Would You Rent To This Applicant?

122 Replies

Hello  @Tim Porsche ,

I live in MN so our laws are little different but to my understanding of the laws these days.  You are not allowed to choose if you accept someone or not.  You create a guideline that abides by the fair-housing laws.  Then if your applicant is approved you must approve them no matter what you think of them.  Their e-mail doesn't matter, her story doesn't matter.  This is to protect you against a lawsuit.  I am not an attorney and you may want to advise one.

Best wishes!

As landlord, your approach should be: market your property, get as many applications as possible, interview the best ones, and chose the one who you like and trust most. I think this is a reasonable approach, right? Considering this, is this lady the best applicant you got?

Originally posted by @Peter Sinclair :

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? 

She's not a bankrupt - she filed bankruptcy protection to defend herself after divorce. 

Her credit cards were not maxed out because she's a crazy spender, it happens during divorces all the time. Bankruptcy will take care of these.

If she doesn't have money in the bank then she won't deposit 10 months of rent, will she? End of discussion right there 

She might make zero for now - it's as good as $3K/mo or whatever - her 10 month rent in my account will cover that. For 10 months she'll be on her feet or she will move out.....so what? You've got 10 months rent and possibly good tenant for longer than that. Her children live close by - they always can help, it happens more often than not.

Alimony would help but for 10 months of the rent advance it also doesn't matter.

When you manage other people rentals, yes, you have to follow the rules to protect yourself. When you're renting your own property - it's up to you. As a broker, I'd talk to my landlord client to show all the advantages of the situation and if he'd disagree - it's his loss. For my own rental I'd get this tenant in no time.  

I actually had such situation but in my case it was only 3 months rent on deposit. I rejected because it was July and I could end up with empty house in October. Not a good season for rent here.

10 month from now it will be September and there will be apparent if she's a good tenant or can't keep up (water/sewer bills, checking up during regular inspections). After all you can sign 6 month lease and take less money.....if you can't re rent it in June - then it's not a good rental to start with.

After all, what if property is empty until April? Isn't it better to get some rent and then find someone for the next couple years? 

But from my experience, these kind of tenants make the best long term tenants, who pay on time. Even on fixed income which is less than 3xrent, they still manage never pay late fees ;)

In CT we are not allowed to collect a year rent in advance. Only first months rent plus security. We can’t even hold the $ for the tenant as they are the ones that have to disperse it. Check with your state!

@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. 

If you're asking the question I'd go with no. Listen to the little voice.

A couple of years ago I analyzed an applicant who wanted to pay a year in advance (would have been 30K) he also had a defaulted cell phone bill of $250ish. I concluded that he wasn't the sort of person who feels the need to follow rules when he disagrees and passed.

Had another guy who was in a transitional phase. Decent income but problems with a failed business. Nice guy up front, good explanations. Turned out to be the biggest pain in the *** tenant I could imagine and couldn't get rid of him fast enough.

Trouble tends to follow people and effect those they associate with.

Originally posted by @Irina Belkofer :
Originally posted by @Peter Sinclair:

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? 

She's not a bankrupt - she filed bankruptcy protection to defend herself after divorce. 

Her credit cards were not maxed out because she's a crazy spender, it happens during divorces all the time. Bankruptcy will take care of these.

If she doesn't have money in the bank then she won't deposit 10 months of rent, will she? End of discussion right there 

She might make zero for now - it's as good as $3K/mo or whatever - her 10 month rent in my account will cover that. For 10 months she'll be on her feet or she will move out.....so what? You've got 10 months rent and possibly good tenant for longer than that. Her children live close by - they always can help, it happens more often than not.

Alimony would help but for 10 months of the rent advance it also doesn't matter.

When you manage other people rentals, yes, you have to follow the rules to protect yourself. When you're renting your own property - it's up to you. As a broker, I'd talk to my landlord client to show all the advantages of the situation and if he'd disagree - it's his loss. For my own rental I'd get this tenant in no time.  

I actually had such situation but in my case it was only 3 months rent on deposit. I rejected because it was July and I could end up with empty house in October. Not a good season for rent here.

10 month from now it will be September and there will be apparent if she's a good tenant or can't keep up (water/sewer bills, checking up during regular inspections). After all you can sign 6 month lease and take less money.....if you can't re rent it in June - then it's not a good rental to start with.

After all, what if property is empty until April? Isn't it better to get some rent and then find someone for the next couple years? 

But from my experience, these kind of tenants make the best long term tenants, who pay on time. Even on fixed income which is less than 3xrent, they still manage never pay late fees ;)

 She filled for ch. 7 bankruptcy... I’ll post a link below that will explain what a joint ch.7 bankruptcy entails

(http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics)

How do you know her credit cards aren’t maxed to her own doing? Please provide proof. Not “she said so”! If I tell you the “global warming is a hoax, I researched it through my friends FB posts”. Would you believe me? 

Yup, it is quite obvious that saying you have $60k is not the same as actually having $60k.. Can’t argue against the truth. 

“She might make zero for now - its as good as $3K/mo or whatever....”. Maybe something got lost in translation.. elaborate please. 

If you applied for one of my units, having the same circumstances (bankrupt, negative credit history, and inadequate income) I would kindly let you know that you don’t meet the minimum qualifications, and I wish you the best in finding a suitable place. 

Since I’m from the sunny, Los Angeles area I don’t have to worry too much about a slow season or not having a decent pool of applicants to choose from. So I cant relate to having to time my renters move-in and move out dates based on weather and seasons. So, if the OP has such issues then he can definitely take those into consideration when making his decision. 

