Rental Property Investor · The Shores of Lake Erie · Member since 2018 · 33 posts · 15 votes
Looking for advice on a potential tenant. Ran application through rentredi. No criminal or evictions. Has been in same rental for 9 years. Moving b/c landlord is selling duplex and she has always wanted to live in my property. She has emailed me about once a year asking if I have openings. Im lakefront on lake erie and she lived across road. Solid income at 4x rent at a good hospital job. But her credit is bad, 480s bad. Looks like a bunch of small balance credit cards and such. She gave me her current landlords info and permission to contact. If all checks out with him im leaning towards a yes. Should I reconsider?
How long has she been at the hospital job? I've often thought of stability as or more important that credit score. If she's been in one place for 9 years plus her job for several years as well those are two big pluses. I'd also ask the previous landlord for reference.
There are range of stories out there... So yes, be careful of "sampling error."
Is your rental market not doing well? I would think there are plenty of applicants, granted not always great applicants... No other bites?
Im sure I could find other bites if I waited a bit. But I have found going into winter is a harder time to find tenants. Its an interesting micro market. Im on the lake so you can get a premium for people that want lakefront but the town is a B ish neighborhood. I have found its best to rent to people who know the town and what to expect. Their are A neighborhoods in the towns just east and Ive had trouble with A class tenants from over their. Besides the Credit she seems great and I wouldn't have any Vacancies.
@Bruce Woodruff exactly. When I started I took greater risks, some worked out and some didn’t.
@Brent Rieman well you know your market best…. As mentioned, while it’s better to be rented than vacant, it’s still actually better to be vacant than have a bad tenant. Costs less to be vacant and less headache/agita than dealing with a bad tenant.
That being said, there are tons of people with crappy credit out there but still pay. It’s a whole different “world” with those that are effectively disenfranchised because their credit score/history is poor. If that is your clientele pool, then credit score itself is not very useful. Good luck
Someone else here said this, but I think the WHY of the credit report is important, I would look very closely at it. I don't think credit scores are a perfect marker of a good tenant and the reason for lower scores makes a big difference. that being said I wonder how she got that low.
Can you speak with more references?
Charge a much larger deposit and future rent? ( not sure of legality in your state)
Some people do go and check out tenants' previous homes and how they are taking care of them.... ( again not sure what is allowed with this)
Basically, I would do some extra extra extra vetting and protect myself but I have seen 800 credit scores trash a place and or call the landlord to change a lightbulb they can reach soo........
@Tricia O'Brien brings up a great point. There are 3 marjor credit reporting agencies, Trans Union, TRW, & Equifax. They might not contain the same information.
I agree with the people on here recommending that you dig into the WHY their credit scores are so low. 480 is very low by the way....does your credit reporting tool not allow you to see their creditors, collections, etc.? I struggle with renting to someone with less than 600, but sometimes there are reasonable explanations.
Side note: applicants will LIE! I just had one woman wanting to move in to my place, 'because she had sold her house and needed to be out by X date, and needed an interim place for 6 mo - year while they looked for their next home.' Sounded reasonable...but pulled her credit through zillow and she had like a 520 score...I could see that it was a result of not making her mortgage payments on time....weird....so I called her and asked her what the deal was: 'oh that mortgage company screwed me over - I set my account to make 2 monthly pmts and apparently wasn't making the full payment on-time and no one ever told me...'
Well that sounded somewhat reasonable, I guess...but I decided to look up her address on the county tax assessor's site, just to verify that she had actually sold her home, and lo and behold, Sherriff Sale...she had defaulted on her mortgage and been forced out. not easy to do by the way...
Looking for advice on a potential tenant. Ran application through rentredi. No criminal or evictions. Has been in same rental for 9 years. Moving b/c landlord is selling duplex and she has always wanted to live in my property. She has emailed me about once a year asking if I have openings. Im lakefront on lake erie and she lived across road. Solid income at 4x rent at a good hospital job. But her credit is bad, 480s bad. Looks like a bunch of small balance credit cards and such. She gave me her current landlords info and permission to contact. If all checks out with him im leaning towards a yes. Should I reconsider?
