Rental Property Investor · Member since 2019 · 199 posts · 42 votes
Greetings, I just put up one of my units on the market for rent. Many people are highly interested.  I have a few families that are practically begging (for lack of better terms) to be the one selected. Their application just isn’t strong enough. I don’t feel confident in their income. But I also understand that they need a place to stay. I want to rent this out to a family but I also want to make sure the family is able to afford the apartment. Do I take a chance with someone whose income isn’t that high or is this not the time to have a heart and just keep the business mindset?
Columbia, SC · Member since 2014 · 133 posts · 190 votes
6y
As much as you feel for them - you'd feel even worse if you had to evict them. Take the strongest applicant and don't worry about it. If their income is tight you might do them a favor and make them realize they need something slightly less expensive.
Columbia, SC · Member since 2014 · 133 posts · 190 votes
6y
As much as you feel for them - you'd feel even worse if you had to evict them. Take the strongest applicant and don't worry about it. If their income is tight you might do them a favor and make them realize they need something slightly less expensive.
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
6y
You are not in the business long if you let emotions influence your decision making.
Let me put it another way, using your own example. What happens to these tenants, that are more than likely not going to pay on time, if you lose the house because the mortgage payment wasn't on time due to the source of that payment (the rent) not being on time?
Greetings, I just put up one of my units on the market for rent. Many people are highly interested.  I have a few families that are practically begging (for lack of better terms) to be the one selected. Their application just isn’t strong enough. I don’t feel confident in their income. But I also understand that they need a place to stay. I want to rent this out to a family but I also want to make sure the family is able to afford the apartment. Do I take a chance with someone whose income isn’t that high or is this not the time to have a heart and just keep the business mindset?
Imagine that you are handing this over to a professional management company, how would they handle it.
If you want to be a generous owner doing favors here and there then do it. But if you want to run like a business and scale, you need to take the safe and secure tenant.
Investor · Tampa, FL · Member since 2017 · 589 posts · 251 votes
6y
This is a very tough situation but you can't allow this to get the best of you. Not having the income requirements mean they can't afford the property. You don't want to have to evict and leave yourself without a paying tenant and they will have an eviction on their record.
Realtor · Los Angeles, CA · Member since 2017 · 99 posts · 97 votes
6y
As much as most of us (I hope I speak for most of us, that is) want to be the good guy, it's a scary time to put yourself in a questionable situation right now. Sticking with better references, track record, work status, and high credit scores will help you sleep better at night.
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
6y
If you want to be generous and have the means, donate to what you think is a good charity. There are many good charities.
You are doing no one a favor if you rent a place that the tenant cannot afford. You do not need to pick the highest income, or highest credit score. However, the method you use to choose the tenant should not have any perception of being biased, especially against a protected group.
For this reason, we process the completed applications in the order received. If one meets our qualifications (which are not as clear as they could be to have best protection against any accusation of bias due to there being so many variables), we rent it to them. We clearly are not biased against Hispanic; A majority of our tenants are Hispanic.
We return application fees where we did not process the application. However, if we started processing the application and the tenant withdraws it, we keep the application fee. It takes time to process applications (confirm employment, current living situation, etc.) and money (credit and background check).
In your case, the application not being strong enough means that they did not meet your qualifications. Time to go to the next application.
By the way, if you have minimum qualifications, such as income 3 times the rent or minimum credit score, placing the minimum qualifications in the listing can save the perspective unqualified tenants' time as well as your time.
New to Real Estate · Los Angeles · Member since 2020 · 5 posts · 3 votes
6y
I believe it is great that you have a heart @Simon Obas however business is business. Don't bring your personal feelings into this as one way or another the tenants you deny will find a place to stay hopefully more closer to their income bracket. As mentioned above it would feel worst losing your property or having to evict them because of unpaid dues. Your doing them a favor and yourself not to mention.
Property Manager · Raleigh, NC · Member since 2014 · 728 posts · 596 votes
6y
@Simon Obas
I assume you have a minimum income. If they make more than your minimum, rent to them, if jot, move on. Id you do not have q minimum rent requirement, get one.
Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
6y
It is unfortunate but this happens a lot where you really like someone but it just doesn't work out on paper. I also find that usually the people that are giving me all the answers I want to hear and are the most persistent are that way because they don't qualify and have been rejected before so they are looking to see if they can instead appeal to your emotions. Of all times this is certainly not the time to deviate on your process, especially since you are getting a lot of interest. You selected your standards for a reason now stick with them. If you absolutely need to feel like you are the good guy look at it this way, they may have issues affording rent and by you selecting them you are setting them up for financial failure in the even they run into a hardship which could jeopardize their housing. If you have a family you also have a duty to them to provide income from your work and investments, do you really want to take money from them to float an investment that you had doubts with in the beginning.
Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
6y
I will give a different type of answer that hopefully will help you resolve your conflict.
Do you have a set rental criteria? Is it written down?
Ok, once you have your criteria pick the first applicant that meets your stated criteria. This way there is no emotion, and no way anyone could say they were discriminated against, and best of all - it is very helpful when emotions want to pull us one way or another - I find it very freeing to just accept the first qualified applications. No picking, no feeling bad etc Hope this helps you!
OK, here's my take on this. What's the best case scenario with your sub-qualified tenant? They rent the place and they pay your rent regularly through the leasing term. What happens then? Are you leaving these people in a better financial position than what you found them in? No. Meeting your rent with their income places an unduly high cost-of-living burden on them.
The main reason middle-class people stay broke is that they buy a house with too much mortgage -- they put themselves in the position of being house poor. That's exactly what your kind gesture to these working class does to them: it traps them where they are financially. AND THIS IS THE BEST CASE.
This has happened to me, and I was too stupid to understand what was happening. I thought I was doing these people a favor. Instead, I was leeching away their best and in this case only tool to get out of low C'class rental poverty, their income. My high rent was stopping them from scraping some money together for a down payment on their own house someday.
This is why I never compromise in my income requirements in C'class, ever. Section 8, SSDI, that's a different story. But if you want to give these working-class people a hand, sit them down and explain exactly why you're not renting to them and what renting to them would mean. Encourage them to look for a significantly cheaper living situation.
Savannah, GA · Member since 2019 · 53 posts · 22 votes
6y
@Simon Obas in my opinion I would stick to your application process, because there will be a lot of people who are overly interested in getting their application accepted for various sentimental reasons. Always falling for a story may end up hurting your business in the long run. If you want to help, you can always network with other landlords and refer applicants out to them whenever you have to deny their application. PS. That is really good that you have a lot of applications to choose from!
New to Real Estate · Cincinnati / Northern Kentucky Area · Member since 2020 · 7 posts · 4 votes
6y
@Simon Obas I did this years ago and it turned out bad but I also didn’t get a credit report or check them out thoroughly. It was all my fault for not doing do diligence. Do they have good credit? Is their employment stable? Did you call previous landlord? Check references and then if it all looks good set expectations on rent due on time and stick with it. May ask for another month security deposit if it is allowed in your area.
Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
6y
@Simon Obas Emotions should not be involved in business. If you aren't able to make an emotionless decision, then hire someone who can do it for you. Set parameters and stick to them.
Find opportunities outside of your business to donate your time and money to those in need.
Rental Property Investor · Philadelphia, PA · Member since 2015 · 476 posts · 360 votes
6y
@Simon Obas unfortunately if you think they can not afford it, it is likely true and now you have a national moratorium on evictions meaning now more than ever you need tenants with solid finances. Ive learned that many people are not aware of what they can afford strange as that may sound. Options are to get more up front or a guarantor. But best is a good tenant!
Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
6y
I have always said that the screening process, and showing the units, is the hardest part of being a landlord (at least for me).
1. Im an introvert at heart, I don't like meeting new people (but I do it). Unfortunately youll have to meet a lot of strangers.
2. Implementing your criteria without letting personalities get in the way is hard (but this is CRUCIAL)
3. You will have to let go of your emotions as @Joe Villeneuve mentioned. If you don't, then you will be sorry later.
4. It can be tempting to just get it rented out ASAP, but be patient.
Keep in mind that one or two months vacant, or without rent, is going to kill your cashflow. That's why this process is so important in choosing the right tenant.
Investor · Los Angeles, CA · Member since 2017 · 523 posts · 476 votes
6y
Simon, I've had the same issue in the past. Go with your business instincts. It's noble to want to help, but there are so many ways outside of your rentals, to serve the community, through your time and money. I know many landlords who do so through non profits, religious institutions, and so on. On this one, go with the best applicant.