Help me pick a tenant

25 Replies

I have 8 units 1 mile out from the university student center and on the edge of what might be described as "the hood." These units rent for 450 + gas & electric and pet fees.

The former landlord mostly rented to students. and would just leave units vacant until he could get one. Now it's kind of "my first place" apartments with students just out of dorms or young people with first jobs except for one unit with an old single lady.

I have two applications for the vacant unit

A grandma and her husband of many years that works at the grocery store next door for 15 years and also with hers and partner's social security make about 3x rent. She's lived at her current place 4 years and previous 5 years. Her 30ish daughter who is also a longtime employee of grocery filled out online app for her. She has no car so she really likes the location right next to work. She told me she had an eviction but I checked and no evictions have been filed in the county court on her or her partner. I'm calling the landlord tomorrow but it's a small local property management company and the "eviction" was five years ago so I don't know if they will even remember her.

and

a my first place recent 2-year graduate working two jobs that makes 2.5x rent. Very nice young lady. location is right in between both her jobs. Currently living at home.

I liked them both. Neither have pets or criminal records.

Grandma saw the apartment first and got in application about an hour ahead of my first place girl.

Would you care more about the reported eviction that wasn't or the lack of rental history? or something else? Who would bigger pockets pick? or what additional info would you ask for? I'll check refs next week.

1. The reported eviction doesn't matter much because she's living with her grandparents who are stable. They would likely meet my requirements and be approved.

2. The second gal doesn't meet my income requirement of 3x the rent so she's out. Besides, she's working two jobs just to make 2.5x the rent. Those are part-time jobs which are very volatile and she could see her hours cut or her position eliminated at any time. Too risky.

Did you check the credit for the applicants? I would recommend doing that before making a final decision. I would go with applicant #2 from the info provided up to this point however.

Be aware that many people use the term "eviction" incorrectly. Ask more about the circumstances around the "eviction". People are often evicted from places when ownership of a property changes hands for no reason other than the owner wanted to sell the place empty or the buyer wanted to start with a clean slate of tenants of their own choosing. 

The evictions to be wary of are those that occurred because the tenant didn't pay rent or caused significant property damage or broke other terms of the rental agreement. When a tenant receives a legal notice to leave a property and fails to do so, and the matter ends up in court, it's serious. If the tenant waits until the sheriff shows up, that's the worse.

We accept tenants with a blemish on their past rental history if they've made amends and changed their ways. Positive rental history since the time of eviction is one way to demonstrate a change in behavior. Paying a previous landlord all that was rightfully due to them is another.

From what you share of the two applicants, I would go with #1.  Obviously she is familiar with the neighborhood and feels comfortable there. She has rented her current place for a significant amount of time and would likely be a long term tenant with you too. Verify the information on the application and complete your background checks. If something significant turns up that would be a deal breaker for you and the risk couldn't be mitigated by a higher security deposit, then move on to #2. 

#2 seems to be a higher risk due to lack of rental history, less stable work, and less income. If the location is not ideal for her, she's more likely to move out to someplace better when her circumstances allow her to do so. Turnovers are costly.

It's important with tenant selection to establish clear rental criteria from the beginning that complies with all applicable laws for the jurisdiction of the rental location. Then screen applicants using that criteria.

These types of posts always make me cringe a bit- when you start "picking" a tenant, you are in dangerous fair housing territory. As a landlord or PM, you should have specific (non-protected class) criteria developed and in writing, for who you will rent to. Once you have an applicant that meets that criteria, you rent the property to them. 

You've alluded to considering familial criteria above, which can get you in trouble. I don't think you are choosing a tenant based on this, but if you had this conversation with a fair housing tester, they would argue otherwise. In my area, law students and housing authorities send "actors" out to walk properties and fill out applications in order to see who violates these laws and they file hefty fines regularly.

The benefit of defining your criteria is that it makes it really easy to decide who you rent to, no more comparing applicants. 

Good luck!

Originally posted by @Corby Goade :

These types of posts always make me cringe a bit- when you start "picking" a tenant, you are in dangerous fair housing territory. As a landlord or PM, you should have specific (non-protected class) criteria developed and in writing, for who you will rent to. Once you have an applicant that meets that criteria, you rent the property to them. 

