Prospective tenants with low credit score

[Karan Ashar]

Hello, kind folks on BiggerPockets.

I have purchased my first rental property in Penn Hills, PA. We are almost done making the property rent ready. The Property Manager emailed me the following two potential tenants:

The first couple has a combined credit score around 578. Their criminal record only reveals a few speeding tickets. They have a lot of student debt but as they are still in school, they informed PM that they do not begin student loan payments for another 2 years. Combined they make about 4 times the market rent per month. They have 4 cats. They are willing to do a double deposit, and do not have a co-signer.

The second couple has a combined credit score of 511. One of the tenants was evicted back in November of 2019. PM asked her about it and she said that she had a roommate that moved out one day and she was left to handle the rent and utilities by herself. PM was able to call the company that rented her the apartment and spoke to a leasing manager. From talking with the leasing manager, her story checks out. Combined they make about 5 times the market rent per month. They have a small dog. They are willing to do a double deposit, and do not have a co-signer.

PM personally thinks this is an acceptable risk considering the double deposit and the lack of serious criminal records. They want my approval since the potential renters credit score is below 620 threshold. I am not sure what I should do in this case. Both couples make 4-5 times the rent amount per month but I am worried about the low credit score and one of the couples has 4 cats as well

Do you folks think I should pass on these tenants or consider anyone from the above two? Any potential follow up questions I should ask PM?

Thanks in advance

[Karl B.]

Depending on how hot/cold that market is I would likely pass. Though if I had to choose one I'd find out how long Couple #1 has lived at their previous rental (though it sounds like they might be recent grads). 

If they had been there for a while (or if they previously lived alone/with roommates and have a record of staying in a place for a while and this is their first co-habitation together) I might consider them. If you decide to rent to them and they have 4 cats, charge a monthly pet fee for each cat - four cats adds up (even at $10 per meower that's almost $500 a year).

I wouldn't consider Couple #2 - that eviction is too fresh.