if they allow an out of state cosigner. Contact a local landlord/tenant attorney and they can answer. Of course as the others have said you must run a credit check and see what their rental history has been as well.
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Philip Mullinax
OP
Columbia, SC · Member since 2014 · 100 posts · 12 votes
10y
@Jonathan Smith- Thanks Jonathan. That was my thought as well. I have done this in the past and the tenant seemed to be more responsive to all my emails when I included the co-signer as well. The husband is a truck driver and the wife is a CPA. When we talked about the transition and employment, they have both said that they have had interviews, but the companies wanted to wait until they were here to hire them. They do have savings built up, but I am sure even with the military PCS'ing them they will still have some expenses getting settled. I appreciate your insight.
@Yvette M.- The cosigner would be one of their parents. Both of their families live in town, so I think that would help.
@Angela Hollis- The tenant is getting out of the military not retiring. I didn't think about asking for proof of funds, but that's a great idea. They have said they have a savings built up that would cover the first 4 months rent. I use the SmartMove application through Transunion and they both have good credit, no criminal, or eviction history. I appreciate your insight.
@Account Closed- Hey Greg, I empathize with the guy as I had to transition out of the military and know how difficult that can be. The market is not bad at all. I have had a quite a few people interested in the house. I ran both the tenants credit and they have good credit in the low 700's. I appreciate your input.
@Brandt Smith- Thanks for the advise. I will definitely keep in consideration.
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Yvette M.
Reno, NV · Member since 2016 · 328 posts · 97 votes
10y
You will have to do background/credit check on parents too. Another option is to also make the parents leaseholders vice co-signers. If it comes to eviction having a co-signer is another layer to contend with in the process. You have to decide the amount of risk you are willing to take.
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Philip Mullinax
OP
Columbia, SC · Member since 2014 · 100 posts · 12 votes
10y
Thanks @Yvette M.. I didn't think about potential problems in the eviction process. I thought it would be more straight forward having less tenants to serve.
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