You've alluded to considering familial criteria above, which can get you in trouble. I don't think you are choosing a tenant based on this, but if you had this conversation with a fair housing tester, they would argue otherwise. In my area, law students and housing authorities send "actors" out to walk properties and fill out applications in order to see who violates these laws and they file hefty fines regularly.

The benefit of defining your criteria is that it makes it really easy to decide who you rent to, no more comparing applicants. 

Good luck!

I actually considered not posting at all because I do make every effort to play by the rules and I knew how it would sound. However, I decided to post hoping for some bp perspective (or additional criteria to consider) because I hate being in this situation. I do have criterea which I use to evaluate and both of these tenants are acceptable. However, I only have one apartment, thus I must choose. I wanted to hear other perspectives because well the one application was 60 minutes earlier isn't much of a reason.

I would choose grandma hands down. Not an issue regarding fair housing, you are safe to choose the most qualified which the old folks definatly are.

Always choose based on what is best for your personal business. Fair housing is little more than the boogie man when you have clear screening criteria you can legally fall back on. In this case income. Any other criteria you may have personally you can keep to yourself. ;) What the housing police don't know won't hurt you. Keep it to yourself and use justifiable screening standards to eliminate any applicant you choose. This is why you establish high standards and stick too them, no wavering or you will place yourself under a potential microscope.

@Jill F. actually 60 minutes could be (and possibly should be) the determining factor. All other things being equal, if you went with the 2nd applicant and the 1st applicant filed a Fair Housing Act discrimination suit against you, what would be your defense for not having picked the 2nd applicant? If both of them meet your criteria you're safest off choosing the first one to apply, and your reason for denying the 2nd application is that there was a qualified applicant that was "in-line" before them. I understand you're just checking to see what other criteria people may be using, but it's a risk to change your criteria in the middle of the process AND you've posted it on BP which makes it public knowledge now. All that being said I'd go with applicant #1. Good luck!

@Jill F. Grandma without question. She's stable. Turnover of tenants is expensive and girl #2 will be gone in no time.

Good luck to you!

@Nathan G. The first tenant isn't living with Grandma, she is a Grandma or so she told me; she lost her house in the financial crisis. The other tenant just graduated with associate degree and is still living at home.

@Michael Noto No, I haven't yet because for the most part, everyone willing to live in this neighborhood has crappy credit and I hate to charge people that won't meet my other criteria the fee so I look at everything else first to rule out unacceptable tenants (court records for multiple evictions and violent crimes, bad references, facebook posts showing undisclosed pets etc,etc...)

@Marcia Maynard She told me she and her partner (of 40+ years) were sharing the place with other tenants who were not paying and that she didn't have the money to pay it all so she moved out. They must have gotten a 3-day notice and she assumed the others remained and were evicted and that she had an eviction filed against her because she was on the lease. However, when I checked court records no eviction showed up. I guess she must just be using the word incorrectly...I didn't realize this was such a common problem. Usually people tell me they don't have any evictions and then I find multiple filings; finally one prospective tenant told me that she didn't think an eviction filing "counted" if the eviction was eventually "dismissed." Now I say no recent history of evictions or eviction filings or multiple evictions.

Thank you all for you perspective.  @Corby Goade , "picking a tenant" makes me uncomfortable too. I really I wish I had two apartments so that I could rent to both of them. Both of these meet my criteria for these units so I was looking for help choosing based on info I have but even more useful would be other criteria so that I have to "choose" less often. However, In this neighborhood, I rarely get two "acceptable" choices on day one of showings so I don't want to be too picky. The other tenants in these buildings right now are great.

My current vacancy was due to my last very likeable newbie who just got non-renewed for letting bf sell drugs in the parking lot but I have a number of my first place renters that are great. Its not fair to penalize this girl for last girls activities but 60 minutes ahead on the app didn't seem reasonable way to choose either. So thank you to all who share what they would do in this situation.

@Jill F. I misunderstood and thought the granddaughter was applying with the grandparents. I now see she was just helping them fill out the application. They meet all your qualifications and sound like the best option so I would approve them immediately.

@Jill F. Add me as another vote for grandma. She has the income, seems stable, and would likely be a long-term renter being that her job is right down the street.

#2 choice looks risky to me. The income isn't quite there, and if she loses one of those jobs, she's in trouble.

@Jill F. ,

No question--- Grandma would be my top choice!    

