Hi All, I've recently had someone apply for a 1 bed 1 bath apartment I have for rent. I'm having a hard time deciding if I should accept the application or not and would greatly appreciate any feedback one way or the other. Here are the pros and cons below. Pros: Has a part time job and seems clean and responsible. Nonsmoker, no pets. Has kids in the area and plans to stay longer term...several years or more. Has $60,000+ in savings. Am awaiting bank statements to confirm this. No criminal history or prior evictions. Owned home prior to this. Willing to pay a years rent in advance and do month to month for the lease. Instead I'm considering just asking for a double security deposit though. Cons: Has a chapter 7 Joint bankruptcy with her (former) husband on file from 03/2017. Has a joint credit card with a $13,000 limit that has $13,600 on it currently and is 30 days past due. Has several other joint credit cards that were cancelled. The rent is $715\month but she only brings in $1,700\month currently. She said her lawyer told her she should get at least $1,000\month in alimony starting in January though which would bring her monthly income to $2,700. When asked about the bankruptcy and past due\cancelled cards, here is what she wrote in response. "Earlier this year I had found out that my husband of 31 years was having online and in person affairs and after some marital counseling I decided to get a divorce as he was continuing his behavior. This resulted in the Joint Bankruptcy as finances were a problem. The Chase line of credit is a joint account for his car which he is supposed to be paying on and has been sporadic in his payments. My attorney is currently dealing with him on this. The accounts that were cancelled by the creditor were due to the bankruptcy. Just to add: the divorce situation is non-contested and there are no problems with violence or anything else. We have both decided to go our separate ways. I am looking to move to the Reading area to be closer to my son and his family who live in Sinking Springs. I am very interested in the W Walnut Street apartment as it is in a safe neighborhood and I think it would be good fit for me. I hope you will be able to make a positive decision in choosing me as the tenant."Taking everything into consideration, including large amount of savings, would you rent to this person? If so what precautions would you take...is getting a double security enough and doing month to month for the lease? Any input is greatly appreciated. Thanks! Just to add: the divorce situation is non-contested and there are no problems with violence or anything else. We have both decided to go our separate ways. I am looking to move to the Reading area to be closer to my son and his family who live in Sinking Springs. I am very interested in the W Walnut Street apartment as it is in a safe neighborhood and I think it would be good fit for me. I hope you will be able to make a positive decision in choosing me as the tenant." Taking everything into consideration, including large amount of savings, would you rent to this person? If so what precautions would you take...is getting a double security enough and doing month to month for the lease? Any input is greatly appreciated. Thanks!

I would have already rented it to her and would be making it rain with her year's worth of rent as I take her lump sum money and invest it into my next deal lol.

Would certainly need to know how she managed a chapter 7, and is also flushed with cash, that may or may not be a red flag.

Wait a minute guys. This is a one bed one bath apartment we are talking about here. She is willing to give you the money up front because nobody in their right mind would consider it any other way. Could she blow her savings, sure do you care NO. You have her money up front. Now if you live in an area where evictions are a nightmare that is a factor to consider. But so is a years worth of rent up front (think about the boost to your balance sheet). It is only a one bed one bath not a house that could be trashed.

@Tim Porsche When the up front cash runs out you would just be left with a bad credit risk who is stiffing the creditors she has already, again. Remember this is a repeat performance, she is a bankrupt. The promised up front payment is blinding you to this reality. I just had to chase a bad tenant through the courts for $7,000 in damages. As I was driving back and forth having served their paralegal with yet more evidence and having driven to the court house to file yet another Affidavit of Service I swore to myself that there would be no more marginal tenants. Everyone would have to have squeaky clean credit, rock solid landlord references and no behavioral issues. Your tenant does not have these desirable features and is trying to compensate for her deficiencies by blinding you with money. Your eagerness suggests that it is working. She would not offer to pay up front if she thought a landlord would take her application ordinarily as is because she knows that all her characteristics add up to being bad news to landlords who are paying attention. I promise you that evictions and small claims for damages will be sheer torture and will have you rueing the day that you took her money. If you want to get a taste of what it is like, go out and burn $1,000 in $20s in your back yard. If you don't feel sick, do it again. Repeat until you get an overwhelming feeling of senseless waste. Now you know what walking into a really bad tenant situation is like. Once you have been there you realise prevention is far better than cure. You are being given a choice here.

@Tim Porsche, you should have enough applicants to not have to consider this applicant, no? This applicant sounds like a Train~Wreck to me. A long time ago, I was in small claims court to sue an ex tenant, twice, and it is not fun. If it were me, I would "Forward~Think" long and hard. And say forget it. But that's just me. My 2 cents. Best to you. Daniel F. Harb

Would sit down with her and slowly go over her financial life for the past decade. More often than not, the divorce is just the tip of the iceberg toward understanding a lifetime of bad habits. Not saying my decision would be no, just would not let a year paid in advance blind me to other her other potential character flaws.

@Tim Porsche it is amazing to me some of the stuff people are saying. It makes me wonder how much experience they have. I have accepted two tenants who prepaid rent and no problems. They simply had the cash and used it as a way to make their approval more appealing. Both were women who needed a nice home. Her story makes perfect sense. It sounds to me like a lady who has had a bad situation and is looking for a nice home for herself. This doesn't sound like a scam and it doesn't seem to me that she would go on a wild spending spree. My guess is she would stick around for a while.

Would You Rent To This Applicant?

Account Closed

Downers Grove, IL · Member since 2017 · 366 posts · 165 votes

8y

Heard a story from a real estate agent awhile back, one of her clients rented out class A condo to someone with bad credit, paid 6 months or a year in advance, they were dealing drugs in the unit, left place totally trashed 50K in damage. A lot of nice people have credit problems though, their not all monsters.

