Would You Rent To This Applicant?

122 Replies

This thread moved too fast for me. I don't even know where I am in the response anymore, but here it goes. I don't know the laws in Pennsylvania; in Massachusetts, we cannot collect a security deposit amount above 1 month's rent. Maybe Penn is different, be sure to check the state laws.

The  divorcee tenant does not seem like someone I would rent to based on the information. Seems like the alimony is a major part of the income and that is not necessarily guaranteed.

Even though she seems nice and has agreed to pay a year upfront, you never know how that will turn out. I had a tenant agree to 4 months up front, I declined her offer and said that I would collect monthly. She eventually broke her lease. I have had a tenant who had bad credit, she stated that her credit was damaged due to hospital debt. I accepted her based on past landlords recommendations and they seemed like nice people. I had late rent for months. They have since turned around, but the story they tell isn't the one you get. I recently had a tenant break a lease, and they were amazing on paper (mid 7's credit, 3x income, steady past, etc., and always paid me on time) hey broke the lease because of life changes (new job, and moved in with fiance. I would always lean towards how they look on paper. You never know in this business.

The second tenant on paper looks better, try to get that applicant.

Originally posted by @Peter Sinclair :
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Irina Belkofer:

interesting how people see the situation so differently 

When I've read the OP, my first reaction was - of course, rent! It's a no brainer ;)

When reading comments, I'm realizing that it's not so obvious for everybody.

Any income can disappear - my tenant once lost a job he was at for 23 year.....next - eviction.

10 month worth rent - I'd put in my trust account, not as security deposit but rent in advance. Yes, there is tax implications, so what? We still pay taxes and if she does it on January 1st - it's still the same as she would pay monthly. However, it secured the lease for these 10 months.

As someone said, IF she requested her money back?!? No, she should move out first, sign the lease dissolution and pay all the damages ......my contract includes quite few fees for early termination if the lease.

Next, her credit. I assume, nobody ever get divorced here.....good for you! But when people divorce, banckruptcy, foreclosure, default on their credit cards do happen. More of that, it's good for the landlord! Why? Because she won't be able to buy her next house any soon. She will rent,....and if you're lucky - from you!

I'd take such a tenant without thinking twice - in 3-4 years she'd pay off my condo ;) 

It's amazing how people discuss stupid difference between 650 and 635 FICO but won't see the whole picture.

Who cares about credit in these situations? People's life is going down totally, divorce and banckruptcy wipe off whole previous good things. If you're not helping people, be smart at least to help yourself. Such tenants are priceless!

What makes you think I didn’t consider the whole picture? 

I see a bankrupt applicant with maxed out credit cards, but supposedly has $60k in the bank (not yet proven). She makes $1700 a month, but how much of this is is actually leftover, and is enough leftover to pay for rent? Its not stated. She may get awarded alimony but until then cant be proven. 

What did I miss? 

You keep saying this. Who cares about her part time job if she is willing to pre-pay for a whole years worth of rent up front?

Also, from the way I understood the response from the OP it's not credit card debt. That's the note on the truck/vehicle that her ex-husband is in charge of taking care of. It's not $13k in credit cards, its $13k they still owe on the truck.....that's how I took it at least. 

 “Has a joint credit card with a $13,000 limit that has $13,600 on it currently and is 30 days past due.” - OP

I took it literally.. I don’t know how you confused it for a truck payment.. 

Her job is important... the OP stated that she didn’t provide proof yet.. so going off someone’s word is ill advised.. Also, what happens at the end of the lease; When she needs to make monthly payments? Wouldn’t the job be important then? When screening a tenant you have to look beyond the now and assess for the future! 

The end of the lease is the end of the lease. So what? If she doesn't have her stuff together then she moves out unless she can pay another years worth of rent up front.

Do you expect your tenants to stay for forever?

Also, I got it confused because later down the OP said the LOC from Chase was for a truck the husband was supposed to be paying. Guess I somehow got the two confused.

 “So what?” Lol You make it seem as if the eviction process is simple, free, and not time consuming! 

While I don’t expect my tenants to stay forever,  I do expect them to make their rent payment on time and in full. Job history is an important peice of evidence in assessing such risk. Yes, a person working 30 years can be fired or layed off just as easily as someone working for 3 months... however, their history proves that this is unlikely.. meaning less risk. 

So, while taking a big sum partially mitigates the current years risk, it doesn’t tell me she’ll make a good tenant later. But a long working history does tell me she was respondsible enough to keep her job for said such amount of time. 

