Renting to my first tenant

[Mitchell Smith]

Hey guys!

I'll keep it short and sweet. Have a lady that wants to rent out my primary home and when we met her she seemed very nice and very interested. She let me know ahead of time that she has more than 3x the rent in monthly income, but she doesn't have a very good credit score due to a nasty divorce 2 years ago. It's sub 550, but she makes roughly $6,300 between child support ($1,000) and her paycheck from work. She has been at her current job for 7 years now and it seems very steady. Most of what her credit report came back with did show a lot of delinquencies around 2015 when she had to pay for a lawyer in her divorce. What are some things that I should look out for in addition to what I've already mentioned? And what do you typically do for someone who has less than amazing credit to help hedge against any risk? Thanks for y'all's help!

[Paul Smith]

Divorce seems to almost always destroy a credit score.  I am not really sure that I would count her child support into calculations for her income.  Thats a third party that she doesn't have control over.  If he loses his job that support may vanish.

Its important to have that conversation with the previous landlord.  Was she always on time with rent?  Does she have a lot of other monthly payments that she is making?     

I am personally not a fan of the shorter contracts.  If she finically goes south in month 3 of a 6 month contract you will still have to evict.  If she leaves after the 6 months is over you will have to start this process all over and incur the loss of income.  So I am always a fan of 12 month lease.