0 Reply

Peter Sinclair

Duarte, CA · Member since 2015 · 65 posts · 54 votes

8y

Originally posted by @Ihe O.:

Originally posted by @Peter Sinclair:

Stick with the minimum requirements you set when screening tenants. Its good to be empathetic but don’t get caught up in their situations.

If you require a minimum credit score of 650 and the tenant has a 635.. stick to your minimum. If you have minimum household income requirements such as double or triple the rent.. stick with it! Her alimony isn’t set in stone... what if the husband doesn’t pay?

There were times I felt bad turning down a renter, especially after they’ve paid a $40 application fee but I have to remind myself these are the rules of the game.

If you decide to turn her down, you can always pass the buck of blame to someone else. For example, I tell my renters that I just manage the place and the “owner” makes the ultimate decision. In your situation I would say “ I pleaded on your behalf and explained everything to the owner but they decided not to waive the minimum requirements, If I could rent it to yah.. I definitely would.. I’m sure you’ll find a place better than this one anyhow.”

Since you are giving that advice what is the difference between a 650 and a 635 credit score.

The difference could be attributed to many factors, such as maxing out a credit card, being late on a payment, having your credit run multiple times. A 650 credit score ranks higher than 40% of US consumers, whereas a 635 credit score ranks higher than 36% of US consumers.

0 Reply

Ihe O.

Investor · Laurel, MD · Member since 2016 · 395 posts · 191 votes

8y

Originally posted by @Peter Sinclair:

Originally posted by @Ihe O.:

Originally posted by @Peter Sinclair:

Stick with the minimum requirements you set when screening tenants. Its good to be empathetic but don’t get caught up in their situations.

If you require a minimum credit score of 650 and the tenant has a 635.. stick to your minimum. If you have minimum household income requirements such as double or triple the rent.. stick with it! Her alimony isn’t set in stone... what if the husband doesn’t pay?

There were times I felt bad turning down a renter, especially after they’ve paid a $40 application fee but I have to remind myself these are the rules of the game.

If you decide to turn her down, you can always pass the buck of blame to someone else. For example, I tell my renters that I just manage the place and the “owner” makes the ultimate decision. In your situation I would say “ I pleaded on your behalf and explained everything to the owner but they decided not to waive the minimum requirements, If I could rent it to yah.. I definitely would.. I’m sure you’ll find a place better than this one anyhow.”

Since you are giving that advice what is the difference between a 650 and a 635 credit score.

The difference could be attributed to many factors, such as maxing out a credit card, being late on a payment, having your credit run multiple times. A 650 credit score ranks higher than 40% of US consumers, whereas a 635 credit score ranks higher than 36% of US consumers.

Not that I consider it relevant for a rental applicant - I don't - but the difference could simply be down to putting a large item that you can perfectly afford on interest free credit at Loews.

1 Reply

Thomas S.

Member since 2016 · 13k+ posts · 12k+ votes

8y

For all you hobby landlords out ther seeing dollar signs you need a reality check. When a tenant pays rent in advance that money remains the property of the tenant. It legally must be kept in a separate account and can not be touched by the landlord except for the monthly withdraw of rent. Legally the tenant may demand the return of any cash left in the account at any time and remain as a tenant in the unit provided they continue to pay rent. If they stop paying the landlord may evict.

For all those of you seeing a cash bribe as a plus, shake your heads. If stupid was painful people might learn faster.

Personally as a landlord that has seen a lot my unit would remain vacant before I took a chance on this potential train wreck. Can't believe anyone would be so blind as to not see the writing on the wall with this one. Funny how flashing some cash causes temporary blindness.

4 Reply

Peter Sinclair

Duarte, CA · Member since 2015 · 65 posts · 54 votes

8y

Originally posted by @Ihe O.:

Originally posted by @Peter Sinclair:

Originally posted by @Ihe O.:

Originally posted by @Peter Sinclair:

Stick with the minimum requirements you set when screening tenants. Its good to be empathetic but don’t get caught up in their situations.

If you require a minimum credit score of 650 and the tenant has a 635.. stick to your minimum. If you have minimum household income requirements such as double or triple the rent.. stick with it! Her alimony isn’t set in stone... what if the husband doesn’t pay?

There were times I felt bad turning down a renter, especially after they’ve paid a $40 application fee but I have to remind myself these are the rules of the game.

If you decide to turn her down, you can always pass the buck of blame to someone else. For example, I tell my renters that I just manage the place and the “owner” makes the ultimate decision. In your situation I would say “ I pleaded on your behalf and explained everything to the owner but they decided not to waive the minimum requirements, If I could rent it to yah.. I definitely would.. I’m sure you’ll find a place better than this one anyhow.”

Since you are giving that advice what is the difference between a 650 and a 635 credit score.

The difference could be attributed to many factors, such as maxing out a credit card, being late on a payment, having your credit run multiple times. A 650 credit score ranks higher than 40% of US consumers, whereas a 635 credit score ranks higher than 36% of US consumers.

Not that I consider it relevant for a rental applicant - I don't - but the difference could simply be down to putting a large item that you can perfectly afford on interest free credit at Loews.

Even with your example, I can argue that if you can perfectly afford something, why not just pay it off? What if after this large purchase you get laid off from work and you can afford these interests free payments anymore.

Since differing credit scores have a myriad of affecting factors, i chose to screen my tenants against minimum credit score as it provides an objective reference point for me to make decisions rather than leave them up to questionable, subjective interpretations of ones credit score.

0 Reply

Josh Green

Financial Advisor · Tampa Area, FL · Member since 2008 · 956 posts · 214 votes