You have to evict people when their lease is up? New one on me.

Paying a year early is not paying on time and in full? New one on me.

 This is what you said... “So what? If she doesn't have her stuff together then she moves out....” Hence, my response about the eviction process Mr. Smarty Pants. 

I get it.. am I being trolled here? Lol Are you just arguing for the sake of arguing??? How do I get myself caught up in these things... 

So what, thats exactly what I meant and how I feel. What happens at the end of every lease agreement? How would this one be any different?

I'm not trolling, and I'm not arguing. No reason to be so sensitive.

 I cant help it that I’m in touch with my feelings.. no reason to be sensitive is a personal opinion, but what if my emotional symptoms are similar to that of a person with allodynia? Do you think they make meds for this? 

Snowflakes in California....priceless.

Have a good day sir!

Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Irina Belkofer:

interesting how people see the situation so differently 

When I've read the OP, my first reaction was - of course, rent! It's a no brainer ;)

When reading comments, I'm realizing that it's not so obvious for everybody.

Any income can disappear - my tenant once lost a job he was at for 23 year.....next - eviction.

10 month worth rent - I'd put in my trust account, not as security deposit but rent in advance. Yes, there is tax implications, so what? We still pay taxes and if she does it on January 1st - it's still the same as she would pay monthly. However, it secured the lease for these 10 months.

As someone said, IF she requested her money back?!? No, she should move out first, sign the lease dissolution and pay all the damages ......my contract includes quite few fees for early termination if the lease.

Next, her credit. I assume, nobody ever get divorced here.....good for you! But when people divorce, banckruptcy, foreclosure, default on their credit cards do happen. More of that, it's good for the landlord! Why? Because she won't be able to buy her next house any soon. She will rent,....and if you're lucky - from you!

I'd take such a tenant without thinking twice - in 3-4 years she'd pay off my condo ;) 

It's amazing how people discuss stupid difference between 650 and 635 FICO but won't see the whole picture.

Who cares about credit in these situations? People's life is going down totally, divorce and banckruptcy wipe off whole previous good things. If you're not helping people, be smart at least to help yourself. Such tenants are priceless!

What makes you think I didn’t consider the whole picture? 

I see a bankrupt applicant with maxed out credit cards, but supposedly has $60k in the bank (not yet proven). She makes $1700 a month, but how much of this is is actually leftover, and is enough leftover to pay for rent? Its not stated. She may get awarded alimony but until then cant be proven. 

What did I miss? 

You keep saying this. Who cares about her part time job if she is willing to pre-pay for a whole years worth of rent up front?

Also, from the way I understood the response from the OP it's not credit card debt. That's the note on the truck/vehicle that her ex-husband is in charge of taking care of. It's not $13k in credit cards, its $13k they still owe on the truck.....that's how I took it at least. 

 “Has a joint credit card with a $13,000 limit that has $13,600 on it currently and is 30 days past due.” - OP

I took it literally.. I don’t know how you confused it for a truck payment.. 

Her job is important... the OP stated that she didn’t provide proof yet.. so going off someone’s word is ill advised.. Also, what happens at the end of the lease; When she needs to make monthly payments? Wouldn’t the job be important then? When screening a tenant you have to look beyond the now and assess for the future! 

The end of the lease is the end of the lease. So what? If she doesn't have her stuff together then she moves out unless she can pay another years worth of rent up front.

Do you expect your tenants to stay for forever?

Also, I got it confused because later down the OP said the LOC from Chase was for a truck the husband was supposed to be paying. Guess I somehow got the two confused.

 “So what?” Lol You make it seem as if the eviction process is simple, free, and not time consuming! 

While I don’t expect my tenants to stay forever,  I do expect them to make their rent payment on time and in full. Job history is an important peice of evidence in assessing such risk. Yes, a person working 30 years can be fired or layed off just as easily as someone working for 3 months... however, their history proves that this is unlikely.. meaning less risk. 

So, while taking a big sum partially mitigates the current years risk, it doesn’t tell me she’ll make a good tenant later. But a long working history does tell me she was respondsible enough to keep her job for said such amount of time. 

You have to evict people when their lease is up? New one on me.

Paying a year early is not paying on time and in full? New one on me.

 This is what you said... “So what? If she doesn't have her stuff together then she moves out....” Hence, my response about the eviction process Mr. Smarty Pants. 

