Accept The First Applicant Who Qualifies or Wait for the "Perfect" Tenant?

Question

Hi BP, I am curious the process others use when screening potential tenants to fill a vacancy (with a standard 12 month lease). I own 4 buy and hold units and have a fixed standard I use that weeds out a lot of folks that don't qualify, i.e. 3x the rent in monthly income, no evictions, min. credit score, etc.

My question is, do you accept the first person who applies and meets your standards, or give it 5-7 days, let multiple people apply, and then take your pick of the best applicant?

To give a real world example: I have a couple that applied who qualify and are very interested. Their credit is okay (upper 600s with a few medical collections), and have enough income to qualify - although he is starting a new job soon so there is always a bit of uncertainty there. They also have a Great Dane, which makes me a bit nervous, just due to their enormous size. However, I feel as if I can't not accept them due to the dog, because the tenant in the other unit (this is a duplex) has a dog as well - not as big, but also not a "small" dog. About 24 hours after they applied, I talked to another lead who wants to apply, who has a 780+ credit score, is a nurse with more stable income, lives alone, and has no pets.

So, should I (or am I legally obligated to) accept the first applicants who applied and meet my minimum standards, are wait a week, get multiple applicants, and cherry pick the best one? I also don't want to lead people on and get their hopes up. This is people's home and livelihood, and it is not something that I take lightly, but also want to pick the best tenant possible that will pay and take care of my property. Any advice is appreciated. Thanks!

Richard F. · Answer

Aloha,

To avoid Fair Housing issues, it is best to accept the first Qualified Applicant, processing the Applicants in the order received. Otherwise you end up making decisions based on feelings or emotions...and end up choosing a Single person over a Couple which could be interpreted as a FH violation (especially when repeated over time).

Daren H. · Answer

When I sell a flip, I don't accept the first offer at listing price and terms. I want that offer or offers that are even better. You can do this without violating any laws. That sums up my philosophy on renter applicants.

Scott Trench · Answer

I agree - set strict criteria and accept the first qualified applicant. No reason to put yourself at risk. If your criteria are allowing tenants you are not comfortable with to qualify, then set stricter criteria. If your criteria were 700+, then this is a moot point. If your criteria were no pets, then this is a moot point.

It is perfectly reasonable to set a limit on dog size, if your local laws allow it. I personally have in the past charged more for large dogs than small dogs, and you can even make it fairly complex with small (under 25 lbs), medium (under 50 lbs) and large (up to 75 lbs), and excluded certain breeds.

Account Closed · Answer

I'd prefer the Rex. They are pretty cool. and it'll take care of the german shepherd problem.

Tim Miller · Answer

No you don't have to accept the first qualified application that come along. We tell everyone that applies that our processing time can be 1 to 5 business days. This gives us the room to look through all the application that come in and select the best.

The Great Dane doesn't bother me at all. I'd just charge a $400 non-refundable pet fee and $35 a month pet rent.

Just double check your state, county an local laws. As long as they don't require you to take the first qualified application, you're good to go.

JD Martin · Answer

We accept first qualified applicant but having a pet would automatically put them into the "maybe" pile and not automatically qualified. We accept pets on a case-by-case basis, which means if everything else isn't strong or the pet was something borderline unreasonable they would be rejected. For example, if the house was a postage stamp without a fenced yard we wouldn't accept a Great Dane in that house.

Scott Mac · Answer

If your three choices were this:

"Hi our names are Bob and Jenny Potential Renters, and we have a Grate Dane",

"Hi our name is Billy and Billie Potential Renters, and we have a Grizzly Bear",

"Hi our name is Homer and Marge Potential Renters, and we have a Tyrannosaurus Rex Dinosaur";

choosing would be much easier.

Are Grate Danes on your Insurance prohibited list?

Just my 2 cents.

JD Martin · Answer

First, how does the prospective tenant know that as far as the German Shepherd? Aside from that, the answer is pretty simple - have more stringent criteria. If you set the bar really high you can lower it if necessary. If you set the bar low and refuse someone anyone you leave yourself open to claims of discrimination. You can even do that with dogs (no dogs over 100 pounds or 80 pounds or 2 feet tall etc).

Jamie Jones · Answer

@JD Martin what if the tenant in the other unit (it's a duplex) has a German Shepherd? Feel like it's not a very good look for me to deny someone when they clearly know I've accepted others with big dogs.

Accept The First Applicant Who Qualifies or Wait for the "Perfect" Tenant?

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