LOW RENT BACKGROUND CHECKS

[Anna Catron]

We have 2 homes that rent between 1400-1600 and we do the full background/eviction/credit checks before they fill out the application.  Do you find that deters lower rent clients?  We're looking at a triplex that would rent each unit between $450-$600. We'll fix them up and increase the rent to $500-650, but still, I can't imagine they'd be interested in paying $45 just to apply. Am I making bad assumptions? 

[Shain Ismailovski]

You'd be surprised. While yes, background checks in general will deter some, others will still apply and take their chances. I've had some pretty poor applicants apply, low credit, history of defaults etc etc. That's why background checks at all rent levels are essential.

[Jill F.]

I do not charge for filling out an application for my apartments in that price range; because I know that paying (multiple)  application fees is a hardship for many low income tenants. However, we don't show an apartment without a completed application and until I have verified employment, income, court reoords in every
jurisdiction on the application,  Once I have shown an apartment and have an interested tenant, Basically, if they  didn't  lie on the app then they should pass the  background check. I may require last month rent or the honestrenter.com quiz for super low credit.

[Latasha Griffin]

@Anna Catron what company do you use to conduct background checks?

[Anna Catron]

@Latasha Griffin We use Avail.co for most of our online property mgt tasks. They provide contracts, direct deposit, maintenance requests, property postings etc. 

[Anna Catron]

@Jill F. So, you haven't been burned.  I'm so worried about problem tenants.  Once we get it fixed up, it'll attract higher rents, but for the present, we're going to leave it as is.  

I didn't know about honestrenter.com, that's interesting.  You find it is accurate?

Thanks so much!

[Jill F.]

@Anna Catron We are still 'testing' honestrenter; so far we've been very happy with tenant picks from that site. I guess 'burned' is relative; I picked one girl that let her boyfriend(s)? deal drugs out of the unit; I've inherited several more of these.

I have/had a a number of slow payers in this asset class but compared to churning the units looking for a 'perfect' tenant in this price range we have found that being 'flexible' about payments is worth while. I actually have not yet been burned by a tenant with a payment plan. I have one right now that is iffy. We'll see. But even if that one doesn't work out still less than the cost of one eviction.

I am not at all flexible about drug dealing (out they must go). But I have found that they are generally open to reason and so long as they are given a way out they will leave. They'll usually cooperate because their gf wants the deposit back. 

[Anna Catron]

@Jill F.

Cool!  Yeah, there's no room for "dealing" in our life either. 

I was looking at all of your deals!!  You are on a roll!!  Very impressive!  Looks like easily getting the 1% on all of them.  Were you in real estate before?  How'd you get so good so fast?

[Rose White]

@Anna Catron hi Anna,

I think doing background check is more for you than for the tenant. I would want to do background check even if they had to pay $1 in rent. I am allowing someone to live in a house i am responsible for so they have a place to stay (even tho their rent payment is helping your mortgage). I don’t think $45 background check cost would hurt anyone, really. If at worst case, and if i was in a shoes where I don’t make enough, i would be up front with the landlord about the fee and ask if i can get it waived for me to go through the background checks.