I get it.. am I being trolled here? Lol Are you just arguing for the sake of arguing??? How do I get myself caught up in these things... 

So what, thats exactly what I meant and how I feel. What happens at the end of every lease agreement? How would this one be any different?

I'm not trolling, and I'm not arguing. No reason to be so sensitive.

 I cant help it that I’m in touch with my feelings.. no reason to be sensitive is a personal opinion, but what if my emotional symptoms are similar to that of a person with allodynia? Do you think they make meds for this? 

Snowflakes in California....priceless.

Have a good day sir!

 It doesn’t snow where I live.. so you sir are wrong! A better insult would be a delicate rose.. but then again roses are pretty.. so that may end up becoming a compliment. 

Happy Holidays to you! 

Originally posted by @Peter Sinclair :
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Derek E.:
Originally posted by @Peter Sinclair:
Originally posted by @Irina Belkofer:

interesting how people see the situation so differently 

When I've read the OP, my first reaction was - of course, rent! It's a no brainer ;)

When reading comments, I'm realizing that it's not so obvious for everybody.

Any income can disappear - my tenant once lost a job he was at for 23 year.....next - eviction.

10 month worth rent - I'd put in my trust account, not as security deposit but rent in advance. Yes, there is tax implications, so what? We still pay taxes and if she does it on January 1st - it's still the same as she would pay monthly. However, it secured the lease for these 10 months.

As someone said, IF she requested her money back?!? No, she should move out first, sign the lease dissolution and pay all the damages ......my contract includes quite few fees for early termination if the lease.

Next, her credit. I assume, nobody ever get divorced here.....good for you! But when people divorce, banckruptcy, foreclosure, default on their credit cards do happen. More of that, it's good for the landlord! Why? Because she won't be able to buy her next house any soon. She will rent,....and if you're lucky - from you!

I'd take such a tenant without thinking twice - in 3-4 years she'd pay off my condo ;) 

It's amazing how people discuss stupid difference between 650 and 635 FICO but won't see the whole picture.

Who cares about credit in these situations? People's life is going down totally, divorce and banckruptcy wipe off whole previous good things. If you're not helping people, be smart at least to help yourself. Such tenants are priceless!

What makes you think I didn’t consider the whole picture? 

I see a bankrupt applicant with maxed out credit cards, but supposedly has $60k in the bank (not yet proven). She makes $1700 a month, but how much of this is is actually leftover, and is enough leftover to pay for rent? Its not stated. She may get awarded alimony but until then cant be proven. 

What did I miss? 

You keep saying this. Who cares about her part time job if she is willing to pre-pay for a whole years worth of rent up front?

Also, from the way I understood the response from the OP it's not credit card debt. That's the note on the truck/vehicle that her ex-husband is in charge of taking care of. It's not $13k in credit cards, its $13k they still owe on the truck.....that's how I took it at least. 

 “Has a joint credit card with a $13,000 limit that has $13,600 on it currently and is 30 days past due.” - OP

I took it literally.. I don’t know how you confused it for a truck payment.. 

Her job is important... the OP stated that she didn’t provide proof yet.. so going off someone’s word is ill advised.. Also, what happens at the end of the lease; When she needs to make monthly payments? Wouldn’t the job be important then? When screening a tenant you have to look beyond the now and assess for the future! 

The end of the lease is the end of the lease. So what? If she doesn't have her stuff together then she moves out unless she can pay another years worth of rent up front.

Do you expect your tenants to stay for forever?

Also, I got it confused because later down the OP said the LOC from Chase was for a truck the husband was supposed to be paying. Guess I somehow got the two confused.

 “So what?” Lol You make it seem as if the eviction process is simple, free, and not time consuming! 

While I don’t expect my tenants to stay forever,  I do expect them to make their rent payment on time and in full. Job history is an important peice of evidence in assessing such risk. Yes, a person working 30 years can be fired or layed off just as easily as someone working for 3 months... however, their history proves that this is unlikely.. meaning less risk. 

So, while taking a big sum partially mitigates the current years risk, it doesn’t tell me she’ll make a good tenant later. But a long working history does tell me she was respondsible enough to keep her job for said such amount of time. 

You have to evict people when their lease is up? New one on me.

Paying a year early is not paying on time and in full? New one on me.

 This is what you said... “So what? If she doesn't have her stuff together then she moves out....” Hence, my response about the eviction process Mr. Smarty Pants. 

I get it.. am I being trolled here? Lol Are you just arguing for the sake of arguing??? How do I get myself caught up in these things... 

