Tenant Screening advice needed

11 Replies

Hey BP - I'm looking for some advice on potential tenants I am screening. I have a couple applying. They are not married.

One of them meets all income and credit requirments having a 729 credit score. So by themself, I would move forward with leasing to this person.

The other meets the credit requirement with a 709 credit score but doesnt meet the income requirement. So I would probably not move foward to leasing to this person alone.

So if they are both going on the same lease, would you be concerned about the one person not meeting the income requirement?  I was considering requiring a double security deposit to mitigate the risk some.

Everything else looks good. One has 7 yr marine corps and the other just graduated college. Seems like solid people getting on their feet.

Thanks for your opinions.

I agree with Wayne,  those are both good scores.   It has been my experience that if the tenants are in a current relationship and not married then there is a strong possibility that it won't last.   I like the idea of asking for a bigger deposit to mitigate the possibility that they terminate the lease early due to a split.   The other thing that I would do is put the person that meets the income requirements as the primary on the lease.   If there is a split then that person is more than likely going to be the one that stays in your home.

I'm also curious if this is the first home they have rented as a couple or do they have a positive history at another location?   If they do that would make me feel better about the situation.   

Good luck and in this market if this doesn't work out I'm sure you will find the right tenants.   Patience has alway helped me find tenants I feel really good about.  

The income requirement is generally a combination of all parties to the lease . So as a couple they qualify . AND with those credit scores sign them up quick especially this time of year 

I qualify them together. My requirement is that they make 3x the monthly rent. If rent is $1,000 then I expect them to make a combined income of $3,000.

Be sure your lease includes something called "joint and several liability".

My rules change when more than two people are involved because the risk shifts dramatically. I've had five friends apply to rent a $2,000 rental and 80% of the income came from one applicant while two of the applicants had no income. Can you imagine what would happen if that one applicant moved out or lost his job?

Hope for the best, prepare for the worst.

@Brad E.

Does the area commands high Credit Scores like the ones you are getting from the tenants? In my area of Brooklyn, that would still acceptable, but not normally the winning score since I typically get scores above 750.

HOWEVER, those are good scores and like @Nathan G. said, make sure your lease does have "Joint and Several Liability." Explain to them that regardless if one of them leaves, both are responsible for the FULL rent.

If there is a shortage for rent, you will take BOTH of them to Court. In my neck of the woods, even having a Tenant/Landlord case against you will severely hamper your ability to rent another apartment. It's one of the only way Landlords can combat these tenant friendly Cities.

What I also do is to ensure that they are in good standing by asking for at least 3 Month's Bank Statements showing proof of on time payments and I must see the current rent payment. That's evidence that they are not problematic or has not been problematic to the previous landlord, who tends to give a good recommendation just to get rid of them.

The Statements also ensures that I wasn't set up by one of their friends "Pretending" to be their landlord.

Of course a lot of Landlords don't go to my extreme, but this is NYC. Rents are very high and you don't want bad tenants that can live rent free in your apt for months.

@Brad E. ,

IMO your biggest risk with them is that they will break up and end the lease.    Could you try increasing the lease termination fee, and highlighting it to them to make sure they are aware?       You could also offer them a M2M with a higher security deposit, so if anything goes sour, it's an easy split for everyone.

If they have 700+ credit scores, and steady jobs, I don't think you will need to worry about evicting them, as they are probably smart enough to know it'd be a horrible hit to their credit.   They seem incredibly qualified, and perfect tenants!   I would rent to them ASAP, this is a rough time to have a vacancy!    Since they both can cover or nearly cover it by themselves, even if they did split.. I think your risk is minimal... your biggest risk is if a married couple splits, and you have a stay at home parent, and have to wait for money/funding to go through the legal process-- that's the mess.. 2 people with good paying jobs, no mess IMO.

Hi @Brad E.

I'm with everyone above, accept them. With our property management, we look at household income and credit. You have 1 person who qualifies by themselves. So in the even that they do break up, the one that qualifies stays, and you remove the other party from the lease. 

I also like military tenants. They traditionally are cleaner, quiet and their rent is paid by a per-diem basis from the military, so it's essentially government guaranteed money. I believe this next point goes across all states. If that person gets orders from their superior that they are getting relocated, you must let them out of the lease without penalty, but they must also give 6 months notice. So ask them how long is their deployment in your area. 

@Wayne Bodley

My gut says yes but because I am new to this, I don't trust myself yet.

@Bj Johnson

Yes, the fact that they not married is the part that makes me nervous. Breakups happen. It does appear that this will be their first time renting together.

@Llewelyn A.

I think those are high credit scores for the area. Most people are telling me (haven't run checks) that their credit will be in the 550-650 range.

@Linda D.

I hadn't considered a M2M that is an interesting thought.

Thanks every one for the input. I feel pretty good about these applicants but this feedback is very helpful.

If they're both on the lease they will both be responsible for rent and I would look at their combined incomes in use against the rent-to-income ratio standards. If they were signing separate leases and paying separately by splitting the rent her lower income would be a worry to me.

Seems like a good fit.