Help with decision, on whether these are the right tenants

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Help with decision, on whether these are the right tenants

Minneapolis, MN · Member since 2014 · 12 posts · 0 votes

My rental has been out on the market for 2 weeks. Have got a lot of inquiries but only one showing. Two undergrads, in their senior year, graduating in May 2014. Both have job offers with very reputed consulting firms. Their combined monthly gross income will be almost 6x the monthly rent.

Here is the "but": both are international students, with very little credit report and tenant history. They have been in the US for 4 years, and have lived in the dorm for that time.

I have run SmartMove reports both. Clean, but very little information, as they haven't really built up credit. Clean criminal records. I have verified that they are current students in the college. Verified that their job offers and salaries are legit. And the best (or maybe the worst) part is that my gut instinct tells me they are good kids. Both are in their early 20s, and both seemed genuinely frustrated that a lot of landlords are very skeptical about them and denying them rentals. Which, as far as I know, is illegal. That is denying rental based on nationality.

My heart, and most of my brain, tells me that they will turn out fine. But there is a tiny part of the brain that still needs convincing.

What do people think?

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Investor · Raleigh, NC · Member since 2013 · 1k+ posts · 708 votes

@Kris Elco I think you have a very high chance that this will turn out well. You have to remember that in the vast majority of cases, only the top students of a foreign country ever get the opportunity to come the US for studies. These kids tend to be smart, highly motivated, and focused on their studies and jobs. In addition, getting a job offer in the US is in itself a major achievement for a foreign student, because it puts a significant burden on the employer to help with obtaining a work visa. Their employers would not have bothered unless they thought these kids are exceptional.

I deal with a lot of foreign students in my day job, and while I'm not claiming that there aren't ANY bad apples among them, on the whole, I think it would hard to find a better pool of potential tenants (assuming their stories check out as they seem in your case).

See this reply in the discussion

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Jean BolgerPro Member
Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
12y
Given their story it makes perfect sense that they have little credit history. If their upcoming employment looks legit I don't see any problem. But be sure to do quarterly inspections- kids straight out of the dorm don't always have the basic life skills (cleaning, etc...) that you would assume they'd have....
1 Reply
Josh Dotzler
Austin, TX · Member since 2013 · 67 posts · 29 votes
12y
Kris, it seems they meet your requirements of income, credit, and I'm assuming a criminal background check. It also seems they have verified jobs. If you are still feeling a little uneasy, maybe request reference letters from the Resident Assistants at the dormitories (basically the upper-level student "landlords/superintendents" of the dormitories). If they did not create problems at the dormitories then it should be easy to get a few reference letters. Other than that, it seems like they would be perfect candidates. Good luck!
1 Reply
Phillip Syrios
Investor · Kansas City, MO · Member since 2013 · 118 posts · 59 votes
12y
It seems the only thing you are missing from them is rental history but everything else checks out really well. If a reference from the dorm they lived at works for your company then that would be what you should look to get.

I would normally ask for a co-signer in this situation but that doesn't seem very necessary as they make plenty of money and a co-signer seems unlikely at the same time. The other thing I do in a situation like this is ask for last months rent up front, with no rental history I think its a legitimate thing to ask for, just make sure its a policy for all your rentals when someone is without rental history.
2 Reply
Kris Belco
OP
Minneapolis, MN · Member since 2014 · 12 posts · 0 votes
12y
@Jean Bolger - Yes, I'm putting in quarterly inspections in the rental lease agreement.

@Josh Dotzler and @Phillip Syrios - I did talk to the dorm superintendent. One of the tenants had actually worked as a RA at the dorm, and he had glowing recommendations. For the other tenant, there was "we had no problem with this fellow".

Thanks for the responses. I have taken the decision to rent it out to these two. Hopefully it won't be a decision that will cause me anguish down the line.
0 Reply
Andrew S.
Investor · Raleigh, NC · Member since 2013 · 1k+ posts · 708 votes
12y
@Kris Elco I think you have a very high chance that this will turn out well. You have to remember that in the vast majority of cases, only the top students of a foreign country ever get the opportunity to come the US for studies. These kids tend to be smart, highly motivated, and focused on their studies and jobs. In addition, getting a job offer in the US is in itself a major achievement for a foreign student, because it puts a significant burden on the employer to help with obtaining a work visa. Their employers would not have bothered unless they thought these kids are exceptional.