So what, thats exactly what I meant and how I feel. What happens at the end of every lease agreement? How would this one be any different?

I'm not trolling, and I'm not arguing. No reason to be so sensitive.

 I cant help it that I’m in touch with my feelings.. no reason to be sensitive is a personal opinion, but what if my emotional symptoms are similar to that of a person with allodynia? Do you think they make meds for this? 

Snowflakes in California....priceless.

Have a good day sir!

 It doesn’t snow where I live.. so you sir are wrong! A better insult would be a delicate rose.. but then again roses are pretty.. so that may end up becoming a compliment. 

Happy Holidays to you! 

Merry Christmas snowflake.

60k in savings and then chapter 7 filing,
Something just doesn’t adds up.

With that said, I year up front eliminates the risk completely and gives you equity to enter another investment.

One thing to make sure, collect overlapping payments, for example she paid for a year from dec 2017 to dec 2018 , collect the rent for January 2019 in dec 2018.

Other that I would approve her in a heartbeat.

Good luck

Originally posted by @Derek E.:

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.

Risky and unethical.  Prepaid rent is a current liability.  She could leave the apartment before the year is up and demand the balance of her pre-paid rent, less any early termination fee.

If your not legally allowed to collect rent that far ahead, wonder if it could be held in an escrow account by a title company or attorney, maybe some out of the box work around. The cash could have came from the divorce settlement, the husband could of had money in a retirement account not subject to the BK?

Stick to your rental criteria so that you cannot ever be accused of "discrimination" - all applicants have to be treated equally.

This applicant does not at the time of application have sufficient income to meet 3x rent, so that is a no go if you have that as your qualifying criteria.

There is this potential additional $1000 per month that might become income. But that source is an ex-spouse who has already been characterized as the financially irresponsible one - so you can't make any assumptions about that amount becoming guaranteed income. And if tha ex-spouse carries a grudge toward the ex-wife, he could just not pay or even stop working to get out of paying. And even now the ex-spouse is not paying on the credit card and car payments, so definitely not a reliable income source.

There is an interesting point to this whole story that another post touched upon - how does somebody who goes through a bankruptcy actually have a big chunk of money in the bank? The bankruptcy creditors would go after all unprotected funds and assets. My hunch is that this money was protected from the bankruptcy, probably retirement account money whether IRA or 401K or 203B. And if that is the case it would also be protected from other judgments. Like if rent went unpaid and the OP tried to garnish the account.

For those who are from warm and sunny California - it is December, and the OP's rental unit is a bit NW of Philadelphia, and with snow on the ground and holidays coming up there aren't as many people looking to move. So there might not be a glut of applicants. I have a vacancy now, and the best prospects are those who are relocating for a change in job, only two this month who actually are moving but staying local in the area. I wish there were more prospects ...

Originally posted by @Tim Porsche :

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! 

 Red flags all over! Don't fall for the story.

Originally posted by @Derek E.:

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.

 What if she take you to court for any reason and decide to take all the advanced rent money back. In some states you can't even use that money, it has to stay in escrow. She sounds desperate and no I wouldn't rent to her.

Originally posted by @Steve Babiak :

For those who are from warm and sunny California - it is December, and the OP's rental unit is a bit NW of Philadelphia, and with snow on the ground and holidays coming up there aren't as many people looking to move. So there might not be a glut of applicants. I have a vacancy now, and the best prospects are those who are relocating for a change in job, only two this month who actually are moving but staying local in the area. I wish there were more prospects ...

Yeah it's slim pickings right now in this area. Former tenant picked the absolute worst time of year to leave haha. Still, I'm getting 1-3 leads per day on average. Most don't pass my pre-qualification questions though, or don't respond at all. I've had about 50 leads over the past two weeks which have led to 10 scheduled showings, with 6 actually showing up and 3 submitting applications. 

$60k in the bank yet she just filed bankruptcy and is not current on other bills... it doesn't add up.  When the story doesn't make sense, move on to the next applicant.  Sometimes those who seem the nicest are the best at lying.  

Originally posted by @Peter Sinclair :
Originally posted by @Ihe O.:
Originally posted by @Peter Sinclair:
Originally posted by @Ihe O.:
Originally posted by @Peter Sinclair:
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 cant 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.

Why not pay it off. Because I understand what net present value is and If interest free credit had no value it wouldn't be there as an incentive.  