Hard no. There has never been a situation in the history of earth where a landlord loosened their criteria for a tenant and it worked out. You have your criteria for a reason, right? You are asking the question because you are starting to feel the pain of vacancy...I can guarantee you that the pain of a crappy tenant is 10x worse. In addition, when you alter your criteria along the way, you open yourself up to fair housing violations- those are not fun.
Stay strong, wait for the right application.
I hear you and I appreciate the feedback, What does everyone use for Criteria? I just evaluate each one as they apply. I have never set a hard line on anything. I did make this mistake of "feeling the vacancy" once before and deff learned my lesson. I lost 4k on that nightmare by the time it was over. That is not the case now. I put this question out here as I actually think she would work out great. works for a major healthcare system in a white-collar job with 100k+ income 4x rent, she side hustles cleaning AirBnBs in the area. Solid rental history 9 years with positive review of previous landlord. She is familiar with the neighborhood and has been contacting me for several years asking if I had vacancies. Seemed very well put together when I showed it to her. No evictions, no criminals. Seemed like a slam dunk and I was ready to send her a lease until I got the credit report back.
You've been burned before, so you get it. However, you ran the credit report- why bother if you aren't going to use that info? We don't rent to anyone under 650, no felons, no evictions and must make 2.5x the rent.
I'd reccomend you follow the HUD best practices for tenant screening, it'll make life much easier.
I agree with the people on here recommending that you dig into the WHY their credit scores are so low. 480 is very low by the way....does your credit reporting tool not allow you to see their creditors, collections, etc.? I struggle with renting to someone with less than 600, but sometimes there are reasonable explanations.
Side note: applicants will LIE! I just had one woman wanting to move in to my place, 'because she had sold her house and needed to be out by X date, and needed an interim place for 6 mo - year while they looked for their next home.' Sounded reasonable...but pulled her credit through zillow and she had like a 520 score...I could see that it was a result of not making her mortgage payments on time....weird....so I called her and asked her what the deal was: 'oh that mortgage company screwed me over - I set my account to make 2 monthly pmts and apparently wasn't making the full payment on-time and no one ever told me...'
Well that sounded somewhat reasonable, I guess...but I decided to look up her address on the county tax assessor's site, just to verify that she had actually sold her home, and lo and behold, Sherriff Sale...she had defaulted on her mortgage and been forced out. not easy to do by the way...
@Reid Chauvin Yes, just about anytime they "blame" an institution for screwing them over it tends to be a red flag to me... Yes, I know there institutions that have done bad/illegal actions, but its not everyday...
Thanks for all the advice from everyone. Talked to the current landlord who seemed sincere and and had good things to say. He is selling the place and admitted to falling behind on maintenance do to health. Might be a good opportunity to buy a Duplex.
I did get a decent explanation for the credit from prospective tenant.
If I decide to proceed I'm thinking, higher deposit and offer a 6 month lease with the assumption that ill offer another if all payments are on time.
Thanks for all the advice from everyone. Talked to the current landlord who seemed sincere and and had good things to say. He is selling the place and admitted to falling behind on maintenance do to health. Might be a good opportunity to buy a Duplex.
I did get a decent explanation for the credit from prospective tenant.
If I decide to proceed I'm thinking, higher deposit and offer a 6 month lease with the assumption that ill offer another if all payments are on time.
Ok, that's fine. But did you ask the tenant what the reason was for the horrible score? I would before you proceed. She knows.....
Ask her to payoff those credit card balances? Whatever the circumstances doesn't matter she should pay them off or have someone negotiate them down make payment arrangements. Having a 480 and have showed good faith of paying off collection accounts goes a long way. Maybe 18 years ago I may have accepted and I did but never again. No good deed goes unpunished.