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Updated over 8 years ago on . Most recent reply

User Stats

123
Posts
19
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Ray S.
  • Investor
  • Miami Beach, FL
19
Votes |
123
Posts

Renting to tenant with history of bankruptcy?

Ray S.
  • Investor
  • Miami Beach, FL
Posted

I used SmartMove for a credit/background check of a tenant. They filed for bankruptcy 10 years ago, but it is still showing up on their credit report. They have a very high salary for how much they are renting for though. The website recommends I decline them, but they seem like a good tenant otherwise. What are some other factors to take into account, questions to ask, or other ways to protect myself in this case? Thanks!

Most Popular Reply

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4,609
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David Dachtera
  • Rental Property Investor
  • Rockford, IL
2,990
Votes |
4,609
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David Dachtera
  • Rental Property Investor
  • Rockford, IL
Replied

@Ray S.,

I would look at the first applicant's earning history since the BK. 

We tend to look down our noses at BKs, but the truth is stuff happens: job loss, divorce, health issues, ... It's the same as looking at a credit score: it don't say spit. You want to look at the content of their credit history, not a snapshot-in-time number (which will probably have changed by the next time the calculation is run).

If the earnings history is there with a solid payment history, I personally would give that more weight than the result of some algorithm.

...but that's just me. I was in IT for 32 years - I don't trust machines any further than I can throw them. Same for programmers, analysts, etc.

David J Dachtera

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