What Makes a Good Tenant?

Question

I'm an engineer.  I own 5 rentals but have only been in business about 2 years.  I've had 7 tenants, 4 great, two mediocre, one lousy.  But there seems to be no trend as to what stats I could've looked for to determine if a tenant would be "good" or not.  For instance, my best tenant has the worst credit score and my mediocre tenant has the best credit score.

I'm thinking about doing a regression analysis and determining which factors really correlate to good tenants or not.  But I need some help figuring out what categories to even look at.

I'm going to start with the basics: are they employed, how much do they make, what is their credit score, have they ever been evicted, do they have a criminal background, etc.

So, what do you all look for that means you'll get a "good" tenant.  It can be anything, even if it seems silly.

Account Closed · Answer

You just learn this stuff over time.  Some of the tenants I avoided like the plague: undergraduates, anyone in the middle of divorce or recently divorced, applicants who asked for weird changes to the apartment - can you add more closet rods to the closet?  can I paint it a weird color?  would you put in hardwood floors instead of the carpet? can I install a washer/dryer in a studio with no hookups?

And any applicants who are a couple who are bickering the whole time. Or an applicant whose older brother or other family member is doing all the talking for her and being really bossy.  Applicants who ask for lower rent.  Applicants who don't ask any questions that are normal - like looking to see how big the closets are or what the parking situation is, or where they can do their laundry.

There are a lot of clues as to whether or not they will be high maintenance or if they are desperate and will take anything and are trolling for a landlord who will miss something in their application - these are usually the ones who never ask about parking or where the laundry is or look to see how big the closets are, etc.

There is so much more to a "good" or low-maintenance tenant than just their income or ability to pay rent.

Nancy Curran · Answer

Credit checks don't show personality disorders. I'd like to incorporate the Myers Briggs test in with the credit application. But all in all, if you do your due diligence, and a tenant turns out to be bad, I think it's just a bad accident, like a car accident. It happens. You can't control everything!

Mags S. · Answer

@Amy E.  When I look at a prospective tenant,  I consider their 'stress factor' rating, right along with rental history, credit history, etc.  I recently filled a rental.  If I receive multiple phone calls and/emails from one prospective before they see the property or before submitting an application, my red flag goes up and I suspect they will probably be high maintenance. If they carry on that much before they get into the property, they'll probably drive me batty once they start paying me money.  So for me, I'd rather wait it out a little longer for another qualified tenant than accept one that will be high maintenance.

David Faulkner · Answer

Regression testing?!? Yep, you're an engineer all right (takes one to know one) :) Where do you plan to get data from a statistically significant sample size to perform your regression test, I wonder?

How about asking their previous landlords? Not the one just before you, because they might say anything you want to hear to get them out if they are horrible tenants, but the ones before that.

Mags S. · Answer

Not exactly sure what good or bad means to you @Amy E.  are they good tenants if - if they pay their rent on time? If they keep the place clean? Will they get along with the neighbors? When I look at prospects, I try to look at all factors, including some unwritten ones. My rental is in a blue collar neighborhood, and not all tenants will feel comfy there if they are not familiar with the neighborhood or similar neighborhoods. I don't want  a tenant to ask for an early out/break lease early because they dont feel comfortable (aka safe) in the neighborhood.  When showing the house, I try to tune in on the prospects, listening to the questions they ask, what they say and watching their behavior. Are they respectful to me and my property? Do they have that 'sense of entitlement' aura about themselves? Are they asking for things they already know the answer to but hope to change my mind? Are they a 'can you work with me' prospect?  This time around I enlisted the help of some family members. The way things were set up, all of us got to spend some individual time with each prospect while showing the house.  What I noticed is that they looked for reasons to accept an applicant, i looked for reasons to reject them. I had above average housing in condition and size (always trending #1 or within top #10% of neighboring competition) so I knew I had a good product and didn't see the need to settle for a tenant. I believe if you put together a good product, good tenants will come.  The other unspoken criteria is just listening to my gut or intuition.  That usually never lets me down.  If it doesn't feel right, it prolly won't work out in the end, no matter how much you want it to work.

Amy E. · Answer

@Mags S.

Have you noticed any characteristics about applicants that indicate they will be either good or bad?

Shanel Wiggins · Answer

@Amy E.

I haven't purchased my first rental yet. I am starting out as a new RE agent.

I know from experience that all the background checks that you can possibly do doesn't guarantee that a particular applicant would be a good tenant. After all, things happen and you never know what the future holds. If you can get into contact with their previous landlords (along with the standard background check), then maybe you can get an idea of who you will be renting to.

I know a few people who own rentals and they all have had their share of bad renters.

Amy E. · Answer

@Shanel Wiggins

The mediocre tenant is mediocre because she is somewhat high maintenance.  (i.e. her: "the water won't work", me: "pay the water bill").  Rent comes on time, which is nice.  She just takes more effort than with a normal tenant.

Have you noticed any trends in your tenants that would indicate prior to signing the lease that you've got a good one?

Shanel Wiggins · Answer

@Amy E.

Interesting that the best tenant has a bad credit score and the worse tenant has a good score. Is the "mediocre" tenant bad because of late rent payments? Maybe the tenant with the poor credit score has bad credit because of factors other than negative accounts or public records, bankruptcy, etc.., such as high debt to income ratio or excessive inquiries.

What Makes a Good Tenant?

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