Hello everyone! I am a Long time lurker and have read many of the BP books and followed discussions on here which helped push me to buy my first duplex. It has been quite the project for me as I’ve had to do way more work than I imagined to get one side ready for a new tenant. The other side already has a great paying tenant of 9+ years.
The current tenant in the other side has referred a potential tenant for the side I have renovated. This potential tenant(single) is retired and says they would love to rent the place for my asking price when the place is ready in a few weeks; I haven’t advertised it yet as I don’t know the exact move in ready date yet. However this person is on social security that only provides 1.5x the rent amount. This person sounds like a great tenant otherwise and I am giving them an application and going to run a background and credit check which the person says will be all good. The general advice here is to only rent to them if they have 3x the rent as income. The person says they can afford it but according to their income obviously they wouldn’t be able to. If they provided bank statements with money in the bank, co-signers, or is there anything else that would make you comfortable renting to them?
I told them the requirements and said there may be a possibility if they pay a security deposit along with first and last months rent up front which they agreed to.
I don’t want to rent to the first “nice person” I find without doing my due diligence to protect my investment. Thanks in advance for your input! Also I wrote this from my phone so I apologize for typos and incorrect structure!
@Taylor Tapp I am assuming there is no other regular income like a pension. are there other assets? Money in the bank? a 401k? a pending house sale? I find with some older people they do not know how to put down information that doesn't fit the form. I will accept people with cash/investment assets that will cover them for 1-2 years depending on the regular income stream. You need to get documentation of this.
I would talk to their current landlord and find out how long they've been there, what their rent was and if they've had problems paying rent.