As you say credit scores have a myriad of affecting factors. Well most of which have nothing to do with the likelihood of the tenant continuing to pay rent for the very simple reason that that's not what a credit score measures. That's why I ignore them but even if I didn't it would be why I wouldn't be dogmatic about them

Credit scores are a tool used to determine how likely someone is to default on a debt. So when we see someone with a credit score of 800, we can assume that this person is not as likely to default on their debt compared to someone with a credit score of 650. Its a tool used to quantify risk.

It can be said that rent can be comparable to one’s debt payment, ie: mortgage payment vs rental payment, both need to be paid if you want a place to live. So, your statement that credit score has nothing to do with the likelihood of the tenant continuing to pay rent isn’t entirely true. Credit score is one many factors to consider when renting to a tenant, but not an the only thing to consider. It must be taken in consideration with ones job history, income, and other influencing, financial attributions. 

Wrong. Wrong and Wrong.

Credit scores measure how profitable a prospect is or will be to the credit lending industry. 

That's why lenders are willing to pay credit scoring companies for them.

That's why people who pay lots of credit card interest can get high credit scores even though it's an irresponsible way to borrow and they are only a paycheck away from being unable to meet their obligations (which is often why they have credit card borrowing).

That's also why credit scores  don't factor in things that  have a huge bearing on your ability to repay debt like your net worth.

 Well... DUH! A person who doesn’t pay their debts isn’t profitable! 

“That’s why people who pay lots of credit card interest can get high credit score...” - Ihe O 

If this were true, why do people with bad credit have higher interests rates? From your logic, people with higher scores would have higher interests rates.... Dont believe me? Here’s a simple infographic that was formed using just such data. 

Net worth doesn’t have a direct correlation to the ability for one to repay a debt. For example, I can own 100 acres of undeveloped land deemed to be worth 7 million dollars. But I’m 18 year old high-school dropout with no job and a maxed out credit card that I used to go visit my future wife that is locked up in Puerto Rico for drug smuggling. In this scenario, my net worth has nothing to do with my ability to repay. 

So, net worth doesn’t have as huge a bearing as you want to believe! 

The problem with credit scores is that a person who is barely solvent can have a high credit score and a person of who has paid their rent on time every month for the last 5 years can have a low credit score because of something that happened 6 years ago or because they don't engage in borrowing activities.

It also wrongly posits that you can extrapolate attitude towards rent from attitudes to other types of debt. The reasoning then becomes X's performance on repaying their student loan (for example) tells me how X is going to perform when paying me rent.

It doesn't. That's palpable nonsense. 

Your second candidate sounds better although if you go back to the first one you should consider PA laws on prepayment. On another topic to all those quoting long previous responses give it a rest! It makes your answers very hard to read and is not helpful.

We would not take a year rent upfront. We would however take a year rent and put it in escrow and take monthly draws. That way if things go sideways you have a chance to evict. If 1 year was paid for what options do you have if she becomes the problem tenant that you can not get rid of.

I will definitely look into the evection laws of the state. here in Southern California even with very small knowledge of evection laws and tenant rights they manipulate the laws to work for them andcan make your life very miserable and it will take very long time to evict them. I understand that she’s willing to pay a years worth of rent upfront but you have to take in consideration depending to the evection laws it might take up to six months to evict all the time and effort that you put in it might just not be worth it. I would take it steady stream over body of water anytime.

Originally posted by @Ihe O. :
Originally posted by @Peter Sinclair:
Originally posted by @Ihe O.:
Originally posted by @Peter Sinclair:
Originally posted by @Ihe O.:
Originally posted by @Peter Sinclair:
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 cant 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.

Why not pay it off. Because I understand what net present value is and If interest free credit had no value it wouldn't be there as an incentive.  

As you say credit scores have a myriad of affecting factors. Well most of which have nothing to do with the likelihood of the tenant continuing to pay rent for the very simple reason that that's not what a credit score measures. That's why I ignore them but even if I didn't it would be why I wouldn't be dogmatic about them

Credit scores are a tool used to determine how likely someone is to default on a debt. So when we see someone with a credit score of 800, we can assume that this person is not as likely to default on their debt compared to someone with a credit score of 650. Its a tool used to quantify risk.

It can be said that rent can be comparable to one’s debt payment, ie: mortgage payment vs rental payment, both need to be paid if you want a place to live. So, your statement that credit score has nothing to do with the likelihood of the tenant continuing to pay rent isn’t entirely true. Credit score is one many factors to consider when renting to a tenant, but not an the only thing to consider. It must be taken in consideration with ones job history, income, and other influencing, financial attributions. 