Its your money and your property, so if you feel like she’ll make a great tenant then that is your personal opinion, and I respect it. This is why the OP created such a thread, to find out the experiences of others and how they handled such situations. While you may disagree with others that go against your opinion, it does not mean they’re wrong. 

@Peter Sinclair we just exchange of our opinions - that's it

I think big part is that we have totally different markets - Cali doesn't have seasons - it's always summer :)

Here, in Cleveland, I have to think twice when turning down a tenant - for myself or a client. There are plenty of houses which stays empty for 7-8 month, it's huge losses for the owners.

1bed/1bath condo, for example, can be rented for $750 and it's easy to do, however, credit is not a consideration at all because people with good credit can buy this condo - it can be sold for $15K with some repairs needed or $30K move-in ready.

HOA, taxes, insurance, rental inspection from the city - $250/mo, so the choice is: do I want $500 free cash flow or $250/mo expenses?

Everyone discuss the situation from their view on their own market while Nobody knows how it's really is. 

Mine is very seasonal and I won't take chance to turn down decent tenant from September to March.  There will be plenty of them to choose from in April and I might get more picky. But to have vacancy for whole winter just because I want Tenant's FICO 650?!? No way :)))

I just jumped into this thread but here is my philosophy on renting to anyone. My market happens to be Cleveland. I like to keep it quite simple. I follow 5 basic questions and I do not care what your sob story is and or how much you are willing to give me up front. Cleveland is a huge rental market with a never ending supply of tenants to pick from. 

Below are my questions

1) Ever been evicted? if yes auto denial...does find shelter to be the most important bill

2) Every been convicted of a Felony? if yes auto denial

3) What is your credit score? not concerned on actual score but when I pull the report I look at how my outstanding hits they have (5 or more denied) I will not be the next on that list

4) What is you monthly income? I only rent to those with a real job (w-2 verifiable income) I do not accept any type of voucher systems, child care, alimony, disability or cash job under the table. I want to be able to garnish your wages if you ruin my house. 

5) Do you have any pets? I again do not allow pets. Pets stink up the house even once the tenant move out.

Lastly I charge everyone $40 for a rental application. I run my rentals like a business and not a hobby. If it is going to cost me money then I am going to charge the tenant for it and make a profit.

Happy House Hunting

Obviously we are all going to be split on whether or not to rent to this applicant. I think the more important thing to think about is whether you are going to put this much thought into future applications. Will you be fair to all applicants going forward and consider EVERYTHING going on in their personal lives that may be effecting them(credit, divorce, etc.) before denying them?Or will you stick to the qualifications that you initially set?

Just my 2 cents

Just to update everyone, I ended up going with the other applicant instead due to the fact that they met all my qualification criteria including having excellent credit, 3x the rent in verifiable income, and good landlord references. Once I looked over his application and verified everything it became a no brainer. Thanks for your feedback, stories and suggestions everyone, it is much appreciated. Gave me lots of food for thought going forward :)

Sorry if somebody else has pointed this out already (don't really have time to read through 5 pages of replies!), but I think it's worth noting that her husband has ruined her credit by not paying his debts...and he is the source of income that will bring her up to 3x the rental amount in monthly income. This seems dangerous. 

How much stress are you willing to take on?

Sounds like it's going to bring a few issues BUT IF she's going to pay you a full years rent upfront take the money. Least you know you've been paid.

I AM NOT A LAWYER PLEASE HIRE ONE FOR LEGAL ADVICE

Well pretending to be the owner might work if one doesn't post to the internet about pretending to be the owner.

Security deposits are limited in some states, and any "last month's rent" is considered a security deposit.  I looked up Pennsylvania and that's one of those states.  You can hold two months for the first year then have to give one of them back.

"personal" decisions based on subjective criteria just prove the objective criterias wasn't so objective.

As a tenant, do I want my landlord posting to the internet AT ALL?  Nope.





She might be working in sex work or something and not want to endure the paperwork.

Speaking of which, shouldn't the tenant do the credit check since they are extending credit to a landlord who might abuse the money and not keep up the place?

Just remember that today's tenant screening has scared tenants into silence regarding serious problems anywhere they live.  They'll just quietly move and let the building literally fall down after they're gone.  Do you have a child living off-campus at a large university?  if the building is about to fall down, no student is going to risk a blacklist to warn anyone, they'll just leave.  

Landlords have the power and tenants are far more vulnerable, yet the latter thinks it should beg for housing. Ask Marla Hanson's ex-landlord for a reference sometime.

@Tim Porsche

I’ve rented to a mother of 2 children that was getting divorced. She had a crummy job but she busted her *** and was never late on payments. Great tenant.

My in laws were horrible with money always behind, robbing Peter to pay Paul. They even put the electric bill in my wife’s name when she was 9! Only found that out when she turn 18 and collections started calling! They purchased a house then lost it in foreclosure. They separated and my mother in law got a apartment by herself. She got all caught up on her bills. And actually had money in the bank. Come to find out my (deadbeat) father in law would take the money out of the account and go to the bar.

I’d check with her lawyer possibly and confirm the alimony. I usually my gut when I talk to ppl and see if there being truthful. If you have other qualifying applicants I’d probably pass. But if you feel good about the situation and it won’t break you if she didn’t pay, why not.

I would like to know why someone would be sitting on a decent amount of cash and still be late on a maxed out credit card. While the debt might be part of the reason for separation, if I was sitting on 60k I would at least make the minimum payment until things were sorted out. 1k in alimony sounds great until the spouse loses their job or stops paying. 

@Tim Porsche Does your state have any limits on prepaid rent amounts? If so, how much of the 1 year upfront rent payment be considered a refundable deposit? I have no problem helping someone out that is going through but just be wary of someone playing at your heart strings to later take advantage of your niceness. Let me know your thought!