Would you rent to this tenant? First Rental, hv done homework but lack experience

Question

Hi,

First timer and I just bought and renovated a Duplex in Dekalb, Atlanta. it is a B to C area. Each unit is a 2 bed/1bath, expected to rent at $650-$700. Have got a lot of interest but not many people willing to give a $25 application fee (and the $750 deposit). hv 2 duplexes as neighbors but they are not nearly as nice and rent for around $525.

After a few viewings, found a lady who drives for Uber, also does a couple of side jobs so (barely) makes the 3X minimum. Last 2 landlords (3 years) give her a clean chit saying she is a good tenant, keeps the house clean (she showed me pics of her house which looks nice) and they would recommend her. Trying to get with current landlord. She drives a nice car, is well spoken and gave me a $200 good faith deposit on my request. She told me she had a bankruptcy in 2009 (dismissed), also her resume, filled out the application the same days etc.

just did the background and credit check with Rent prep (chose the setting for 600+ score, max bankruptcy, Zero judgments). The report came back with the following:

- no Criminal background

- Seems like she has stayed in 5 places in the last 6 years ( i have the information on the last 3).

- Evictions:  2 Records (one in 2009 Civil filing with $0 amount, and one in 2010 Civil Judgement $1890 - both by the same property mgmt group -

- Lien/Judgement Filings: 3. One with a Property Mgmt group (judgement $0) in 2011, another 2 with an autocredit company in late 2009 within 2 months of each other with a judgement amount totaling to $8k.

- Bankruptcy - 1 - filing date in early 2010 and closed/discharged in mid 2010 - probably linked to above judgement.

She did tell me about the bankruptcy but not about the eviction.

My question :

- How to read the screening report on evictions: does a record mean she has been evicted? what does the $ amount related to a eviction history signify? shd i try to call the PM company to find about more - i found them on the internet.

finally - shd i rent to her or shd i keep looking and if yes what shd i check/ask for. i am planning to talk to her soon about the background. my gut says she is nice but she is being a little bit too nice as she needs this house - she easily gave the money order for the deposit.

What do you folks advise,

thanks

Ravi

Randy E. · Answer

@Ravi Prabhakar, how long has it been for rent?  If it's been marketed for more than two weeks and this is the best applicant you've received, you should re-evaluate your pricing.  I would drop the price to $600-$625 and keep the $25 application fee.

The neighborhood dictates the rent price, not the landlord and not the "niceness" of the unit compared to its immediate neighbors.  A "nicer" unit might command a slight increase in rent, but not a 33% increase from $525 up to $700.

What you should hope for in providing a cleaner and nicer unit in such a neighborhood is a smaller increase in rent, but more importantly you should be able to choose a better quality tenant.  By increasing your rent so much over your neighbors, you'll maybe get more money on the lease, but you'll eventually lose any gains to non-payments, evictions costs, and getting the unit ready for yet another tenant.

Lower the price, place a good tenant, and watch them stay for a longer time.

Don't rent to the Uber lady.

Anna Watkins · Answer

Tough spot you're in, but I'd be really wary of renting to this tenant.  The only Uber drivers I know are barely scraping by, and it sounds like she may be teetering on the edge financially.  Did she say why she's moving? Why does she *need* a place so much? How much is she paying in rent where she is?  Can you find out anything from the property management company that evicted her?

Do you have an eviction question on your application? (you should)  The challenge with one eviction is that the tenant now knows how that system works, and how (if push comes to shove) to work that system again.

Given the area, I'm not sure that expecting $125+/month over nearby units is realistic, no matter how much you put into the renovations.  Lots of interest and no takers is a sign that you're asking too much -- maybe not too much for what you're providing on the inside but too much for the area and the neighbors your tenants will get.

Good luck.

Brandon Septor · Answer

I would pass also, she has unreliable history and still outstanding liens. If you ever did have an issue with her you would never claim any of your money back and there are people standing in line to still get money from her past.

The separate issue is at $650 you are 20% above everyone around you. The renters you are attracting at your price range a going to balk at the $25 application. Why a $750 deposit compared to the standard 1 month rent deposit?

My first rental I had I did the same things as you. I charged $1500 due to upgrades when everyone around me was at $1200. I had a $50 application fee and a deposit along with last month rent. I poured everything into this rental and I would be damned if someone was going to ruin it.

I found tenants but it took longer then it should (I was at over 2 weeks) when they did find out what their neighbors(only took them 3 months) were paying they threatened to leave unless I lowered my rent. I lowered it and they stayed their full lease but still almost lost them and it took longer to rent then listing it competitively from the start.

Damon Duperre · Answer

I totally agree with Steve. There are red flags all over this story. Even one of them would be enough for me to not rent to her.

If you want to know what the evictions mean the way to do that is different in every county of every state. You might be able to look it up online (at the county clerks) if you are in a big city or you may have to go there in person or call them.

But it doesn't really matter if she won, lost or whatever she still had to go to court which means she was given a notice to vacate and she didn't. Actually the worst thing is if she won.

Steve Babiak · Answer

I'll start with advice about this applicant - you do not want a person like this for your first tenant. Just decline her application due to evictions. Send a proper adverse action / rejection letter to comply with FCRA.

The dollar amounts with the eviction records are probably the "damages" (lost rent and other costs) that the judge awarded.

There may have been two filings by the same company. The first was probably withdrawn - this happens when the tenant pays up and is therefore allowed to stay. The second probably was a boot out - no pay no stay.

If you want to contact former landlords to discuss a tenant of theirs, I suggest you get a form that the applicant signs authorizing you to contact the former and current landlords; you'll want a similar form for employers as well. Most established landlords won't discuss anything without such an authorization. Now, large PM companies are a mixed bag with respect to whether they will have records that far back. Some will have a good archive of records, while others would be lucky to look up something less than two years back. So even if you tried to confirm the eviction, you might get nothing worthwhile in response from the PM.

Just decline this one for your own health, well-being and good :)

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Silvia B. · Answer

I would pass if it was up to me. She has a bankruptcy, liens,evictions and 5 rentals in 6 years ( two of which were evictions). I do not see stability here. Driving a nice car doesn't imply ability to handle finances.

Would you rent to this tenant? First Rental, hv done homework but lack experience

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