Wrong. Wrong and Wrong.

Credit scores measure how profitable a prospect is or will be to the credit lending industry. 

That's why lenders are willing to pay credit scoring companies for them.

That's why people who pay lots of credit card interest can get high credit scores even though it's an irresponsible way to borrow and they are only a paycheck away from being unable to meet their obligations (which is often why they have credit card borrowing).

That's also why credit scores  don't factor in things that  have a huge bearing on your ability to repay debt like your net worth.

 Well... DUH! A person who doesn’t pay their debts isn’t profitable! 

“That’s why people who pay lots of credit card interest can get high credit score...” - Ihe O 

If this were true, why do people with bad credit have higher interests rates? From your logic, people with higher scores would have higher interests rates.... Dont believe me? Here’s a simple infographic that was formed using just such data. 

Net worth doesn’t have a direct correlation to the ability for one to repay a debt. For example, I can own 100 acres of undeveloped land deemed to be worth 7 million dollars. But I’m 18 year old high-school dropout with no job and a maxed out credit card that I used to go visit my future wife that is locked up in Puerto Rico for drug smuggling. In this scenario, my net worth has nothing to do with my ability to repay. 

So, net worth doesn’t have as huge a bearing as you want to believe! 

The problem with credit scores is that a person who is barely solvent can have a high credit score and a person of who has paid their rent on time every month for the last 5 years can have a low credit score because of something that happened 6 years ago or because they don't engage in borrowing activities.

It also wrongly posits that you can extrapolate attitude towards rent from attitudes to other types of debt. The reasoning then becomes X's performance on repaying their student loan (for example) tells me how X is going to perform when paying me rent.

It doesn't. That's palpable nonsense. 

We can go back and forth coming up with multitudes of hypothetical, situational outliers. However, credit reports will continue to play a vital role in analyzing the risks for tenant screening because a person with bad credit is a higher risk than someone with great credit. This is also why evictions are reported to major credit reporting agencies, and companies such as Experian are creating their own rental payment reporting businesses such as RentBureau. This is because those lending companies you mention earlier can see that if one isn’t paying their rent, they’re probably not going to pay the debts, and vice versa. 

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.

These were likely the result of the divorce, and probably the best outcome their lawyers suggested.  I would look at her credit and see if there was a pattern of late payments/collections before or after the divorce.  If this was a one time life event and all the bad things happened in a short period of time, I would be willing to consider overlooking it.  I don't look at credit scores per se, I look at the credit history.  If they had a rough patch years ago but have been making on time payments for 3 years, I approve it.  So I go through it tradeline by tradeline and note a pattern of a one time event vs consistent late payments of a number of years 


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. 

Can you ask her for anything from her lawyer about this?  There is a specific alimony calculation and there should be documents pertaining to her amount at this point if it is to start in January.  

Also, I don't do 3 x rent to qualify tenants.  

Tenant A is applying for a $1000 unit and makes $3200 a month.  Their car is $300 and their student loan is $700 and they have $100 a month in credit card bills.  Total cash to pay rent = $2100

Tenant B is applying for a $1000 unit and makes $2700 a month.  They have a $100 credit card payment.  Total cash to pay rent = $2600

So I do income minus monthly bills must be double rent, similar to what it takes to qualify for a loan (45% DTI)

Originally posted by @Peter Sinclair :
Originally posted by @Ihe O.:
Originally posted by @Peter Sinclair:
Originally posted by @Ihe O.:
Originally posted by @Peter Sinclair:
Originally posted by @Ihe O.:
Originally posted by @Peter Sinclair:
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 cant 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.

Why not pay it off. Because I understand what net present value is and If interest free credit had no value it wouldn't be there as an incentive.  

As you say credit scores have a myriad of affecting factors. Well most of which have nothing to do with the likelihood of the tenant continuing to pay rent for the very simple reason that that's not what a credit score measures. That's why I ignore them but even if I didn't it would be why I wouldn't be dogmatic about them

Credit scores are a tool used to determine how likely someone is to default on a debt. So when we see someone with a credit score of 800, we can assume that this person is not as likely to default on their debt compared to someone with a credit score of 650. Its a tool used to quantify risk.