Her household makes more, has more history, more stable, and also-- I love older people.   Maybe it's a generational thing, maybe I'm a jerk, but I love working with +50! I would never discriminate based on age... but from my experience, I've never had a stressful older tenant.   They'll have so much more knowledge about houses, a lot less drama.... the other girl is brand new, and would likely struggle with bills, and may move for a better paying job-- whereas grandma has other people to help cover the bills...  sign with Grandma ASAP!

Anyone who has been evicted is automatically disqualified from my properties. That would make this choice easy. 

If I was choosing between these two, I would probably choose the girl. Someone who is 60 and is married for 40 years, but still doesn't have a car and has to rent a low-rent unit, AND share a unit with other people (and they were the ones who got evicted, so the story goes) probably doesn't have a very good set of skills when it comes to managing money (or life, for that matter). If she's been at the grocery store for 15 years, why would she need to be evicted?

Well, those are my thoughts. I know they sound hard-hearted, but I can understand someone who's 21 or 22 and just starting out getting one of your places; I can't fathom someone who's 60 and married all their life getting one. 

Grandma for the win!! Good rental history (long standing tenant aka gold in my mind) and stable income. 

In My Opinion,  First come, First to qualify ! 

I have a responsibility to the financial institution. Due diligence on the loans. And to make the best decision for the situation.  Bad things happen to good people everyday. If they had great credit they would be buying instead of renting.  I have been known to drive by and look at the current house they are living in. Are they taking care of it?  Or does it look like a bomb went off?

People kill me. I am repairing a house now that the dog and or dog's they DIDN"T HAVE.  Tore up my house pretty good, and marked his spot everywhere. 

Originally posted by @JD Martin :

Someone who is 60 and is married for 40 years, but still doesn't have a car and has to rent a low-rent unit, AND share a unit with other people (and they were the ones who got evicted, so the story goes) probably doesn't have a very good set of skills when it comes to managing money (or life, for that matter). If she's been at the grocery store for 15 years, why would she need to be evicted?

My mother lived until the age of 96 and never had a driver's license. My sister has severe diabetes and can't drive anymore. My godson delayed getting a car because public transportation was a better option where he lived. I wouldn't see not having a car being a problem. In fact it's a bonus for the landlord. We have an 8-plex and two of our tenants don't have cars. This reduces the number of cars parked on our property. Sweet.

Secondly, the OP's property is in a low-rent neighborhood, so the pool of applicants will likely be more in line with C/D properties than A/B properties. Rental criteria and terms of agreement can be adjusted to fit the market. We work with people with less than stellar history. If they didn't do something too egregious, we may accept them with a higher security deposit to account for our higher risk. For evictions, we would require them to make amends first to the previous landlord.

Thirdly, people choose shared housing for a number of reasons. I wouldn't make assumptions about the money management skills or life skills of the prospective renter based on the information presented here. Seasons change and so do the chapters of our lives. Renting is becoming a better option for many folks in all income and age brackets. I know many upstanding seniors who've been priced out of owning their own home, at no fault of their own. As well as many who chose to rent because they prefer to leave the maintenance to someone else.

Originally posted by @Marcia Maynard :
Originally posted by @JD Martin:

Someone who is 60 and is married for 40 years, but still doesn't have a car and has to rent a low-rent unit, AND share a unit with other people (and they were the ones who got evicted, so the story goes) probably doesn't have a very good set of skills when it comes to managing money (or life, for that matter). If she's been at the grocery store for 15 years, why would she need to be evicted?

My mother lived until the age of 96 and never had a driver's license. My sister has severe diabetes and can't drive anymore. My godson delayed getting a car because public transportation was a better option where he lived. I wouldn't see not having a car being a problem. In fact it's a bonus for the landlord. We have an 8-plex and two of our tenants don't have cars. This reduces the number of cars parked on our property. Sweet.

Secondly, the OP's property is in a low-rent neighborhood, so the pool of applicants will likely be more in line with C/D properties than A/B properties. Rental criteria and terms of agreement can be adjusted to fit the market. We work with people with less than stellar history. If they didn't do something too egregious, we may accept them with a higher security deposit to account for our higher risk. For evictions, we would require them to make amends first to the previous landlord.

Thirdly, people choose shared housing for a number of reasons. I wouldn't make assumptions about the money management skills or life skills of the prospective renter based on the information presented here. Seasons change and so do the chapters of our lives. Renting is becoming a better option for many folks in all income and age brackets. I know many upstanding seniors who've been priced out of owning their own home, at no fault of their own. As well as many who chose to rent because they prefer to leave the maintenance to someone else.

