Another screening question (bad credit vs good rental history)

[Dustin Beam]

Hello beautiful people of BP,

I know I'll make the final call, but as a LL of 15 months I'm still trying to determine what really matters most and what to avoid when placing a tenant. And I'm not too proud to ask for advice, so here I am :) I do have hardlined "principles" for denial for some items like felonies, evictions, and income, but credit is a gray area for me.

Anyway, I have an applicant that I get a good gut feel from, has no criminal history, has no evictions, and the pay stub indicates the income is 4.5x the monthly rent. Applicant works for an insurance company so part of that is commission, but salary is still 3.5x rent. So that's the good. Here's the bad, if I understand the MySmartmove report, the applicant had one bankruptcy in 2011, and currently has some collections (pic shows some of what I was given). 

Part of me says this is a person that maybe isn't the most responsible spender, but knows that rent comes first. Part of me says this is a person that doesn't pay what they owe.

I'll be calling their employer and previous LLs, but assuming that checks out, what say you....rent or pass?

[Stephen E.]

@Dustin Beam if you are determined to take this tenant I would find a flat fee eviction lawyer now so you are ready when the tenant decides to put you on the list of creditors he/she views as payment optional. One of whom is apparently Laclede Residential Primary which sounds suspiciously as though it could be a REIT. More seriously, this is a risk you just do not want to take. I do not take tenants with collections because I do not take tenants who do not pay their bills on the grounds that they may decide not to pay my bills. How many units do you own and how many other revenue streams do you have to cover the losses if he/she stops payment? How many evictions have you gone through and do you have the reserves to wait it out with no rental income while you have to keep paying the mortgage, property tax, insurance and all other operating costs, plus the lawyer and court costs? Then there could be damages if the tenant decides to take out their frustrations on your property. Do you feel like costly renovations and repairs of vandalism?

I think you are being much too cavalier about this tenancy decision. You need to be far more cautious about just who you give the keys to. It could be months before you get your property back and you might not get a cent in rent and then there could be thousands in damages. It is far better to stay vacant, wait for a month and go without a month's rent than it is to take a non performing tenant and have to manage a rapidly deteriorating bad tenant situation.  Good credit needs to become one of your core principles in tenancy granting decisions because a tenancy granting decision is in fact a credit granting decision. If your rent is $1,000 a month and you lease for a year you are banking on them being good to pay you $12,000. What is the likelihood of this tenant reliably doing that? The tenant can't even pay DirectTV on time, and not even on time, it is so bad they have set collections onto them. This is not a good risk for you. You should not even be considering this person seriously at all.