NEED HELP! Should I rent to this person or not?

11 Replies

Hi BP members, 

I am turning to everyone here for help in helping me decide if I should rent to a potential tenant or not. My condo is in a B neighborhood but due to the slow demand, I have not had a good pool of candidates here in Palatine. 

One person I got has been living in his own townhouse for the last 14 years. He bought and then went underwater on his mortgage so he has decided to foreclose on it. Due to the foreclosure, his credit is close to 600. I performed a credit/background check and had a misdemeanor charge of retail theft that he claims that he was not charged for and that it was a misunderstanding. 

He works full-time, and makes about 2.5X the rent amount. He is close to 60 years of age and is just looking for a fresh start. I had a long conversation with him and he has openly told me everything up front. 

If i require 2 months of security deposit than the ordinary one month deposit, is it a good idea to give a one year lease or due to the facts that i mentioned above, am I taking too much of a risk? 

Note: he did foreclose on his house and also stopped paying his cc payments. He is starting to improve his credit now and has 2 credit cards that he is paying off every month. 

Siraj,

I typically have pretty tight credit standards for my A and even B properties, but I usually make exceptions for those with similar housing issues you mentioned above.  The reason is that, assuming that is their only credit issue, they probably won't be moving or buying a house for a while.  I've had some good success getting these people to stay for years.  It's a risk, though, obviously and the CC payment issue would concern me.  2 months security deposit and last months rent would definitely be warranted.  

That would not meet my criteria. I would say pass. My feeling is that it's better to wait on a well qualified tenant.

If you were to give this a try you might consider a month to month lease. If it doesn't work out it should be easier to get him out.

Just curious how long has the condo been vacant?

Originally posted by @Scott England :

Siraj,

I typically have pretty tight credit standards for my A and even B properties, but I usually make exceptions for those with similar housing issues you mentioned above.  The reason is that, assuming that is their only credit issue, they probably won't be moving or buying a house for a while.  I've had some good success getting these people to stay for years.  It's a risk, though, obviously and the CC payment issue would concern me.  2 months security deposit and last months rent would definitely be warranted.  

Besides the 2 months sec deposit and last month rent, what would you require to compensate for the risk for missed CC payments?

@Jeffery Griggs i have been advertising it for 3 weeks now. I have gotten lots of hits and even people who have paid for credit/background checks but have ended up finding other apartments/condos in the meantime. 

I have gotten hits from zillow, Trulia, hotpads, CL, etc.

I am familiar with the area and I'm wondering  are you asking too high or too low for rent that people are passing you up so fast? ...Other than this gentleman . Have you thought about using a realtor ? Sometimes the expense is worth getting the better tenant right away? 

I would base my decision on how recent his criminal arrest is to now. And if he has all these credit issues , how is able to come to the table with the money to cover two months rent plus security ? That raises a red flag , unless he has a relative or won the lottery , I'd pass and hire a realtor to assist me. 

I vote no.  Having credit problems is something that most otherwise reliable people may face for a variety of reasons.  But retail theft?  I don't see how that's a miscommunication.  Would that ever appear on your record?  Is there even a chance it would?  See what I'm saying?  Law-abiding people pretty much live with a 0% probability of that ending up on their record.  The fall is coming, so I see the motivation to get a tenant, but it could take many months to evict, and all the appliances might be gone.  

@Siraj Ahmed everybody has a story and your sounding desperate. This guy but off more than he could chew, stopped paying credit cards, and you think he is going to pay you on time all the time? Even if you did get 2 month sec dep - which I like by the way, that probably would be enough to cover you turnover when/If he defaults. Probably best to wait for a more qualified applicant. 

Lastly, I'm from Roselle and an agent and if your saying other people are renting other places and not yours, you should be looking at the quality and condition of your unit, and, most of all, price.

Good luck

I also have a house in a hard to rent area. 

I would rent to him, and if he screws up (should say "when" he screws up) you have 2 

months security. that is enough time to get him out without losing much.  

at least you may get a few months or a year or 2 rental income.