Will you rent to this situation?

Question

I have a condo at San Jose. I  got an application from an older couple (50s, not married, with a adult high school kid). Would like to get some suggestions/opinion whether I should move forward with them.

Pros:

- Decent income. Almost 7x of rent. They move because the woman got a job in Tesla (verified)

- My current tenant showed the place (she is a really good tenant but need to relocate to out of California) and said the woman is really nice and sounds like a good fit.

- Older, quiet, my previous downstairs neighbor is also an older couple -- the last thing I want to do to them is to have some renters party all the time which will absolutely impact my old neighbor.

- I got both of their previous landlord rental reference, said they are good tenant. The woman very honest told me she recent have one rent paid 2 days late with late fee due to all the transferring, relocating, new job vs. actually her landlord didn't say anything about this. I feel she is honest.

However, my concern is credit score. The woman has only 569, the man is 670.

- Woman did told me her credit score may not above 650 (which I posted as requirement of rent ad), but come out even lower. She explained it's related to her divorce a few years ago still not sorting out yet. I don't quite understand the detail. Strange thing is her credit available show $300, vs. used $337. credit usage >100%..

- Past due history (looks like not rent related), the woman has 12.63%. even the man credit score not great. 3.83% past due.

I'm hesitating whether move forward. The woman offered to have one of her parents who has much better credit score as co-signer. I think at least that will bring the average to >650. Then I actually will have 4 adult on the lease be responsible. (the couple, their adult kid, and good credit parent). -- from here I feel they do like the place and seriously about renting it.

Any suggestions?

Joe Splitrock · Answer

@Bei He I would avoid any personal judgement or gut feeling. Whether she is nice or not should have no bearing on your credit score policy. More importantly, the best con artists and scammers seem like the nicest most honest people. I am not saying she is, just warning you that being nice is immaterial to screening.

We usually average credit scores if there is more than one applicant, but that still comes up under 650 in this case.

I would dig into the credit report and look specifically at her recent payments over the last 12-24 months. See if she has been making her car payments and credit card payments on time. If the source of her problem is a divorce, it should be in her past. Look for unpaid judgements or seriously delinquent debt. Verify addresses on the credit report match her landlord reference addresses.

A cosigner or extra down payment are both options too.

Account Closed · Answer

Income is more important than credit in my opinion. Also as long as no evictions and good references from prior landlords I would go ahead if they seem like nice people.

Bei He · Answer

Thanks everyone's input. I end up gave them 2 choice, either 2x deposit, or get a co-singer to bring the average credit score above 650. They chose the 2x deposit.

Signed the contract, tenant move in 2/5. Will update later see how it goes =)

Erik Nosich · Answer

@Bei He I would get 2x the deposit, ask for the co signers and be sure to get everyone’s social security number. If it goes bad, you can go after their credit when you get a judgement against them.

Additionally, watch them very closely the first few months. First violation, put a notice of violation. It could be noise, parking or whatever.  I have learned of you are strict in the beginning and demonstrate that you are going to enforce all the rules, they tend to fall in line and follow all the rules.

Martin Neal · Answer

@Bei He this is a tricky one, I would double check and make sure they haven’t been in eviction court and who would be responsible for paying the rent. If they make 7x the income, I would check the credit report to see what’s not being paid too. It can give you a better picture of what to do.

Brett Antisdel · Answer

@Bei He

You said you’re current tenant showed the place to them. If you’re still on the fence then I would set up a second meeting to see for yourself. This would give you a better idea if you choose to go with your gut versus the numbers.

Sharon Wu · Answer

To me, the good income and no fraud history goes before the credit.  Bad credit usually gives me a good reason to ask for more deposit.  Make sure you check do your due diligence and verify what they put down on paper is true.  And make sure they have the ability to pay you is more important than just having the good credit.

Tina Tsysh · Answer

Bei,

I agree with what other members are suggesting. Look into her credit history in more details, in particular, see if she has been late on previous rent payments. If her reference check says she is a good tenant and another person is willing to co-sign on the lease, I would move forward. Especially since the neighbor downstairs is an older couple as well, you want someone with a similar life style to be their neighbor.

Bei He · Answer

Thanks everyone for the input! For the California max deposit, does that include the pet deposit?

My original ask is 1x rent + $500 pet deposit.

For the max legal deposit I can ask, is that 2x rent + $500 pet deposit or 2x rent including $500 pet deposit?

Brian Larson · Answer

Yep.  I'd move forward with an increased deposit.  The deposit should mitigate the risk.

Will you rent to this situation?

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