Qualify first time renters

6 Replies

I manage what I call "Class C" homes defined as "clean, safe, and functional."  These are not fully rehabbed and may be somewhat dated, but for someone on a budget they can be an excellent choice.

I often get a lot of contacts from peoples who are first time renters.  Often young, no credit, no land lord history.  Normally, I require good in one of those areas (credit or LL).  Criminal has to be clean and jobs/income have to be stable (6 months or more at current job, and 1 year minimum at past job) and sufficient (minimum 3x rent income).

Do any of you accept folks with no credit (not bad credit...NO credit) AND no land lord history, and if yes, what do you require to ensure it goes well?  I usually require a co-signer who is rock solid (awesome credit, squeaky clean background, owns local real estate, 6x the monthly rent minimum).  Any other options you have tried that worked out well?

Originally posted by @Erik Whiting :

I manage what I call "Class C" homes defined as "clean, safe, and functional."  These are not fully rehabbed and may be somewhat dated, but for someone on a budget they can be an excellent choice.

I often get a lot of contacts from peoples who are first time renters.  Often young, no credit, no land lord history.  Normally, I require good in one of those areas (credit or LL).  Criminal has to be clean and jobs/income have to be stable (6 months or more at current job, and 1 year minimum at past job) and sufficient (minimum 3x rent income).

Do any of you accept folks with no credit (not bad credit...NO credit) AND no land lord history, and if yes, what do you require to ensure it goes well?  I usually require a co-signer who is rock solid (awesome credit, squeaky clean background, owns local real estate, 6x the monthly rent minimum).  Any other options you have tried that worked out well?

Just briefly, I get a good handle on whether they smoke or not first, how many animals, then if they have good employment. No credit is fine for me. Means they have no debt. Lack of rental history is a little tougher. If I can't get a cosigner for at least 6 months, I'll only do m-m, with a 6 month hold on deposit I keep for voluntarily leaving.   If I ask them to leave, it is refundable.  

So much is from the gut. Did they look you in the eye and shake your hand? Did they give you their full name up front or stay anonymous for too long? Clean? Respectful? Have a long story? Are they 40 yet claim to have never rented before?

If criminal and sex offender checks come back negative, they aren't smoking and throwing up gang signs on FB, the worthy get a chance from me. Knowing they are building rental history is often an asset for you.

Yes I do.

You are doing what most us are doing i.e. income needs to be 3X rent, proof of income, clean criminal and eviction check (sometimes "1st time renters" DO have a rental history but conveniently forgot that they just got evicted).  Also,  you should ask for proof of identity as well.

When I can't get a "perfect" applicant and something like this comes up, I may ask for an increased deposit.  Certain screening services will actually recommend this.

I do not waste time screening first time renters. I prefer they cut their teeth on another landlord due to the unstable nature of their lives. Once they have gone through their initial start in life they become more stable and I am then in a better position to put the effort into training them. They would still however require 2 years employment (same employer) and meet my minimum credit score requirements before I would seriously screen.

First time renters.. no, young renters...... maybe

The caveat being that I do not have C class properties and I am never desperate to find applicants.

@Erik Whiting well being a young renter and landlord myself I think I offer some interesting insight.

When I rented for the first time I had a co-signer. I haven’t had one since. Each time I moved to a different apartment it has often been for a new job. Hence I wouldn’t have met that one requirement of yours.

However, I have typically made 8-9 times rent, so I should be viewed as a somewhat stable tenant.

I agree with @Steve Vaughan . Go with the gut, avoid smokers and everything probably works itself out

Some people use co-signers. I don't do this because the co-signers tend to fight when I try to hold them responsible. No matter how many times I explain it, the seem to forget they are "co-signing" on the lease.

What I do accept is an increased deposit. A low-risk tenant pays a deposit equal to one month of rent. A slightly higher risk would require 1.5x rent. A tenant with no landlord reference or with no credit would require first, last, and deposit.

Tenants with no Landlord reference AND no credit are rejected.

First time tenants are best delegated to hobby landlords that place less importance on cash flow and risk aversion.

If you are operating a business and establish strict screening standards a applicant with no tenant history, no credit history and a short employment history would never pass screening. To rent to them would require faith alone.

The only business that should ever rely on faith is a church.

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