Tenant wantd to pay the whole year rent upfront.

8 Replies

I had an open house of my rental last weekend. I got an applicant saying Experian couldn't find his record. But he has SSN, files taxes, and just sold his mother's house after her death. He wants to pay for the whole year rent if his credit report comes back blank. He has a job as a cooker in a bar, earns about $1500 a month. Is it allowed to accept one year rent by law? If it allows, would the credit matter? Background check is still required. Just wondering about the credit. Thanks.

No, don’t accept.  This is a red flag.  He’s trying to get you to overlook negative things that you’ll find if you look hard enough.  Also, much harder to evict if he’s paid in advance.

I had a potential couple also ask to pay 1 year in advance, totaling over 10k for the years rent. They paid the application fee ($50 dollars)  and after they left the open house, texted me about having a pet. I told them that its an extra $25 a month for the pet. Through text, they went off on me and told me to they're not interested! I mean, really, whats an extra $25/month when they are willing to pay over 10k in advance for the year? Plus, most places charge extra for pets, so I suppose they shouldn't have been too shocked. At that moment, I realized the mess I couldn't of gotten myself into had I accepted that couple's offer. Flying off the handle about something relatively small, I couldn't imagine what it would of been like having them live there.

As others posted here. That is a huge red flag!

@Yan Guo I had a tenant pay 1 year in advance on a C+ or C type property. Never had a single maintenance call in the whole year. One of my workers went over there after the hurricane to check the house out and said there were about 15 people living in the house. Moved out at the end of their lease and left about 2 months worth of rent in damage. All in all it was a good deal for me, but probably could have gone much worse, for what it's worth. 

There is no way his credit is blank unless he has not applied for a credit card or loan in the past decade. Tell them YOU'LL do the background checks.  I use tenantbackgroundsearch.com.  I like that one because the landlord enters all the tenant info (SSN, etc.) which the tenant gets an email to verify.  It makes me nervous with some of these services that rely on the tenant to input the data (which you do not have an opportunity to verify).  If this person is unscrupulous, what is preventing them from entering information from a friend (or some other hapless victim)?  You'll never know unless you are the steward of their info and enter it yourself.  I agree with others that he is trying to hide something, and hoping you'll overlook the background checks by figuratively waving a fistful of cash in your face.

Many good reasons mentioned above to avoid a tenant that wants to prepay all the rent.  Another reason is it can make it problematic to evict for a lease violation after you "accepted payment" for that term already.  (Kind of like accepting rent payments from a tenant after you've filed for eviction).  More likely than not, some funny business is planned.  I say AVOID.

@Yan Guo   I'm going to be the devils advocate, I would do the background and credit check myself, contact previous landlords, etc. If nothing shows up bad, I wouldn't necessarily not take the full year. With them just selling his mothers home, its not uncommon for people in that situation to pay up bills in advance, especially if they know they're a bad money manager and would be tempted to spend it on something else. One of my best tenant/customers is a guy who draws a military pension and purchased a property from me on seller finance terms, I was willing to finance it for 10 years to make payments around the same as what rent would be, but he wanted to only carry it 3 years to pay off fast. His payments are over double what rent would be, and he has never been 1 day late.

Credit check done by tenants is in most cases falsified.

As most have said full year rent up front is normally a red flag. It is used as a bribe on novice landlords to buy their way into a property they would normally never qualify for.

Having to hold a tennat advance payment in a separate account and drawing off the monthly rent has no advantage over a tennat simply paying monthly. Additionally they can legally demand all their remaining advance payment back at any time since it remains their money until used up.

Best policy is to always operate under normal landlord tennat lease agreements....no advance payment bribes.