 All of that may be true, but the OP's housing is definitely low end. No matter how anyone phrases it, to me someone that is 60 or pushing 60, and is married, and still does not own their own home and has to rent in the edge of the ghetto has not made good use of their finances over time. Apparently grandma lost her house in the financial crisis - well that was 10 years ago, and people only generally lost their houses if they had mortgages on them that changed in amount (i.e. variable, balloon, etc), and supposedly grannie has been at the same job for 15 years. That says to me that they (probably) lived high on the hog, and when the bill came in she didn't lose her job and couldn't pay, they just had no equity left (if they ever had any) and went on down the road. 

In other words, these aren't people who are making this decision out of life choice. They had a home and lost it. Then they lived somewhere else and got evicted. Despite being "stable" income earners. 

Maybe I've just worked with the public for too long - most of my career - but I've heard every sob story under the sun and most of them are just that. My grandparents were first generation Americans who were just starting their lives as young adults when the Depression hit - my grandfather spoke broken English and better Italian than English, and had a 5th grade education. Both of these people came from the ghettos of Newark, and despite working menial jobs all their lives, managed to scrimp up enough money to eventually own their own home outright. They had plenty of bad shakes too, but they never ended up applying for a $450 apartment rental in the ghetto. And my grandmother didn't drive :)

@Jill F.   An additional thought... The previous owner seemed to aim for the student niche and those renting for the first time. The one "old single lady" who is currently there may find it refreshing to have a neighbor closer to her own age. Could work out for the best. As you know you can't discriminate on age, but it can make a difference for those living there.

Please let us know what you decide to do and why!

Originally posted by @Kevin S. :

@Jill F. actually 60 minutes could be (and possibly should be) the determining factor. All other things being equal, if you went with the 2nd applicant and the 1st applicant filed a Fair Housing Act discrimination suit against you, what would be your defense for not having picked the 2nd applicant? If both of them meet your criteria you're safest off choosing the first one to apply, and your reason for denying the 2nd application is that there was a qualified applicant that was "in-line" before them. I understand you're just checking to see what other criteria people may be using, but it's a risk to change your criteria in the middle of the process AND you've posted it on BP which makes it public knowledge now. All that being said I'd go with applicant #1. Good luck!

If you establish a window of time in which you will be accepting applications, clearly communicate your process and your rental criteria from the start, it's perfectly acceptable to review a batch of applications at the same time, rank them according to your criteria and them process them one at a time until you find a suitable tenant. We don't go with first come, first serve because we would rather have tenants take the time necessary to thoughtfully and accurately complete the application. We don't want to show the property and have people rushing to complete the application while sitting on the front step. We also want those who are gainfully employed to have the opportunity to view the property at a time that's convenient for them. We have no problem choosing the most qualified based on our rental criteria, instead of the first qualified.

.

Updated 29 days ago

Strike that last sentence. I meant to say: We have no problem choosing the most qualified based on our rental criteria, instead of the first to apply who met our minimum criteria to rent.

@Marcia Maynard TY!! A published application time window is such a great idea but It never occurred to me. Next time the application window will be in my ad. I actually had a guy with Fullbright scholarship request info today.

I did decide to rent to Grandma. I called local company that 'evicted' her and they said NO! they didn't evict her. She had trouble paying when her daughter moved out and was unable to find someone else reliable to move in to help pay. When she didn't call they 3-day'd her and they guessed she thought that meant she was already evicted because she  got her stuff and left that day. The lady at the property management actually felt bad about it. She said they really just wanted her to call and work something out that she'd been a good tenant for almost 5 years. She now gets social security in addition to her grocery store job so her income is more stable now; she and her 'old man' actually make 4x rent in income.

@JD Martin Yup its in a low rent area but I have the nicest houses in the 'hood ;). I really like the young girl too, I'm hoping she'll be interested in one of my other properties in a different part of town.

@Ray Fisher A drive by is a good idea too. I'll combine that with the application window when I need a tie breaker.

@Jill F. Multiple applications is a good problem to have! I would want to better understand the situation around the “eviction” on tenant 1and have a detailed conversation with the past 2 landlords. All things equal if lean towards the grandma, probably more stable and there’s a better chance she won’t leave for a while.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here