It can be said that rent can be comparable to one’s debt payment, ie: mortgage payment vs rental payment, both need to be paid if you want a place to live. So, your statement that credit score has nothing to do with the likelihood of the tenant continuing to pay rent isn’t entirely true. Credit score is one many factors to consider when renting to a tenant, but not an the only thing to consider. It must be taken in consideration with ones job history, income, and other influencing, financial attributions. 

Wrong. Wrong and Wrong.

Credit scores measure how profitable a prospect is or will be to the credit lending industry. 

That's why lenders are willing to pay credit scoring companies for them.

That's why people who pay lots of credit card interest can get high credit scores even though it's an irresponsible way to borrow and they are only a paycheck away from being unable to meet their obligations (which is often why they have credit card borrowing).

That's also why credit scores  don't factor in things that  have a huge bearing on your ability to repay debt like your net worth.

 Well... DUH! A person who doesn’t pay their debts isn’t profitable! 

“That’s why people who pay lots of credit card interest can get high credit score...” - Ihe O 

If this were true, why do people with bad credit have higher interests rates? From your logic, people with higher scores would have higher interests rates.... Dont believe me? Here’s a simple infographic that was formed using just such data. 

Net worth doesn’t have a direct correlation to the ability for one to repay a debt. For example, I can own 100 acres of undeveloped land deemed to be worth 7 million dollars. But I’m 18 year old high-school dropout with no job and a maxed out credit card that I used to go visit my future wife that is locked up in Puerto Rico for drug smuggling. In this scenario, my net worth has nothing to do with my ability to repay. 

So, net worth doesn’t have as huge a bearing as you want to believe! 

The problem with credit scores is that a person who is barely solvent can have a high credit score and a person of who has paid their rent on time every month for the last 5 years can have a low credit score because of something that happened 6 years ago or because they don't engage in borrowing activities.

It also wrongly posits that you can extrapolate attitude towards rent from attitudes to other types of debt. The reasoning then becomes X's performance on repaying their student loan (for example) tells me how X is going to perform when paying me rent.

It doesn't. That's palpable nonsense. 

We can go back and forth coming up with multitudes of hypothetical, situational outliers. However, credit reports will continue to play a vital role in analyzing the risks for tenant screening because a person with bad credit is a higher risk than someone with great credit. This is also why evictions are reported to major credit reporting agencies, and companies such as Experian are creating their own rental payment reporting businesses such as RentBureau. This is because those lending companies you mention earlier can see that if one isn’t paying their rent, they’re probably not going to pay the debts, and vice versa. 

The fact that Experian are expanding to specialist products for  the rental market is acknowledgement that the existing credit scoring apparatus doesn't adequately do the job.

A person with bad credit is deemed to be a higher risk by a credit scoring model. That doesn't mean that they actually are. Also that is only applicable for the risks that that credit scoring model measures and sorry  it doesn't measure risk of defaulting on rent payments. 

Originally posted by @Thomas S. :

"A credit score does no such thing"

If you were a landlord you would know that as a landlord you would likely be the first person to not get paid and therefor the credit history likely directly reflects a tenants payment history.

Every landlord uses different metrics in evaluating risk in accepting applicants. The fact that this applicant does not meet my screening standards means she would be automatically rejected. I never consider a applicants personal life situations and do not look for reasons to ignore my standards. I work entirely from facts and stats not emotions. I do not care what has caused a person to be where they are in life. To do so would require that I compromise my standards. I am not a social worker. My goal is only to mitigate risk. Obviously this may result in excluding certain applicants that may have been good tenants but not having a crystal ball means I will error on the side of caution every time.

If individual landlords choose to take the time to determine if a applicant, that does not meet their predetermined screening standards, is worth the risk all they must accept that they are not being consistent and are placing their screening standards in jeopardy. I take a lot of personal risks in life but never when screening applicants. I have been burned too many times on that in my early years.

Nobody is asking you to violate your metrics, compromise your standards or to stop using credit scoring.

I am just telling you that credit scores don't measure what you are telling people they measure which means they don't necessarily mitigate what you are saying they mitigate.  That's all.

When I bought my first house in 2011 I barely qualified for a FHA loan from my credit score. It was because of a few credit card judgements/charge offs from 6 years earlier when I was 21 years old. Luckily they dropped off after 7 years and my score shot up, but anyone looking at my credit tradelines would have seen no late payments ever and only those two negative tradelines. But a bad credit score

I also am more willing to overlook medical collections and less forgiving of late payments on utilities 

Originally posted by @Ihe O. :
Originally posted by @Peter Sinclair:
Originally posted by @Ihe O.:
Originally posted by @Peter Sinclair:
Originally posted by @Ihe O.:
Originally posted by @Peter Sinclair:
Originally posted by @Ihe O.:
Originally posted by @Peter Sinclair:
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 cant 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.

