Minimum Qualifications what are your standards

Minimum Qualifications what are your standards

Property Manager · Twin Falls, ID · Member since 2017 · 42 posts · 11 votes

I just bought an out of town duplex (1 1/2 hours away). I’m in the process of advertising and listed in a local Facebook buy sell and trade. I was getting a lot of inquiries and I would say about 90% who don’t even qualify— bad credit, asking if I will work with them on the deposit... etc. So I decided to try just listing minimum qualifications with the listing as to weed out those who don’t qualify in the first place. Next thing I know I’m being shamed by multiple commentators for having to “steep” criteria and I’m contributing to homelessness in the area and it’s discriminatory criteria . 🙄

 I feel they are pretty standard for the market:

Applicant must have current photo identification and a valid social security number.

Applicant's monthly household income must exceed three times the rent. 

Applicants must receive positive references from all previous landlords for the previous 5 years.

Applicant may not have any evictions or unpaid judgments from previous landlords.

Applicant must exhibit a responsible financial life. Credit score must be a minimum of 600.

A background check will be conducted on all applicants over 18. Applicant’s background must exhibit a pattern of responsibility.

Applicant must be a non-smoker

Is this being unreasonable? I am new to the market but from most options especially those managed by a PM company are comparable to what my criteria is.

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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
7y

Those are reasonable. Just remember, you have to know "why" you have these policies so you can know "when" to deviate from them.

For example, requiring 3x the rent is pretty safe. But I've rented to people that only made 2x the rent because they were elderly, had zero debt and good financial responsibilities, excellent Landlord references, etc.

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  • Rental Property Investor · NJ · Member since 2018 · 152 posts · 56 votes
    7y

    Those seem fair to me.  No protected classes being excluded.

  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    Those are reasonable. Just remember, you have to know "why" you have these policies so you can know "when" to deviate from them.

    For example, requiring 3x the rent is pretty safe. But I've rented to people that only made 2x the rent because they were elderly, had zero debt and good financial responsibilities, excellent Landlord references, etc.

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  • Property Manager · Twin Falls, ID · Member since 2017 · 42 posts · 11 votes
    7y

    @Nathan Gesner That is an excellent point thank you!

  • Specialist · Fort Collins, CO · Member since 2018 · 557 posts · 191 votes
    7y

    @Shannon M. I think that your requirements are fair and line up with the typical standards for renters. As Nathan mentioned in his post, the monthly income could potentially be something you don't always stick with depending on how well the tenant fits into your other requirements. I would never waiver on evictions or unpaid balances to other landlords. Best of luck! 

  • Property Manager · Twin Falls, ID · Member since 2017 · 42 posts · 11 votes
    7y

    @Katie Stewart Thank you!

  • Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
    7y

    @Shannon M.  Those are pretty much my criteria. Now, I don't know your area, so I can't say if the criteria will actually get your place rented or not. Some have lower standards simply because of rentals in C or D areas. Personally, I would eliminate the verbiage of "Applicant must exhibit a responsible financial life" and "Applicant’s background must exhibit a pattern of responsibility". People can think that language insulting, and the term "responsible" is subjective. However, a 600 credit score and zero felonies is not subjective. 

  • Property Manager · Twin Falls, ID · Member since 2017 · 42 posts · 11 votes
    7y

    @Anthony Wick Thanks for the input! Very good points!

  • Architect · Papillion, NE · Member since 2015 · 1k+ posts · 840 votes
    7y

    You could use the words "suggested"  or "preferred" instead of "must".  Now in your head you know which ones are a "must" and will not waiver on.  This allows for wiggle room if needed and doesn't come across harsh. I think what you have listed is fair and reasonable but work on the wording.   Less is more some times.

    examples:

    Favorable Fico credit score > than 620 (Suggested)

    No significant criminal history. (Last 3 years)

  • Property Manager · Twin Falls, ID · Member since 2017 · 42 posts · 11 votes
    7y

    @Jim Adrian I like what you said a lot! Thank you for the insight. I’ll try that instead! 

  • Rental Property Investor · Orlando, FL · Member since 2018 · 301 posts · 354 votes
    7y
    @Shannon McEwan that looks pretty standard to me. My only critique would be regarding “Applicant must have current photo identification and a valid social security number.” Just require a copy of drivers license/Gov’t ID card during the application. Regarding SSN, I never want the tenant to give that to me due to the extreme sensitivity of it. We set up the background and credit checks for them to go in an provide there SSN directly with that 3rd party then the report comes to me. This might be the “sensitive” verbiage as there is a such a focus in this country right now on who’s a citizen and who isn’t ???
  • Property Manager · Twin Falls, ID · Member since 2017 · 42 posts · 11 votes
    7y

    @Kelly Iannone Great point! Thank you!

  • Rental Property Investor · NY · Member since 2018 · 571 posts · 332 votes
    7y

    Seems fair to me, except maybe for younger people credit score may not be as applicable.  For younger people who are still building their credits, if they have a higher score it probably just means they were on their parents account anyways. 

    One of the things PM that i spoke with did was assigning points to criteria.  you give them score of 1-5 based on each of your criteria (e.g. 5 points if credit score above 700, 4 if 650+, 3 if 600, etc. ) and have like a minimum score you have to reach to qualify. Just a thought. 

