Don't let me rent to this tenant...

Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes

Please tell me I'm doing the right thing.

Right away I recognized the red flags, VERY polite and eager to move in right away. Claims her credit is fine. I even asked if she had collections from past landlords. Turns out she has a collection record just filed against her a week ago from an apartment complex (small amount of $153 but still). She also has unpaid utility and comcast bills as recent as last fall.

I'm in that winter funk where it's hard to find tenants. Sat empty in December and likely will this month too, if not next month. Super hesitant to take this person in, I feel like I will regret it. I thought about charging higher rent and a 2.5 x deposit, but just know this person will be trouble. Drives a luxury vehicle worth 60K, doesn't pay her bills....547 credit score...

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Kyle Hipp

Investor · Appleton, WI · Member since 2012 · 1k+ posts · 464 votes

your gut is right, walk away

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Kyle Hipp
Investor · Appleton, WI · Member since 2012 · 1k+ posts · 464 votes
9y
your gut is right, walk away
3 Reply
Kimberly H.
Residential Real Estate Broker · Chicago Suburbs, IL · Member since 2013 · 1k+ posts · 594 votes
9y
I feel your pain. We have a unit sitting vacant since mid-October, rejected 8-9 apps so far. We absolutely don't take people who owe any money to past landlords. She doesn't sound to have any redeeming factors going for her anyway so I would just reject the app. I am hoping once we get into normal renting season we'll have normal people looking.
3 Reply
David D Painter
Member since 2016 · 143 posts · 157 votes
9y
Why would you consider filling a vacancy with someone who isn't going to pay anyway? No matter how desperate someone is it makes no sense.
3 Reply
Kenneth GarrettPro Member
Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
9y
@Jack B. When I rent to applicants I consider what they tell me and then verify with Credit and Criminal Background checks. The information is valuable but I think your gut instinct is telling you this is a no. The drama that is potential is not worth the aggravation.
I have rented to people with bad credit, but its based on the background checks and the old gut instinct. I do believe in giving people a chance. I have been fortunate that my instinct has been correct up to this point.
Good Luck.
3 Reply
Jennifer A.
Sun Prairie, WI · Member since 2013 · 150 posts · 69 votes
9y
I also believe in giving people a chance. That said, I don't rent to people who lie to me though. She owes money and she's lied to you about it. It isn't going to get any better going forward.
3 Reply
James Barnhart
Rental Property Investor · Ocala, FL · Member since 2016 · 226 posts · 140 votes
9y
You definitely need to do a tenant screening on all applicants. If there are negatives, and there are, do not rent to her. I wouldn't also do it just because you caught her in a lie.
Let all applicants pay for the screening themselves when they apply to the tenant screening company.
1 Reply
Stephen E.
St Thomas, Ontario · Member since 2013 · 575 posts · 408 votes
9y
@Jack B. The best predictor of future behavior is past behavior and I think you know this. This person has run into issues of some kind that have led to debts with her landlord. She also has a habit of not paying her utilities. Unpaid utilities go hand in hand with unpaid rent I am afraid. You know what you should do but seek validation from the board. I have done this before myself. It can be quite tantalising, having a vacancy and feeling you may be on the verge of filling it. But a bad tenant is worse than no tenant, and the evidence makes it pretty clear that you have found a bad tenant.
Do not be fooled by the tenant being "VERY polite and eager to move in right away". Excessive politeness and eagerness are typically signs of a bad tenant on the make. Whenever someone comes to a showing and starts making comments as soon as they get in the door about how fabulous the place is I know there is trouble. The last one who did this applied and had large amounts owing to two landlords showing on his credit check.
Do yourself a favour and end a brief email advising the tenant of rejection now before you flirt with this idea any further.
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Kenneth GarrettPro Member
Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
9y
@Jennifer A.
I'm with Jennifer if they lie about anything its an automatic no. I'd rather wait then get caught up in an eviction. Illinois is not a friendly Landlord so I am very conservative.
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Jack B.
OP
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Update. She offered to pay off the debts to the previous landlord and the utilities, pay 2.5 the deposit (per my request) and $125 more per month in rent along with a parental co-sign. I might be able to make this work for all parties. She pays me enough to cover any likely damages, higher rent as an additional buffer, parental co-sign, AND pay the people she owes money to.
1 Reply
Matt Sicignano
Investor · Smyrna, GA · Member since 2014 · 96 posts · 72 votes
9y
It just depends on your pain tolerance! Do you want the headache of losing income now, and getting over that in a month or two? Or do you want the short term relief of getting a first month's payment, then deferring the headache another couple of months down the road?
2 Reply
Alex Bok
Real Estate Agent · Chicago, IL · Member since 2016 · 283 posts · 71 votes
9y
Definitely a tough decision on your hands... Evictions are often a pain but it seems like that is the best path for the long run
0 Reply
Victor Eng
Real Estate Investor · Wakefield, MA · Member since 2014 · 54 posts · 34 votes
9y
@Jack B.
Don't rent to the prospective tenant. I know the frustration of trying to fill a unit once you hit 45-60 DOM. It is far better to wait and land someone that qualifies. I've made the mistake in the past of settling for a tenant and for all of those "exceptions" I've made in the past with sub 550 credit, I've regretted ever one of them. 100% have had problems.
1 Reply
Stephen E.
St Thomas, Ontario · Member since 2013 · 575 posts · 408 votes
9y
Originally posted by @Jack B.:

