Potential Tenant - What would you do?

Question

I have two potential tenants currently and am weighing my options. Both report a good income  well over >3x monthly rent, but both have criminal background history and low credit score (upper 500s). How should i weigh this into my decision making? What are dealbreakers for you?

Candidate #1:

Assault - 2001 - Omitted from application (only discovered on background check)

Low credit score likely due to large student loan, all other loans seem to be current and paid on time for the most part.

Candidate #2:

Assault-2011 (19 at the time) was disclosed on inital screening form

Haven't completed background check yet so no further details on why the low credit score.

Andrea Townsley · Answer

To give the benefit of the doubt to the first guy, 2001 was a long time ago now. Maybe he didn’t disclose bc of how old it is, thinking it’s irrelevant now. Depends what kind of conversation you had about it with him beforehand and what the app itself says (some say only disclose back ten years, for example).

I would probably see if I could find the court documents to see what actually happened, and I would take the age of both the crime and the offender into account. This was almost 20 years ago, has he had other run-ins with the law? Was he a dumb kid at the time or was he middle aged? Was it a wrong place at the wrong time type of deal?

I, too would prefer to look at credit history and not just score. The way scores are determined is a bit arbitrary. You can have a recent bankruptcy and a 700 credit score.

Heath M. · Answer

1 is out for sure.  2 is questionable depending on the completed background check.  I'm not crazy about the assault but it was disclosed and it was also 8 years ago.  I say no violent felons so that passes that hurdle.

I had more luck on FB Marketplace so maybe cast a wider net for applicants.  Good luck!

David Stumpf · Answer

@Chad Bailey

Candidate 1: hard no.  Lying on an application is unacceptable.

Candidate 2: most likely no. Assault+bad credit=low financial responsibility and poor judgment.

You mention that you are more concerned with credit history then score however I look at credit score as basically a prediction of how likely a person is to pay their bills. The credit reporting agencies have much more experience with this so I trust it.

IMO start looking for candidate #3. If you wait for the right tenant you will save yourself a lot of headaches.

Dennis M. · Answer

What’s with this candidate 1 and 2 stuff ? You ought to have dozens to pick from not just  two losers . You need to look at your marketing , I have a vacant unit right now and have 76 different people message me to see it and in just two days . It’s nothing special . I’d work on your ad to get a large pool of candidates

Amy Beth · Answer

@Chad Bailey. Applicant one is an easy no since the applicant lied. You caught them in one lie so who knows what else the applicant is lying about.

Applicant two is unlikely unless you are desperate.  I would accept more applicants and if this is the tenant pool in your area then check the credit of the second applicant and see how he stacks up against the other applicants.

Chad Bailey · Answer

Karl/Alan,

Thanks for the response to add more clarity around the situation I am talking about a SFR.  This is my first time leasing a property, however it is paid for and therefore I'm really in no rush to "settle".  I've told people that Credit history is more important than credit score and I would be willing to evaluate a full credit report.

Alan Grobmeier · Answer

@Chad Bailey, Candidate #1 is out for sure.  I tell ppl when they fill out an application NOT to lie.  After all, if they will lie on an application, they will lie about the 'big' stuff too.  In my world a lie on an application is an automatic rejection.

My comments to applicants are as follows:  I don't care what you've done.  I've either seen it or done it myself.  Tell me about it and we will see if we can work it through.  Don't tell me and I find out, you are automatically rejected.

Candidate #2 is a maybe to doubtful.  You have not told us if this is a SFR or MF property.  If it was SFR, I'd take the state max as a security deposit to limit my risks.

If it is a MF, it's a hard no.

Hope that helps.

Karl B. · Answer

Hello. I only invest in multi-family and don't let potential tenants with violent histories in my properties, but if you're comfortable with letting one of these tenants in I would check and see if either can get a co-signer as that will help minimize the low credit score and you can go after the co-signer (as well as the tenant) in the event there's an issue with rent or damage to the rental.