  • Property Manager · Twin Falls, ID · Member since 2017 · 42 posts · 11 votes
    7y

    @Michinori Kaneko I really like that idea! That’s a great way to deal with credit. This is a university town so I know that is likely going to be a problem with students starting out. Thank you!

  • Rental Property Investor · NY · Member since 2018 · 571 posts · 332 votes
    7y

    glad i could help :) cheers!

  • Property Manager · Saint Petersburg, FL · Member since 2016 · 182 posts · 51 votes
    7y

    @Shannon G., We use exactly the same criteria.  Pets only considered in properties we have already tiled and after we have been named as an also insured on bite insurance policy.

    Not sure by fair housing standards you can\should deviate as suggested above once they are stated.  You may find many frogs but the Prince applicant will cause you fewer headaches.

    Good luck with the screening:)

  • Property Manager · Twin Falls, ID · Member since 2017 · 42 posts · 11 votes
    7y

    @Elise Hazzard Thank you! That is a great point about deviation! 

  • Kalamazoo, MI · Member since 2016 · 45 posts · 13 votes
    7y
    @Shannon McEwan I'm going through the same thing where I'm at, except I'm not being scolded about it. Slim pickings during the winter time
  • Lender · Newark, NJ · Member since 2016 · 695 posts · 252 votes
    7y

    I had similar issue when I posted on FB. People will try to play mind games to make you break, don't let them get to you. Stick to your qualifications now and avoid headaches down the road with the wrong tenant. FB is still worth it just a lot of bad applicants you can rule out right away. Best of Luck.

  • Property Manager · Twin Falls, ID · Member since 2017 · 42 posts · 11 votes
    7y

    @John Pelaez Yes!!! I’ve been concerned especially where this is our first property. I’m thinking of only doing a 9 month lease so that it ends late July. It’s in a college community so I missed the best time for leasing.

  • Property Manager · Twin Falls, ID · Member since 2017 · 42 posts · 11 votes
    7y

    @Jonathan Soto Thanks for that reassurance! It seems all the crazies come out of the woodwork using Facebook. The advantage is it’s very easy to get an idea of what people are about through their Facebook. It’s crazy to me how much people share.

  • Investor · Lewisville, TX · Member since 2012 · 106 posts · 103 votes
    7y
    @Shannon McEwan My two cents’ worth: I don’t think it’s your criteria that causes the pushback. It’s the medium - Facebook is a giant editorial page, where everyone is an expert and thinks their opinion is golden. If you are getting inquiries, Facebook or elsewhere, then there are people who at least think they can meet the standards. As others have said, your terms appear reasonable. Stick to your principles, get the right tenant, and by the time you’re ready for the next one, you’ll feel much more confident about the process. Good luck!
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    7y

    Seems fair to me for the most part. 5 years on the landlord reference might be hard to verify in some cases. I might make an exception on credit score if it's related to old medical expenses. I also might let go a really old eviction (i.e. 15+ years). And if you're having trouble leasing the unit, I would probably drop the restriction on being a non-smoker and just say they can't smoke in the unit (although they likely will). 

  • Member since 2016 · 13k+ posts · 12k+ votes
    7y

    Don't be concerned about students credit scores. You will be having a parent as a guarantor and it is their credit score you check not the student.

    As far as your credit score requireent is concerned 600 is probably OK for  C class neighbourhood but if your property is B or better 600 is far too low. Anyone with a score as low as 600 is financially irresponsible. 

  • Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes
    7y

    Those who are doing the shaming are usually the ones who want to rent a 3 or 4 BR house for no more than $400/month -- newly remodeled, of course. nevermind that the low income apartments are $800 for a 3 BR. 

    The complainers are also the ones you DON'T want as tenants.

  • Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    7y

    @Shannon M. Whenever I advertise on facebook, I get a barrage of naysayers - rent too high, place is ugly/too small, qualifications too much, etc. I don't worry about trying to appease them because they'll never qualify as a client/tenant of mine anyhow, and anyone who would be my tenant can likely see past that nonsense.

    Personally, my only absolutes are NO evictions ever and no recent utility collections. The no evictions ever is because if someone has been through the process, they aren't scared of it anymore, and the fear factor is huge leverage in getting a non-paying tenant out before having to invest in what can easily be a 4+ month process here. Utility collections go hand-in-hand with that, if they don't pay their lights/gas, their home expense isn't top priority (over say, a cell phone payment or cable), so you can expect rent won't be top priority above all else.

    I rent mostly in low-c areas to immigrant populations, so my tenants don't always have social security numbers and credit scores. Non-smoker - they'll lie through their teeth on this one. References from landlords - I put very little value on the references I can actually get to call back.

    Biggest thing is to know what your market (other landlords) require. If you are in-line with them, keep adjusting your advertising and rental price until you get solid applicants. If your rent is too high, you'll have a ton of garbage applicants as the good ones will apply elsewhere leaving only those who don't care how expensive the rent is because they don't plan on paying more than a couple months anyhow. Also, timing can be key - if you list on the 20th, you get a mix of panic applicants that can't find anywhere else before they have to be out on the 30th so they'll take any unit, even if they know they can't afford it, along with professional tenants that think you'll be in a panic to place a tenant before enduring another month of vacancy and will fall for their "I can give you 1st month's rent and deposit in cash right now" pressure ploy.

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