Screening Tenants amid Covid-19

[Silvana Lavado]

Hi BP family! I have a question about screening tenants amid the Covid-19 pandemic. I’m sorry if this has been asked or discussed in another forum or YouTube video, but I haven’t been able to find them - if you have a link to a resource, I will gladly go there. Essentially, I put my place for rent before the pandemic really hit my state (about 4-5 weeks ago). At the time, my asking price was a little on the high side, but I was still getting several request to show it and I was confident it would get rented in a few weeks. Of course, once the my state went into a state of emergency, everything slow down and I’ve had to reduce my asking rent from 1,500 to 1,400 and now 1,350. Now I’m getting request again, but I’m having trouble determining how to screen a tenant in this new situation. My requirements are good credit, good landlord and work references, no previous eviction, and at least 3x the rent, but what do I do now if someone meets all the requirements except for income because their their hours have been reduced or they’re in unemployment at the moment until everything gets back to normal? What if they have good work references and I receive feedback from their bosses that they will come back to work after everything opens again? Or what if, given that unemployment checks are higher now due to the CARE act, they meet the 3x the rent but with unemployment? Is it legal to ask for their unemployment checks as proof of income? Any advice would be greatly appreciated. Thank you!

[Shain Ismailovski]

This is tricky because I don't think you should necessarily relax standards that are meant to protect you. It's understandable that you would like to help people in need but you are also running a business and if someone isn't employed or their income doesn't meet qualifications that would be a red flag even in the best of times. They have unemployment now, but what happens if it runs out in a few months and they still don't have a job? I'd look to reduce credit score qualifications and maybe decrease the initial security deposit needed to a months rent, but I wouldn't go much further at risk of getting the bad end of the deal. 

[Account Closed]

I'm sorry you're in this situation.  But, I think you need to wonder why they're moving.  This was one of the first questions I asked applicants, after I chatted them up and got them comfortable, "So why are you moving now?"  If you catch them off guard after they've become comfortable, you can often learn what's really going on, or you can see that they all of a sudden don't get eye contact or they blurt out something they didn't intend to share like, "My aunt doesn't want me sleeping on her couch anymore," etc.  LOL.

But, if they are dealing with unemployment, or their hours have been cut - why are they moving right now?  Your rents aren't cheap.  So, my guess would be that they already owe their current landlord rent, and they're hoping to get away with some free rent from you before you kick them out.

I'm not in your shoes, so it's easy for me to tell you to just not rent to anyone who doesn't meet your normal criteria, which I hope is normally really tough.  But, that would be my advice, if you can afford to stick to it.  Because, if you lower your standards, it could end up costing you a lot more than just lost rent.  I know because I worked for an owner who told me to lower my standards during the recession in 2008, and we ended up with a disaster tenant who destroyed carpets, on and on.  Tenants who don't meet tough criteria can cost you more than "just" lost rents in damage, etc.  Our nightmare tenant also resulted in other tenant complaints, cops being called for noise, parking crazy in the parking lot taking up two spaces, destroyed carpets where they let cigarettes fall and burn on the carpet (and smoking wasn't allowed), her baby daddy moved in almost immediately - it can result in lots of time dealing with complaints and problems and I almost lost good tenants, too, who I had to assure I was getting rid of the nightmare tenants.  

Anyway, they can cost you in more ways than just lost rent.  I hope you can weather the storm without having to compromise your criteria.  Sorry you're dealing with this.

[Silvana Lavado]

Thank you both for your response. You’re right. I need to stay strong and maintain my requirements. They were put in place for a reason. I just hope that it rents quickly with the discounted rent. But like you said, it would be worst to get bad tenants in the house, than to have it vacant for a little longer.

Thank you so much for the advise! It was just the reassurance I needed!