SFR Investor · South Bend, IN · Member since 2013 · 342 posts · 56 votes
I have a tenant wanting to move-in, but wants to give a 30-day notice to his current LL. While I realize this is a good thing, the property is vacant and this candidate is borderline (though is the best so far), as it's a lower end neighborhood. He said he could put down his deposit to "hold" the place, but I'm wondering if I should decline him and try to find someone else, since it would be vacant for the next month waiting on him anyway, or if a 30-day wait period is average for tenants. Like if I found someone else in 2 weeks, I'd then have to wait another 30 days for the next couple to move in.
The other rental I have is in a college town, so the move-in times are pretty predictable throughout the year and I normally have a tenant well in advance of the other one leaving.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
13y
In your shoes, I would tell the tenant that I am willing to give, say, a weeks free rent. So, we he can move in and start paying rent on Feb 8. Any time someone wants the place and I approve them, they have to give me a non-refundable hold deposit right away. If they sign a lease as planned, that becomes their security deposit. If not, I keep it and go back to marketing the unit.
If the tenant was unwilling to move in on Feb 8, I'd tell him he has the right of first refusal. I will keep marketing, and if I get a candidate who's willing to move in and pay the rent sooner, he has first shot. If he's willing to sign a lease and start paying rent the same date as the other candidate, I'd take him. Otherwise it goes to the new candidate. Unless your market is very slow, I wouldn't give up a months rent. Any more than this candidate wants to pay double rent.
Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
13y
I, personally, don't let tenants wait more than a week or so unless they are AMAZING tenants that I think will be worth it. If the tenant is that interested - make them pay anyway for the month. If they can't afford it - I wouldn't want them :) Is that mean?
Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
13y
It depends somewhat on how strong the rental market is in your area. If you don't wait for this applicant, how long do you think it would take you to find another?
In my area, the rental market is strong and I rent my places in a couple days (with multiple applicants to choose from). So there's no way I'd wait a whole month to start collecting rent, especially from a "borderline" applicant.
But like I said, it can depend on your specific market. If you do hold it, I would definitely take some sort of non-refundable holding deposit like Jon mentioned to compensate you for the time the property is off the market in the event the applicant later backs out.
SFR Investor · South Bend, IN · Member since 2013 · 342 posts · 56 votes
13y
I have been getting maybe 3-4 showings a week, and it's been on the market for about 2 1/2 weeks so far. The area is a lower income area, not in a "hot area of town - if it were I'd not consider it. I've had 3 couples apply, two I've denied.
I like the idea of first right of refusal, however, they've agreed to pay first/last month's rent, 1 mos security deposit plus a refundable $250 pet deposit. So if I add in the place may go to someone else when they are about to give notice at their current place, I'm not sure they would be agreeable to that.
Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
13y
Give them first right of refusal and only accept a refundable deposit? Collect first and last month's rent prior to giving keys?
I don't know. It seems like when a low end tenant makes your head hurt, they are not worth the trouble. I can see how one might get in the situation to make this request and it not be a bad thing, though.
If you hold it for them, you will have had an empty house for 6, nearly 7 weeks, with no rent for a "borderline" candidate. Not a good candidate, but borderline?
People move. People know they have to give 30 days notice. Let the tenants deal with it. They should've given notice earlier. Most people decide to move, give notice, then immediately start looking for another apartment.
I like the idea of giving them a free week of rent and having them move in sooner and start paying.
Or, do what Jon H. said and do right of first refusal and see who else comes along before this person wants to move in.
It is slow season, but 7 weeks of lost rent for a single family home seems like a lot. Maybe it's not. But, all that for a borderline candidate? Surely a at least "decent" candidate will come along. 2.5 weeks listed doesn't seem like all that long to me. I listed my rooms for rent longer than that this time. Someone came along at the last minute.
SFR Investor · South Bend, IN · Member since 2013 · 342 posts · 56 votes
13y
I'm going to call my listing agent about the first right of refusal. Three different couples viewed the house last night, and from the automated follow up survey, two said they were interested. So, maybe something will pan out. But if not, this plan sounds reasonable to me.
SFR Investor · South Bend, IN · Member since 2013 · 342 posts · 56 votes
13y
Jon Holdman, in this scenario - first right of refusal - do you have them put the security deposit down to hold the house and have them sign the lease, or just do the security deposit until the time comes that they may move in?
Landlord · San Diego, CA · Member since 2012 · 129 posts · 49 votes
13y
Good tenants are hard to find. If I have a qualified tenant who needs to a few weeks, I'll have them sign the lease and pay first month plus security deposit up front. Yes, I may lose some rent but the alternative is that I'm faced with the prospect doing more marketing and more showings plus waiting another week - and then having a tenant who needs a week or so to move in. So really I haven't lost that much by going with the tenant who needs to wait.
SFR Investor · South Bend, IN · Member since 2013 · 342 posts · 56 votes
13y
Ok, I spoke with my leasing agent and he said he doesn't really do that because it kind of puts the renters in between a rock and a hard place because they've given their current LL a 30 day's notice, and put down their deposit on my place, and then we come back to them and say we found another renter so you have to move now. He said it can start things off on the wrong foot as well.
He also said that 9 times out of 10 people want to move in toward the end of the month or the 1st of the month, since that's when their current leases end. Since we're already in that window, we may end up waiting until March 1st for another renter to move in as it stands.
These tenants don't appear to be bad tenants, they are married, have good credit history (everything in green, what???), good credit scores for this market (635/665), good rental references, no evictions, and earn 3x the rent. However, they are highly leveraged with a low amount of liquid funds, which is the main thing that brings them down to borderline.
He is following up with the other agents who showed the place last night to see if their people they claimed were interested want to put in an app, as we need to give an answer to another party. So, we'll see what happens. If there isn't other interest, I'll go with the younger couple.
SFR Investor · South Bend, IN · Member since 2013 · 342 posts · 56 votes
13y
Ok this is what my leasing agent said about the showings of the interested parties who viewed last night (he didn't show the house himself, other agents did):
The first agent said her people have not been offered a chance to renew their lease due to the number of people staying in the apartment. Was a woman who had the lease, got married and had a baby. The current landlord served them notice to vacate by end of February. Credit is around 650s or so per the agent.
Other agent, said the potential tenant has the application in hand but she has not received it back from them. I will get some questions answered about their background ASAP so we can make a decision with the current applicants.
So, this is still ongoing... I will post an update.
The first group sounds like there might be something weird going on. "Number of people staying in the apartment" because a woman got married and had a baby, and all of a sudden they have to vacate by the end of Friday? The LL just suddenly noticed that someone got married and had a baby, and who kicks someone out due to that anyway? Sounds weird to me, but maybe there's a better explanation... the 30 day's waiting time for the applicant I already have is not that great, but on the other hand, as I've said before, from my experience the people that want to move in NOW tend to have something weird going on.
SFR Investor · South Bend, IN · Member since 2013 · 342 posts · 56 votes
13y
Misread it... end of February. That's better, but my leasing agent just replied and said it might have to do with his name not being on the lease. Still, I think if they were good tenants they would just re-draw the lease and add his name (?)
I don't mean to be so skeptical but, when renters tell me things... I just am.