Which applicant would you select?

Question

Rent is $750+$50 with pet

#1- married couple, she makes $17k per year, he is unemployed.  However, they tell me they get an additional $30k annually in August and $900 from a lawsuit, but no documentation to support it except screenshots of banl deposits.  No references listed on application and when ask about prorating Nov to start on the 15th, they said they could, but wouldn't have deposit until Dec 1st.  Current landlord said twice paid late.

#2- single person makes $25k annually, same job for r years and can provide first months rent and security deposit at time of signing lease.  However, they are trying to find a sublesselor to take over their current lease.  They live in a duplex and wants more privacy. Current landlord states has laid on time.

How long can I wait for #2 to find a sublease or should I just flat out deny #1 right away?

Any advice would be great

Steve Rozenberg · Answer

I would reference and stick to your policies and procedures and have clearly dis closed qualifications

Unfortunately this is where most landlords mess up and end up in some form of lawsuit for fair housing or discrimination and end up having to defend themselves in court and all they were trying to do is get the most qualified applicant but again there’s a law and there’s a reason these people are protected as tenants.

Some of the conversation I heard in the prior posts are based on emotions not on business tactics and they were going off of what they felt they should do there’s a legal standard of what you have to do based on the current law for the states I would abide by those laws and take emotions out in my opinion  and run it like a true business

Christopher Brainard · Answer

I assume this is a trick question, as neither can afford to pay $800 a month in rent...

-Christopher

Nathan Gesner · Answer

@Brian Tisler the only reason this is a predicament is because you have not established standards. The short answer is that Applicant #1 should be denied immediately and you should not hold it for Applicant #2. Continue marketing it until you find a qualified tenant or Applicant #2 gets their act together. Let me explain.

Applicant #1 makes approximately $1400 a month. Rent would be 50% of their monthly income making them a high-risk tenant. She also has an unemployed husband in a city of 66,000 with an unemployment rate of 5%. On top of that, they have a pet which should be a source of increased income to you instead of increased risk.

My policy is that the applicant should earn 3x the monthly rent which means they would have to earn $2,100 a month. If they get $30,000 in August, tell them they are welcome to come back in August and pay six months rent in advance. I also require tenants with pets to pay a higher rent. Nothing gross, but it should be enough to mitigate the risk of a dog causing $3,000 in damages to the carpet or back yard. Even $50 a month will bring in an extra $600 a year.

As for Applicant #2, their income barely meets the requirement of making 3x the monthly rent so they may qualify but I wouldn't be doing backflips over them. My policy states I will not hold a unit vacant for an undefined amount of time. If they want the unit, they must put the deposit down within 24 hours and agree to start paying rent within 7 - 14 days, depending on the market. If it takes her a month to sublet, that's her problem not yours. I would continue marketing the rental and tell her she will just have to take her chances on it being available.

Set your standards! Put them in writing!

Anna M. · Answer

Are these your only two options or can you simply get on with your search and not be limited to these 2 options? That being said, I believe what you meant on #2, is current landlords states has "PAID" on time?  What is their debt to income ratio like?  Would the $25K/year be sufficient to cover rent alongside other expenses.  I think you would need to know that and/or provide that information for better input.  If rent is the only expense, then it seems to me that while the $25K is not at X3 the monthly rent which is what many like to see (I personally am okay with X2, but again depends on current debt to income ratio), you might be OK.  I would not however wait, because vacancies are costly.  Perhaps do a holding deposit if they are really serious about renting from you.  That holding deposit becomes part of their refundable deposit or is forfeited if they do decide not to move in after agreed upon time.  In the end, unfortunately you cannot be in the business of holding out and hoping they take you on your offer.  You are the one with the property, they are the ones needing to rent.  You have to meet halfway, or else keep looking.  #1 on the other hand is too flaky for my liking, too many red flags there.  I would pass on #1.  #2, I would get more info, just my two cents.  All the best.