Sorry for all the questions lately. I own two properties, the other property I've owned for several years, rents mostly to graduate students and is in a pretty good area and is pretty cut and dried. The newer rental requires more hands on decision making so I am new to this part.

Two sets of applicants applied around the same time. One of them is a couple in their early 20s, have better credit histories and scores (mid 600s), good landlord references from current and previous landlords. They make 3x the rent from jobs with 1-2 years history, but also have a high amount of total debt, part of which they are paying off using income from his new business, which has only been in operation since last September (he just graduated from college). Also they have a low amount of liquid funds to fall back on.

The second couple is in their 40s, one has been working a job for two years and can make 3x the rent payment herself, but also he's been working in his job since 1986 and makes 1.5x what she does per month. They both have no credit cards and no other debt payments per month. The problem is their credit history - she has 3 credit cards totaling about $16K that have been charged off and gone into collections that she is not paying on. He has several unpaid medical bills for about $1700 from 2008/9, a recent utility that has gone to collections as well as another unknown account in collections.

At first I said No to my PM about the 2nd couple, but he spoke with her and she said that the chargeoffs were joint credit cards from a divorce after which her ex-husband left the country, and she's working with a lawyer on those charges, and the lawyer told her not to pay on them until it was resolved. She gave the contact info for the lawyer for us to verify. I don't have an explanation for the unpaid medical bills from 2009 yet, but the utility he said he didn't know about, then later said he had gotten a divorce and his ex-wife was supposed to make the last payment but never did, so he will clear that up.

The other thing is the 2nd couple both lists previous landlord as their parents (separately). Odd but my PM said sometimes that happens in a divorce, which both of them have been through, but still odd. So I would only have current landlord as a reference, and he hasn't replied yet.

If the 2nd couple's story checks out as well as current LL reference - would you rent to the ones with the higher incomes and longer employment history - but possibly spottier credit history and only current LL reference, or the younger couple with the better credit history but high amount of debt and possibly more unstable current incomes?

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