Update. She offered to pay off the debts to the previous landlord and the utilities, pay 2.5 the deposit (per my request) and $125 more per month in rent along with a parental co-sign. I might be able to make this work for all parties. She pays me enough to cover any likely damages, higher rent as an additional buffer, parental co-sign, AND pay the people she owes money to.
It sounds like a desperate tenant believes she has found a desperate landlord. Note that what finally prompts her to pay her debts to her former landlord is being under the gun and needing to secure a place. This presumably comes after many rejections from landlords who see the obvious, and that is that if she did not pay her previous landlord what makes you think she will pay you?
How badly do you need this month's rent? My sense is pretty badly otherwise you would see through this ruse. Your comment that "I might be able to make this work for all parties" is particularly troubling and reeks of desperation. Don't let greed and $125 a month cause you do go down this path. This is the kind of assurance that bad tenants can routinely make because it is relatively costless, they know they won't pay. Just how long do you expect her to pay $125 a month in extra rent or indeed any rent? The best guide to future behavior is past behavior and the answer based on that is staring you in the face.
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Jack B.
OP
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Stephen E.:

Originally posted by @Jack B.:
Update. She offered to pay off the debts to the previous landlord and the utilities, pay 2.5 the deposit (per my request) and $125 more per month in rent along with a parental co-sign. I might be able to make this work for all parties. She pays me enough to cover any likely damages, higher rent as an additional buffer, parental co-sign, AND pay the people she owes money to.
It sounds like a desperate tenant believes she has found a desperate landlord. Note that what finally prompts her to pay her debts to her former landlord is being under the gun and needing to secure a place. This presumably comes after many rejections from landlords who see the obvious, and that is that if she did not pay her previous landlord what makes you think she will pay you?
How badly do you need this month's rent? My sense is pretty badly otherwise you would see through this ruse. Your comment that "I might be able to make this work for all parties" is particularly troubling and reeks of desperation. Don't let greed and $125 a month cause you do go down this path. This is the kind of assurance that bad tenants can routinely make because it is relatively costless, they know they won't pay. Just how long do you expect her to pay $125 a month in extra rent or indeed any rent? The best guide to future behavior is past behavior and the answer based on that is staring you in the face.
Touche, this is why I posted here, to help me keep my temptation and emotion out of it. I actually initially sent her the required adverse action notice. Nonetheless, I ignored several calls and texts last night when she was asking for the application for her parents to cosign, and I think she went away. I really worry about her damaging the place, and of course, she has a kid, so gonna be tough to get a judge to let me throw her out.
Honestly I just want to sell this place and be done with it. Either hold the money or 1031 into another higher end home. This place, the neighborhood, it just attracts losers like this girl. Did I mention she drove up in a 60+K luxury car and thought $16 an hour was good money???
0 Reply
Chuy Gonzalez
Investor · Long Beach, CA · Member since 2012 · 313 posts · 190 votes
9y
Empty unit...no rent.....
vs...
Occupied unit, no rent, eviction costs
3 Reply
Jack B.
OP
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Yeah, she emailed me again today trying to change the deal she had originally agreed to. Ugh. I flat out told her when someone which such terrible credit history repeatedly bounces all over the board on what they will agree to, it's a sign of future issues. It's done, she is gone. Would rather let it sit at this point than deal with crummy or questionable tenants. I used to allow 550 credit score people when I first started out, bad experiences later, I'm always hesitant now, though the temptation is always there after it's been sitting empty for a while. Like the other guy said, every tenant with a 550 or below credit score I've ever had was an issue, every single one of them. Credit score IS a sign of behavior. No surprise that my 780+ credit score tenants have never been an issue...
1 Reply
Colleen F.Pro Member
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
9y
You are so uncomfortable you should reject this applicant but here are some thoughts I had when reading your post.
Did she admit to knowing she owed the apartment complex? Or was she clueless. Was it an eviction? unpaid damages? Something she got in the mail and ignored and shouldn't have. I would have her prove that she paid these debts before accepting an ap.
If you were to move forward I assume you would run parents credit too and see if it is good.
You weigh this car heavily as you mention the luxury car twice. I wouldn't. Do you know is it hers? the parents? Maybe it was separation property. Who knows.. I usually don't consider cars much. Who knows who bought it.
How young is she? To some people $16.00/hr is good of money, if it is 3x rent it is what counts for you. I think she probably considers it good money because it is better then what she made before and good enough to afford your place.
All that said I was not in the room there is a whole context to this interaction we can't know but I wanted to throw out some thoughts for next time.
1 Reply
Oz Val
Columbia, MD · Member since 2016 · 4 posts · 0 votes
9y
Originally posted by @Jack B.:

