Should I approve a non-ideal tenant if home has been vacant for 6 months?

Question

Would you approve a tenant who recently had multiple 60–120 day lates, a charge‑off, and a joint delinquency, but is now current on all debts and shows proof of recent mortgage payments — even though their previous home in Denver is ‘rented’ to family with no lease and no formal rental agreement (he just moved with his family to Texas where my new construction property is)? Or is this still too risky without a guarantor or real lease in place? He does not have a guarantor and is willing to pay 2x security deposit + 1st month rent. Keep looking for a better tenant or pull the trigger ?

Richard F. · Answer

As they say, not only NO! But, Heck No! Even with some so-called "guarantee". That guarantee has zero effect on all of their other Bad Habits. Which, apparently, they continue by not properly documenting an alleged rental agreement.

Develop a proper screening SYSTEM, and then Stick To The System...otherwise you have NO system!

Post a link to your ad so we can evaluate your marketing and property. Either or both of these may be part of the problem.

Eric DeNardo · Answer

Hey David, I’d prefer a lower rent than accepting that tenant. It could cost you much more than lowering the rent and getting a better tenant.

Drew Sygit · Answer

Which do you think they'll prioritize, their mortgage or rent payment?

WHy has your property been on the market for 6 months?

How many price reductions?

Caleb Brown · Answer

Seems sketchy. Don't ever be desperate and settle below your guidelines. If the property is vacant for 6 months you need to understand why, filling in a sub par tenant won't fix that.

Keondre Cohen · Answer

With a six-month vacancy, I’d separate the tenant decision from the pressure to fill the unit: verify income, rental history, and the reason for the vacancy, then compare the risk of a bad fit against another few weeks of carrying costs. A local property manager can help standardize screening and reduce the chance that one rushed approval creates a larger loss.

Omar Hernandez · Answer

Hey David,

A 6-month vacancy is definitely a telltale sign that the property is overpriced.

I'm actually going through a very similar situation right now with a new construction duplex I finished last month. I've had some interest, but nothing serious yet, so I am lowering the price bit by bit every week until I hit my floor rate and start getting actual bites.

Whatever you do, do not lower your tenant screening standards. I made that exact mistake on a different property in the past by compromising on my criteria and making a special agreement with a tenant. It turned out to be the biggest mistake I could have made—it cost me about 6 months of lost rent and a long, drawn-out eviction process.

Stick to your screening standards and adjust the price down incrementally instead until you find the sweet spot. You might also want to try pulling the listing down and re-listing it online so it shows up as a fresh, new property to prospective tenants. Don't compromise on your standards!

Alyssa Marquez · Answer

I’d be cautious. The recent mortgage payments are a positive, but multiple 60–120 day lates plus a charge-off and joint delinquency are meaningful red flags.

The bigger issue for me would be verifiable income, rental history, and current ability to pay, rather than the lack of a lease on the Denver property. Paying 2× deposit can reduce your exposure somewhat, but it doesn't eliminate the risk of missed rent.

If it were me, I’d only approve if the applicant meets your written screening criteria consistently and I could independently verify income, employment, assets, and current housing obligations. If they don't meet the criteria, I'd keep looking rather than make an exception because they can provide a larger deposit.

Also, be careful about making an exception for this particular applicant—apply the same documented criteria to every applicant to avoid fair-housing issues.

Garrett Crosby · Answer

Six months of vacancy is telling you something important, and I'd address that first before deciding on this tenant.

You mentioned three very similar properties in the same neighborhood — two rented quickly, this one hasn't. That's a pricing and/or marketing issue, not a "settle for this tenant" situation. Drop the price until you're getting qualified applicants at volume, then you can be selective. Accepting a risky tenant because you're desperate is one of the most expensive decisions a landlord can make — evictions are costly, especially in Texas where the process can drag out.

On this specific applicant: the 2x deposit and being current now are positives, but the pattern of extended lates and a charge-off tells you how they behave when money gets tight. Without a guarantor, you're fully exposed if that pattern repeats. I'd pass and lower the rent to get a better applicant pool instead.

Asad Halai · Answer

I am in a similar situation. My apatment with new appliances and freshly painted has been on the market since January 16th. After a few price drops we got an application which is very iffy. Ulimately this morning I decided not to go with it, and keep it vacant until I find the right person. I might even drop the rate a bit more to attract someone who is solid. I have been doing this for far too long to make the same mistakes twice. (Location of the said apartment is at Triinity Bellwoods, Toronto, CA). More of my ramblings are on thepropertyjunkie.com if you are interested.

David Krulac · Answer

@David Gorena  Great name!  Markets change all the time, so what happened 6 months ago isn't necessarily relavent to today.  Interest rates change, gas prices change, job market changes, good neighborhoods can lose their luster and appeal.

An old real estate pro told me that if a property is properly advertised and does not rent or sell, the price is too high.  I looked at a property listed for sale yesterday, that is in a decent neighborhood, has brand new kitchen, new roof, new central air, all new flooring, and all new paint, ready to move in today. The first problem that I saw was that the price is 15% to 20% too high.  In that market and in that price range this property should have a bunch of showings and multiple offers.

Should I approve a non-ideal tenant if home has been vacant for 6 months?

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