Worried about an overqualified "renter"

[Nam Trang]

My first tenants are moving out and I'm showing the house to a few different people over the next few days. Most applications have poor credit (no evictions though) with verifiable income at 5-6x rent. That pretty typical here, because anyone with decent credit and a good job can easily purchase a house. It's also a small town where I have mutual connections to every one of these people.

Then there's one other applicant that's moving to town and is thinking about renting instead of purchasing. Their credit is excellent and income is 21x rent, so of course I'm worried that they're just looking for a short term stop while they house shop. I plan to be pretty straight forward with asking about this when I show them the house.

Do you worry about someone having too good of income and credit score?

[Nathan Gesner]

It doesn't worry me because I'm prepared for a lease break.

First, you can offer them a one-year lease at $XXXX and a month-to-month at a higher rate of $YYYY. I usually charge a 25% increase for someone to occupy on a month-to-month basis. 

Second, have a strong process for early termination. If they sign a one-year lease with me and then break their lease three months later, I charge a penalty equal to two months rent. If they break their lease with less than six months remaining, then I charge a one-month penalty. If they leave and refuse to pay the penalty, I apply their deposit towards the termination fee and charge them for everything else or send them to collections.