Investor · Midwest · Member since 2019 · 339 posts · 226 votes
Field Report Monday
Four years ago I bought an 80-unit complex that was, to put it kindly, a mess.
There were no real rules. At the end of In my first 90 days I filed an open records request for every police run to the property. I'll just say the stack was thick.
Within a week of taking over, I met a tenant I nicknamed "the Mayor." He knew everybody, and everybody knew him. At the time he was a good resource. Looking back, it should have been a red flag.
Here's what I learned. A lot of the tenants I inherited were "helping out" other tenants and random people by letting them stay. The property had an entire population of floaters: people who weren't on any lease, who bounced from unit to unit until each host got tired of them, then they moved to the next couch.
One of those floaters stayed with the Mayor.
Fast forward to two weeks ago. My property manager messaged me about an applicant who said he knew me. His application looked good. My answer was the same one I give for every applicant: if he qualifies under our standards, approve him.
Then I saw who it was.
It was the floater from the Mayor's unit. My stomach dropped, and I immediately messaged my property manager.
I had to stop and think it through. It's been four years, and people change. He went through the same screening as everyone else, and he passed. Our criteria exist so decisions don't come down to my memories or my gut, and that's exactly the situation I was in.
There's one more thing I can't ignore. Four years ago, nobody wanted to live at this property on purpose. Now someone who saw it at its worst wants to come back and sign a lease. I count that as a sign the turnaround worked.
So here's my question for you: He qualifies on paper. You remember who he was. What would you do?
2 votes total
Approve him. He met the criteria, and that's the end of it.
Approve him, but watch closely for guest and occupancy violations.
Review the criteria first, since the screening might have missed something.
Investor · Collierville, TN 38017 · Member since 2017 · 692 posts · 507 votes
6d
He qualifies on paper but you remember who he was. Trust your memory.
With 236 doors, I've learned that past behavior is the best screening tool there is. If he was a floater causing problems at your worst property four years ago, he'll bring those problems to this one. People can change, but your gut is telling you something for a reason.
Screen everyone the same: background, eviction history, income verification. But when your gut says no and the paper says yes, listen to your gut. You've turned that property around. Don't let nostalgia for "how far it's come" talk you into rolling the dice on someone you already know is a risk.
One bad tenant costs more than a month of vacancy. Deny him and keep the unit clean.
Investor · Collierville, TN 38017 · Member since 2017 · 692 posts · 507 votes
6d
He qualifies on paper but you remember who he was. Trust your memory.
With 236 doors, I've learned that past behavior is the best screening tool there is. If he was a floater causing problems at your worst property four years ago, he'll bring those problems to this one. People can change, but your gut is telling you something for a reason.
Screen everyone the same: background, eviction history, income verification. But when your gut says no and the paper says yes, listen to your gut. You've turned that property around. Don't let nostalgia for "how far it's come" talk you into rolling the dice on someone you already know is a risk.
One bad tenant costs more than a month of vacancy. Deny him and keep the unit clean.
Investor · Midwest · Member since 2019 · 339 posts · 226 votes
4d
@Drew Sygit for me it's more of the mindset. He wasn't employed at the time to my knowledge. He just lived with different tenants for days at a time until they got tired of him, then he'd move on to the next tenant's place within the complex. Eventually he ended up at the Mayor's place for a couple weeks then one day he was gone.
I self manage my units, so my PM is my assistant. Our screening process is pretty good, I have no doubt he qualified - 3x rent, no evictions w/in last year, etc.
I'm good with 2nd chances, just don't want that old mentality creeping back into the complex. We've denied several former tenants who wanted to come back just to ensure old habits don't return.
My gut plays an important part in my decisions. While I appreciate they may have turned their life around if I was even considering this I would comb through that application with a fine tooth comb before approving it.
I'd vote 'approve, but enforce the lease,' and treat the gut feeling as a sign your written criteria need an update rather than a reason to deny.
If he meets your written criteria and you deny him based on memory, you've created inconsistent screening, and that's where fair housing complaints come from. Also, technically the lease violation was the tenant's who let him stay, not his.
What I'd do:
- Approve him on the same terms as anyone else.
- Make sure the lease has a clear guest and occupancy clause, e.g. guests staying more than 14 nights in a 6-month period must apply and be added, and enforce it from day one.
- Going forward, add a criterion like 'documented lease violations or unauthorized occupancy at a property we manage within the last X years,' applied to every applicant.
That way the next time this comes up, the decision is in the criteria, not your gut.
