Tenant Considerations

[Tony Castronovo]

What financial qualifications do you consider when evaluating a tenant?  Minimum credit score?  Income multiplier (compared to monthly rent)?  Debt:Income ratio?  Other?

[Gail K.]

For us:  Income 3 times our rent.  No history of evictions.  No large number of accounts in collections.   As Brendon mentioned, you look at how much is going out each month for other financial obligations (credit card debt, child support, car loans, school loans, medical payments) leaving little left to live on, let alone pay rent.  Previous rental history (and make certain you're talking to the actual landlord/management company and not their buddy).

You also listen to what an applicant initially asks you.  Those that immediately ask "what are you looking for in a credit report?" I've found to often be a red flag that they know theirs is going to be dismal.  

 Also someone who tries to "talk" you into accepting them with visions of "hey, I've got the security deposit and first months rent right here" so you can skip the credit/criminal/income/previous rental history (that's often the last rent you'll ever see from them) .  

We tell them "that's not how it works". 

And of course there are those who have to move "immediately" (this is typically because 1. they're being evicted, 2. everyone else they have checked with has turned them down to rent to and/or 3. mom or the girlfriend/boyfriend is tired of their lazy anatomy and is kicking them off their couch.)   Their excuse for an immediate move is usually because their landlord "won't fix anything".  Because of this immediate need to move they don't have time to go through the screening process.

We tell them "that's not how it works".

The bottom line is that you are in control of financially evaluating your applicants and if they attempt to  do an end run on this process you do not want them as tenants.  You set your criteria and you use it with every applicant and thus no one can claim you are discriminating against anyone.

Gail

P.S.  This has nothing to do with financials but I have found that those who are late for appointments (and do not have a REASONABLE excuse for such) are going to be late on their rent.   Last week I had someone scheduled to see a house at 1.  I waited much longer than usual because I had a second showing at 1:30 (they showed).   I left at 2 and at 2:10 received a voice mail from the first person that they had car trouble on the way to see me and were at a tire store getting their tire fixed and would be on their way when finished.  Now...if they knew they had problems at 1 why did they wait until after 2 to call me about this?  Did I call them back to say I had left?   Nope.  Did I call to reschedule a visit with them?  Nope.  Would I rent to them?  Nope.   Did I hope they wasted their time driving by my place when I had already locked it up?  Yep.