Tenant Possibly lied on rental application?

Question

Not sure what to do or if It even Matters. But here is the situation. I am renting out a single family home. I ran background checks and screened the tenants they seem like good people. Today I am preparing and organizing to get ready to shoot them over the lease to have it signed tonight and I notice something one of the paystubs for the company looks very weird.

The company is her brother in laws business and she gets paid to do the books around $1200 biweekly. she has not proof of this income except for the very sketchy looking paystubs that she emailed me.

She makes another 2000 biweekly from a credible source and her husband makes 3k weekly from a credible source. Should I care that this one job seems very weird since they can easily cover rent ($1750).

I know it will come up so I will just say it. They have not bought with this type of income because of bankruptcy back in 2008 (the crisis ) and they do not know how to manage their credit. Late payments on a few accounts typically less than a week and they open and close alot of credit cards as they use them. example open a walmart credit card for a big purchase. pay it off in a year then close it, opening a new one 1 or 2 years down the road.

Thomas S. · Answer

If you are determined to rent to them do not offer any lease other than a M2M. If they are trust worthy and reliable, which you should already know by contacting their previous landlord, then they should have no problem with a M2M lease.

Bad tenants will never agree to sign a M2M lease.

James Barnhart · Answer

I would consider another applicant and see if they look better to you.  If not, and you are comfortable with the first applicant, maybe so.  I would be concerned myself because you think they are not truthful.

And, I always rent month to month to everybody.  That way, if there is an issue, I give them a 30 notice.  (like the woman that got a snake)  And, I don't trap the tenant if their life situation changes, and they need to move, they just give me a 30 day notice.  I always have several rent applicants every time I have a vacancy.  (And, now I have wording in the rental agreement that says, no reptiles in the rental home.)  The tenants like being month to month and I treat them well.

Sherwin Vargas · Answer

I thought they were good people from the beginning. She noted that it pretty much was under the table. Hopefully everything works well but their family seems excited about the home.

Thank you guys!

Bryan O. · Answer

@Sherwin Vargas what is your comfort level with them? When it comes down to it, her brother probably pays in cash, which keeps it off the books for her. Very likely, she does not report this on taxes and keeps 100% of that income. As there is no way to prove it, she is in a dilemma: make something up, or try to qualify without the income. If you think she is actually legit, then she is probably just making it up to give you the document. If not, then she's lying... If she is lying, why? They already meet your standards so that income doesn't even matter.

Interesting dilemma... how good are you at reading people? Best of luck.

Marcia Maynard · Answer

If the household income is sufficient to meet your minimum criteria to rent, without counting the income you consider dubiously documented, then I would go forward with the leasing up.

If you want to consider the amount of her income from a job source for which she is the bookkeeper, better to ask for documentation such as her W-2 or 1099, or their whole tax return from 2016.

About the credit accounts from retail outlets.... some folks do that to get an instant discount on a large purchase. As long as they are not carrying a significant amount of debt on credit cards. I wouldn't worry about it. Our rental criteria states "No outstanding debt in excess of $1000 that is not in a payment plan." Opening and closing many credit cards is one way for them to lower their credit score. It will limit their ability to purchase their own home, thus limiting them to being renters for a good long time. That could work in your favor.

Kim Meredith Hampton · Answer

@Sherwin Vargas you could do a MTM until you feel comfortable with them and how they pay their rent

Sherwin Vargas · Answer

Thats what I figured also how  i felt.

Carley M. · Answer

If you can are comfortable with the other documentation, and they can afford the rent based on their income, and you're comfortable with their credit worthiness, what's the problem?

Tenant Possibly lied on rental application?

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