Renting to young folks trying to get started in life

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Renting to young folks trying to get started in life

Dana Williams
Member since 2020 · 21 posts · 6 votes

Hello all,

We all have been there but when is it the right time to rent to young men and women trying to get started in life? I have a couple of 22 year olds looking at my property tomorrow afternoon but during the screening process, they did tell me they've never had their name on a rental property since they lived with their parents and not much of a credit history. Both have jobs, one makes over 3 times the rent and the other makes just under 3 times.

Would you all still put them through the application process and let that determine their approval or denial of renting?

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Steve K.
Specialist · PA · Member since 2016 · 143 posts · 71 votes
5y

If they make enough, most likely they will pay rent. Sure, put them thru the application process. Look at their debt and non paid debt and background, if any. You can tweak your credit qualification criteria based on how you feel, as long as your process is fair to other applicants as well. You can ask 2x or 3x upfront as security deposit, whatever is legal in your jurisdiction. 

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  • Steve K.
    Specialist · PA · Member since 2016 · 143 posts · 71 votes
    5y

    If they make enough, most likely they will pay rent. Sure, put them thru the application process. Look at their debt and non paid debt and background, if any. You can tweak your credit qualification criteria based on how you feel, as long as your process is fair to other applicants as well. You can ask 2x or 3x upfront as security deposit, whatever is legal in your jurisdiction. 

    5Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    5y

    @Dana Williams I have approved those a time or two with an appropriate co-signer.

    2Reply
  • Dana Williams
    OP
    Member since 2020 · 21 posts · 6 votes
    5y
    Originally posted by @Steve K.:

    If they make enough, most likely they will pay rent. Sure, put them thru the application process. Look at their debt and non paid debt and background, if any. You can tweak your credit qualification criteria based on how you feel, as long as your process is fair to other applicants as well. You can ask 2x or 3x upfront as security deposit, whatever is legal in your jurisdiction. 

    Great. Thanks for the reponse.

    0Reply
  • Jill F.
    Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
    5y
    I have 35 one bedrooms so I rent to many first time renters. I've had very few bad apples.
    1Reply
  • Adam Martin
    Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    I have been there before myself .  In college I wanted out of the dorms with one of my fraternity brothers for a year and my girlfriend the following.  It was an apartment just off campus that was overpriced but attracted students.  Both times our parents cosigned and there were no issues.  They are most likely going to expect to need one as well which I would be fine with.  If no-one is willing to take the risk that knows them I would not either as a stranger.  Their income seems solid so assuming their credit check is clean as well as the cosigner I'd go for it.

    1Reply
  • Dana Williams
    OP
    Member since 2020 · 21 posts · 6 votes
    5y
    Originally posted by @Bjorn Ahlblad:

    @Dana Williams I have approved those a time or two with an appropriate co-signer.

    Right. Did you give them an Adverse Action Notice as well for needing a co-signer? Thanks for the response.

    0Reply
  • Account Closed
    Rental Property Investor · NJ · Member since 2020 · 52 posts · 25 votes
    5y
    Originally posted by @Dana Williams:

    Hello all,

    We all have been there but when is it the right time to rent to young men and women trying to get started in life? I have a couple of 22 year olds looking at my property tomorrow afternoon but during the screening process, they did tell me they've never had their name on a rental property since they lived with their parents and not much of a credit history. Both have jobs, one makes over 3 times the rent and the other makes just under 3 times.

    Would you all still put them through the application process and let that determine their approval or denial of renting?

    It's been mentioned, but I would absolutely consider them if they get a co-signer. My dad co-signed my first rental when I first moved out because I had no rental history and very little credit history. I met all of the other criteria, including income, and I wanted to make sure my rental history started out right! 

    1Reply
  • Matt Ziegler
    Rental Property Investor · Colorado Springs, CO · Member since 2020 · 433 posts · 284 votes
    5y

    If their DTI is in line with your criteria, why not start them on a month to month lease, and give them a chance to build up good rental payment history? We have done this with several young couples. Worked out well for both parties.

    1Reply
  • Aigo Pyles
    Flipper/Rehabber · Memphis, TN · Member since 2020 · 758 posts · 285 votes
    5y

    You still need them to go through application process.

    0Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    5y
    Originally posted by @Dana Williams:
    Originally posted by @Bjorn Ahlblad:

    @Dana Williams I have approved those a time or two with an appropriate co-signer.

    Right. Did you give them an Adverse Action Notice as well for needing a co-signer? Thanks for the response.

    I did not do an AAN. All my tenants are MTM and I got my usual first, last, and security deposit equal to one month's rent.

    1Reply
  • Justin Thorpe
    Member since 2020 · 437 posts · 675 votes
    5y

    @Dana Williams

    I have done this for 15 years with Zero problems. Most of my tenants are young techies who work for Google, Facebook etc. Never had a single issue. Do an employment and background verification.

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    My recommendation is to use an objective score sheet for all applicants. I score individuals on 10 different factors such as credit score, number of collections or judgments, landlord references, length of current employment, rent to income ratio, etc. They're overall score determines their level of risk. The higher the risk, the greater the deposit required.

    If I were in your situation, I would likely offer to rent to them but charge a security deposit equal to two months rent.

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    3Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    5y

    Verify their income and background and run their credit, any history of them making payments on time is important to see on your end. You always have the option to ask them if their parents can co-sign. That option usually works in this scenario. 

    0Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    Everyone has to start somewhere.  Call their employer as a reference (get a contact name and call the number listed in the phone book/online directly) as they are going to know them best.  Do inspections after a month or two and then again at 6 months if it is okay.

    1Reply
  • Dana Williams
    OP
    Member since 2020 · 21 posts · 6 votes
    5y

    I scheduled 3 folks this afternoon and none of them showed up but thanks for all of the responses regardless.

    0Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    @Dana Williams heck yea. No bad habits.

    0Reply
  • Steve K.
    Specialist · PA · Member since 2016 · 143 posts · 71 votes
    5y

    @Nathan G. Nice. We need to make one as well.

    0Reply
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