Why not pay it off. Because I understand what net present value is and If interest free credit had no value it wouldn't be there as an incentive.  

As you say credit scores have a myriad of affecting factors. Well most of which have nothing to do with the likelihood of the tenant continuing to pay rent for the very simple reason that that's not what a credit score measures. That's why I ignore them but even if I didn't it would be why I wouldn't be dogmatic about them

Credit scores are a tool used to determine how likely someone is to default on a debt. So when we see someone with a credit score of 800, we can assume that this person is not as likely to default on their debt compared to someone with a credit score of 650. Its a tool used to quantify risk.

It can be said that rent can be comparable to one’s debt payment, ie: mortgage payment vs rental payment, both need to be paid if you want a place to live. So, your statement that credit score has nothing to do with the likelihood of the tenant continuing to pay rent isn’t entirely true. Credit score is one many factors to consider when renting to a tenant, but not an the only thing to consider. It must be taken in consideration with ones job history, income, and other influencing, financial attributions. 

Wrong. Wrong and Wrong.

Credit scores measure how profitable a prospect is or will be to the credit lending industry. 

That's why lenders are willing to pay credit scoring companies for them.

That's why people who pay lots of credit card interest can get high credit scores even though it's an irresponsible way to borrow and they are only a paycheck away from being unable to meet their obligations (which is often why they have credit card borrowing).

That's also why credit scores  don't factor in things that  have a huge bearing on your ability to repay debt like your net worth.

 Well... DUH! A person who doesn’t pay their debts isn’t profitable! 

“That’s why people who pay lots of credit card interest can get high credit score...” - Ihe O 

If this were true, why do people with bad credit have higher interests rates? From your logic, people with higher scores would have higher interests rates.... Dont believe me? Here’s a simple infographic that was formed using just such data. 

Net worth doesn’t have a direct correlation to the ability for one to repay a debt. For example, I can own 100 acres of undeveloped land deemed to be worth 7 million dollars. But I’m 18 year old high-school dropout with no job and a maxed out credit card that I used to go visit my future wife that is locked up in Puerto Rico for drug smuggling. In this scenario, my net worth has nothing to do with my ability to repay. 

So, net worth doesn’t have as huge a bearing as you want to believe! 

The problem with credit scores is that a person who is barely solvent can have a high credit score and a person of who has paid their rent on time every month for the last 5 years can have a low credit score because of something that happened 6 years ago or because they don't engage in borrowing activities.

It also wrongly posits that you can extrapolate attitude towards rent from attitudes to other types of debt. The reasoning then becomes X's performance on repaying their student loan (for example) tells me how X is going to perform when paying me rent.

It doesn't. That's palpable nonsense. 

We can go back and forth coming up with multitudes of hypothetical, situational outliers. However, credit reports will continue to play a vital role in analyzing the risks for tenant screening because a person with bad credit is a higher risk than someone with great credit. This is also why evictions are reported to major credit reporting agencies, and companies such as Experian are creating their own rental payment reporting businesses such as RentBureau. This is because those lending companies you mention earlier can see that if one isn’t paying their rent, they’re probably not going to pay the debts, and vice versa. 

The fact that Experian are expanding to specialist products for  the rental market is acknowledgement that the existing credit scoring apparatus doesn't adequately do the job.

A person with bad credit is deemed to be a higher risk by a credit scoring model. That doesn't mean that they actually are. Also that is only applicable for the risks that that credit scoring model measures and sorry  it doesn't measure risk of defaulting on rent payments. 

 Here’s a article I came across awhile back for when researching  social injustices people in poverty face, it supports your claims. 

http://heinonline.org/HOL/Page?handle=hein.journals/clear39&div=35&g_sent=1&casa_token=&collection=journals

I really appreciate having a constructive argument with you that didn’t lead to name calling or being offended. I wanted to keep this going but I have to focus on my finals 

While I really do believe there is a place for credit scores in tenant screening, the credit system in America can be improved. 

I️ would rent it to her. She’s paying a years rent in advance, you can put something in the lease to state that you can keep 2 months deposit if she leaves before the year and you have to refund her what’s left of the years payment. This would cover you for at least 2 months while you search for another tenant.