Renting out: questionable history, please advise

[Scorpio Johnson]

We have an offer to rent out our property but the prospective tenants have some questionable history.  Low credit scores (low 500), unpaid medical bills, a few collection agency accounts, supposedly never late on rent.  One of the tenants has a misdemeanor (Resisting Officer Without Violence (Resisting Arrest)), found guilty.

We've rejected the offer because we were pretty sure this is not our cup of tea, but they came back asking if we would consider if they would pay 6 or 12 months up front. This is a brand new house and we'd like to find easy renters. Having an offer to pay 12 months up front is tempting, but what kind of issues could we expect down the road? This is our first renting experience and we would appreciate to get some pointers.  Any scenarios that we should watch out for?

[Bradley Bogdan]

@Scorpio Johnson , RUN, don't walk, away from those tenants. It always amazes me when prospective tenants (including some of my clients), think it doesn't look shady to have an awful looking application, but have a stack of cash. Unless your property is dirt cheap, we're talking about thousands of dollars of rent up front. If they usually have that much cash, why is their credit a mess? There's a million and one reasons to avoid these folks. Politely inform them their credit isn't up to par and that's why you will not rent to them. Case closed. 

Now, if you're in an area where you're going to have a lower income tenant, you can definitely find ones with stable incomes (usually fixed), a backing program (like Section 8 or HUDVASH), or a good rental history which lends confidence. Avoid evictions like the plague, don't focus too much on credit score, but more the nature of the credit (does it all stem from a divorce? a hospital bill? an extended period of drug use?) and whether they're addressing it. 

Assuming you are renting to low income folks, remember that the poor have a lot stacked against them. On paper, they're never going to look great, but if they show issues in more than one area, that should still be a huge warning sign. 

Finally, be fair and firm with tenants. Most tenants will understand rational decisions and will appreciate knowing that they can trust you to hold up your end of the relationship if they hold up theirs. A good reputation will help lower your vacancy rate. Tenants talk.