Waiting for the right tenants

[Susanna Perenboom]

Just closed on my first house hack about two weeks ago! Renovated the unit I’ll be advertising while I slowly put together my own living space. Advertisement has been up over a week, two great potential tenants came by for showings but weren’t even interested enough to fill out an application (I did lower the price after 7 days to match fair market value). Third showing is two newlyweds, husband admits he has a felony on his record (attempted assault with a BB gun four years ago), wife has a newborn, section 8 funded, no jobs, currently homeless. Section 8 would pay a full 6 months of rent and the deposit. Someone tell me not to get discouraged and take these less than ideal tenants.... first mortgage payment looms

[Jon Holdman]

When you try to get above market rent you limit your applicant pool to weak applicants.  Good applicants have choices, and will choose a well-priced unit.    Weak applicants have fewer choices and will accept an over priced unit from a landlord willing to overlook their weaknesses.  Don't do it.  Price your unit at or a little below comparable units and you'll have better applicants.

Realize its not the best time of the year to have a vacancy.  So it may take a bit longer to get a good tenant.

Write down your specific criteria and stick to them.  A felony four years ago is a no-go for me.

You write:

You're in a precarious position. You need to fix that. To succeed in the landlord business you must NEVER depend on collecting this months rent to make this month's mortgage payment. Cash reserves are essential to survival in this business. Six months PITI at a minimum, six months rent is better. PITI here I mean on the rental portion, not your personal portion of the property. Because sometimes you don't get this months rent. In a bad situation (lengthy eviction) you may not get several months rent. And houses have a way of waking up in the middle of the night and saying "please insert $2000 to keep playing". When its your house you may be able to deal with a major failure. Tenants won't tolerate that and repairs need to be done ASAP.