I deal with a lot of foreign students in my day job, and while I'm not claiming that there aren't ANY bad apples among them, on the whole, I think it would hard to find a better pool of potential tenants (assuming their stories check out as they seem in your case).
3 Reply
Josh C.Pro Member
Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
12y
I 100% agree with Andrew. I am in engineer and went to school and lived with several foreign students; mostly from Asia. They were focused and had wealthy parents, because it's very expensive for them to go to school here. Lots of pressure for them to succeed. I'd be happy to have them as tenants. It tough to generalize, but as a whole they probably party less than your stereotypical frat guy.
1 Reply
Eric Y.
Investor · Denver, CO · Member since 2014 · 84 posts · 52 votes
12y
@Kris Belco I don't want to help you make a "wrong" decision, but I would probably take a shot. They're young and have good jobs lined up so they're going to meet the biggest/toughest criteria: income. Gut feeling absolutely does play a role. I also know that my current market (CO) is very landlord friendly compared to other places I've been (WI / IL) so even if I only ever get the deposit + first month and then we have issues on month 2, I'm well covered financially and can have them forcefully out within 30 days.

Weigh that stuff in, but if you've verified their offers are real and they've been clean since they were here I'd say that would be enough for me. Just like @Andrew S. said, obtaining a work visa in the US is incredibly hard and they've already been weeded through quite a few filters--I know this first hand. Just make sure to explain everything clearly and let them know if the meet conditions X,Y, and Z you won't be bothering them and everyone will be happy.
1 Reply
Robert Brubaker
Involved In Real Estate · West Palm Beach, FL · Member since 2008 · 104 posts · 17 votes
12y
The others have pretty much given you positives on

these candidates. I concur. If you are still unsure- follow-up

on a local reference or two . This should clear up uncertainty

left.

In the absence of conventional " hard" credentials, Candidates

with apparently Good credentials may be evaluated using

" Character Underwriting" techniques , direct verifications, and

evaluation of reasonable representations.

The idea is to select good tenants not to worry that " one

size " of review" doesn't fit all"

For what it's worth you might be interested to consider that

the use of " in the Box " tenant selection criteria is relatively

new. A tally of factors "in "and" outside" the generic reports that

many rely on and consideration of " compensating factors"

as well, brings the best results. Good selection is as much

an art as it is a science. For the most part we are selecting

out good choices -not sure bets. Look at what you have against

what you don't. Best for success!
0 Reply
Rolanda Eldridge
Investor/Realtor · Hoover, AL · Member since 2010 · 1k+ posts · 459 votes
12y
@Kris Belco .Yes, I would rent..credit is one piece of the process...stability piece proven/ income in place

1. Lived in the dorm--know how to live peacefully in community

2. Graduating college..made it thru a challenging task

3. Jobs lined up..interviewed and made it thru some process, interviewing, credit, background, drug testing

4. ****INCOME**** make enough to pay rent..

Every potential tenant is a risk, but this is low....Good luck!
1 Reply
Craig SmithPro Member
Investor · Hixson, TN · Member since 2014 · 25 posts · 6 votes
12y
I would rent to them in a heartbeat. Especially if they were good students.
1 Reply
Kris Taylor
Homeowner · Havertown, PA · Member since 2013 · 85 posts · 16 votes
12y
Curious what OP decided?
0 Reply
Raymond B.
FL · Member since 2009 · 2k+ posts · 357 votes
12y
@Kris Belco

@Kris Belco

Thank you,

Raymond
0 Reply
Account Closed
Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes
12y
Few ideas:

1. ask for 2 or 3 extra months rent up front, 1st months, and the other 2 or 3 months are written up to me applied to the LAST 2 or 3 months of lease

2. ask for a bigger upfront deposit and if after 6 mo. they pay on time, then refund a portion

3. make it where there is an EPD (Early Payment Discount) if rent is received early, the day BEFORE the 1st day of the month, but late with penalty if Received past the 5th.

4. make the rent higher for the 1st 6 mo., then if they pay perfect, it drops for the remainder of the lease term

....And about 20 other ideas, but you get the picture
1 Reply
Rob K.
Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
12y
If half my applicants were half as qualified as them, my life would be a lot easier.
2 Reply
Kris Belco
OP
Minneapolis, MN · Member since 2014 · 12 posts · 0 votes
12y
I posted back on April 10 that I took the decision to rent it out to these two students.

Thanks everyone for your responses and I'm glad to have the support of this tremendous community!
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