Update. She offered to pay off the debts to the previous landlord and the utilities, pay 2.5 the deposit (per my request) and $125 more per month in rent along with a parental co-sign. I might be able to make this work for all parties. She pays me enough to cover any likely damages, higher rent as an additional buffer, parental co-sign, AND pay the people she owes money to.
is it legal in your area to chare 2.5X deposit, in MD i think its only 1.5X
0 Reply
Daren H.
Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
9y
She is telling you who she is loud and clear. You should listen!
1 Reply
Natalie KolodijBusiness Member
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Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
9y
@Jack B. I'm really surprised to hear that you're having a hard time finding a renter. Is the rental in Seattle?
Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
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Jack B.
OP
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Natalie Kolodij:

@Jack B. I'm really surprised to hear that you're having a hard time finding a renter. Is the rental in Seattle?
It's actually not unusual this time of year. There is a thread on here about the hardest time of year to fill a rental. This is it, lol.
This rental is in Tacoma. Tons of interest but a lot of blue collar, low income people in Tacoma. Most applicants don't qualify. Sadly, even on my 500k properties most tenants have awful credit histories. There is a reason these people are renters. Good luck with the CPA exams. When you pass, you can practice your CPA skills on my rentals, free of charge, just to help you out... :-P
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Natalie KolodijBusiness Member
Moderator
Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
9y
Ah yes- I ran into somewhat the opposite issue on the North end. I live in Snohomish and have been looking at rentals in Everett mostly...but the blue collar/bad credit is one of my biggest fears.
I currently rent and my landlord basically did a dance when two 20something professionals with 700+ credit scores walked in. We showed up right after a potential applicant trying to explain why he should overlook their eviction from 2 years prior.
I've actually been practicing my CPA skills for a charge for a few years now unfortunately...so you've unfortunately missed the "willing to work for free for experience" window. I've just got to finish the exam to get those letters after my name. :P
Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
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Jack B.
OP
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Oz Val:

Originally posted by @Jack B.:
Update. She offered to pay off the debts to the previous landlord and the utilities, pay 2.5 the deposit (per my request) and $125 more per month in rent along with a parental co-sign. I might be able to make this work for all parties. She pays me enough to cover any likely damages, higher rent as an additional buffer, parental co-sign, AND pay the people she owes money to.
is it legal in your area to chare 2.5X deposit, in MD i think its only 1.5X
Yes, the only stipulation or limits on fees charged in WA is that the late fees for late rent payments, etc. don't exceed 20% of the rent amount.
https://app.leg.wa.gov/rcw/default.aspx?cite=19.150.150
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Jack B.
OP
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Natalie Kolodij:

Ah yes- I ran into somewhat the opposite issue on the North end. I live in Snohomish and have been looking at rentals in Everett mostly...but the blue collar/bad credit is one of my biggest fears.
I currently rent and my landlord basically did a dance when two 20something professionals with 700+ credit scores walked in. We showed up right after a potential applicant trying to explain why he should overlook their eviction from 2 years prior.
I've actually been practicing my CPA skills for a charge for a few years now unfortunately...so you've unfortunately missed the "willing to work for free for experience" window. I've just got to finish the exam to get those letters after my name. :P
Everett is the Tacoma of the North end, you're in for some interesting characters. Truth be told I had to school my employers CPA tax advisor on how to properly fill out a W2 and when box 13 should/should not be checked. Sadly, took 3 emails to get them to understand the IRS matrix before they sent out thousands of corrected W2's. And unfortunately my previous CPA didn't do a good job on my rental property returns and I've actually gotten accustomed to doing them myself for a bigger return, plus it turned out he changed my return after I signed it, found out during a mortgage company audit of my tax transcripts...
Thought about sitting for the CPA exams but figured I'd rather go to law school instead. Might still do the CPA thing though, just to get JD, MBA, CPA after my name. But would rather keep playing the real estate game for profit ;-).
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Adrian Chu
Real Estate Broker · Seattle, WA · Member since 2014 · 1k+ posts · 427 votes
9y
Glad you aren't in Seattle city limits.
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