Which Tenant to Choose, if any?
I just got into real estate and this is my first post.
Purchased a condo to rent out, closed in May of this year. Since closing date, we've had the condo listed through a realtor (who as a side-note isn't very responsive or provides much value but we are locked in via contract for a few months). So far, no success. All applicants have a very poor credit score or history, primarily due to delinquency. Currently 3 options are available, and we're getting worried that summer is half way over and not many people are interested despite having reduced the asking rent by $100 since it was initially posted. Here are the 3 options, please provide input on your thoughts:
1. Person A, family of 4. Currently lives with a family member at their home. Person A is the only income earner and earns around $40k per year through a driving app (I'm trying to stay vague here) which is less than 1x annual rent. He claims to also have 2-3k a month side income from an source that is not on paper, nor do we have evidence. Credit score is low 600s, and about 7 years ago it appears all of his credit was maxed out and charged off due to delinquency (but no bankruptcy record) . Based on credit report, no credit to his name now. His cousin is cosigning, who lives in another state and owns several small businesses earns close to 80k on paper, family of 6, only income earner and close to 800 credit score. My thoughts are this is bad for several reasons. Person A has no verifyable ability to pay rent. His cousin is in another state so that would make collecting rent much more difficult. Plus that 80k is about 4.5x rent but based on the area (Northeast), that is barely enough to survive his own family off of.
2. Person B, in the legal industry earning 6 figures. Under 550 credit score due to delinquencies. Person B states it is because they tried to start a business after school and weren't responsible on payments at the time. Credit reports shows collections and delinquencies as of 2-3 years ago, and over 300k of student loan debt. Person B listed out current landlord on paper which after doing some research, I'm fairly confident it is a family member with the same last name that she changed on the application.
3. Waiting game continued. Opportunity cost of lost rent.
Please let me know your guys' input. I'm definitely inclined to #3 as I got into this venture as a safety net and somewhat stability (otherwise I would just do REITs), but pulling in potentially bad tenants would be contradicting. I'm also slightly trying to convince myself these tenants might work out of desperation of not very many leads in 6 weeks and not being able to switch realtors. The condo is in an area I would consider Class B and a hot area for those working in the city as it is close to all major highways and transportation.
Thanks