Prospective tenant has a baby sitting business.

13 Replies

I have a duplex in a quiet neighborhood and have a prospective tenant who sounds very responsible, has good credit and income.  The prospective tenant just told me that she has a baby sitting business with 6 kids a day maximum.  I am the landlord and property manager and can see this being disruptive to the adjoining tenant.  

My experience tells me that if I have to ask then the answer is rarely yes however, I haven't found many prospects with good credit and stable income.  Does anyone have any experience with this?  Any opinions or advice would be helpful.  

My other prospective tenant is willing to pay a double security deposit (prepaid rent) because his credit is week.  I am leaning toward this prospect since I have the extra security deposit.  

Thank you in advance!

No on the baby sitting business.  

Check the second person's credit report.  Why is their score low? Is it education or medical debts?  Are they currently caught up and all payments current?  Is there debt to income ratio manageable?  In the cases where I see bad scores but more or less paying bills I do a mTm and double deposit if they can.

No businesses run out of the property. It is probably already in your lease, or should be. Liability is to great and requires special considerations that most residential set ups are not prepared for. Insurance for one, without a commercial policy, I doubt you will be covered if something happens.

Don't tell her she can have a home business on your property unless you check with the zoning first. If you tell her she can have a daycare there and zoning says she can't she will not be certified. If she doesn't get her certification and decides to break the lease courts could rule you rented the property under false pretenses,and decide she won't have to pay any fees for breaking it. Better safe than sorry.

I agree with Ed. No home business. The risk is too high for you. First time a child kids hurt the patents sue you. Keep looking for a good tenant.

Security is not rent, you can’t take it if they don’t pay.

Heck no on renting to her and I'm a pretty laid back kind of landlord. Take a harder look at the other person and if they are paying double deposit then I find it hard to complain. 

Double deposit only works if your state allows for it.  In AZ, we are limited to 1.5 times the rental rate.  So, even if Tenants offer, Landlords cannot require it or write it in the lease, so it is a worthless offering.

No to the babysitting business.  Too much liability for you.  Too much wear and tear on the property, too much nuisance with noise and cars going through (drop off and pick up).

Wait for someone else.  These two prospects both sounds like Tenants worth passing on.

I specifically prohibit any business type usage of any of our rentals. It’s specified in the lease as a clause. I don’t want or need any of the potential liability. 

I had people say nothing will happen. The problem is that when something does happen the victim will seek compensation from the person with the deepest pockets. 

As someone who has made this mistake before. If the unit is in an HOA, then HOA will likely strictly forbid running a business out of a home. Once the tenant loses that income stream, then they will have difficulties with rent.

Don't do it.

Never allow any business to operate out of a residential rental. If you wish to rent to a business invest in commercial properties. Never cross the line. 

Everyone posting asking a question about renting to a potential tenant either has no idea what they are doing or already knows the answer is no and is simply seeking confirmation. Unfortunately many giving advice on here also have no idea of the risk involved in renting to certain tenants and will give the wrong advice.  

Set your standards and hold to them. Taking a higher deposit on a high risk applicant is no better than flipping a coin. A deposit will not make dealing with a bad tenant eviction any easier. You will regret allowing dollars to make your business decisions for you. 

Proceed at your own risk.

Do not limit yourself to just these two applicants. I would never rent to someone with a home daycare business. So that is a definite pass. If something goes wrong you would get sued plus it would be a lot of commotion and wear and tear on the property. The second one would depend on why their credit is bad and if their income can support the rent with all of their other payments. If it was me I would keep advertising the property until I find a good tenant. It is better to sit empty than to take in a bad tenant.

Much appreciated.  This is all very good advice.  I have found out that if I have to ask the question then the answer is probably NO.  I will pass on each of these tenants and wait for the tenant that meets or exceeds my set standards.

Best of luck to you all.

I have seen that before. As mentioned it can cause parking issues and noise problems for the other residents. There are some states that allow day cares out of the house with certain license and permits. Even then they are only allowed so many kids per person ratio. The person doing this out of the house charges less money usually is how they get business over the regular day care places.

Even if they have insurance on the business part your insurance company for your property likely will not allow it. I have found people show you business insurance and then after words they cancel or do not renew it and don't tell you.

It's too much risk with no upside for you.

No legal advice given.

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