Advice for 1st time landlord evaluating applicant

Tenant Screening
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Advice for 1st time landlord evaluating applicant

Laura S.
Member since 2025 · 1 post · 0 votes

Hi everyone! I'm new to the community and just recieved my first application for our rental property in upstate ny! We're trying to best screen the applicants and my original standard was 3x monthly income and credit scores of 650+.

I recieved my first applicant which is a group of 3 (couple and their sister). Total annual income for all applicants meets the 3X requirement but the credit scores are 700, 595, and 545.

So far, we've followed up with the current landlord and they have stated that rent has been paid on time for the couple. The couple's current rent is similar to ours The sister is has no rental history due to a recent divorce.

We're torn given 2 out of the 3 people have lower credit scores and it's not a family moving in. How would you all think about this?

What other steps would you take to see if it makes sense to relax the rental criteria?

thanks!

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  • Rod HanksBusiness Member
    Insurance Agent · Dallas, TX · Member since 2013 · 743 posts · 462 votes
    1y

    Sounds like great tenants. Credit score shouldn't be the primary driver of tenant approval, because if they could qualify for a mortgage they probably wouldn't be renters. I weigh more on making 3x rent and having great rental history of on time payments with no evictions, no lease violations or violent criminal history. I use National Tenant Network to run a tenant score and recommendation.

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    1y
    Quote from @Laura S.:

    I have to disagree with Rod, sort of. 

    The credit score is the single best indicator of how one pays their financial obligations. A recent divorce could impact someone's credit score, but it shouldn't drive it from 700 to 545. Her credit is that low because she is financially irresponsible. I am also surprised that a couple could have credit scores 100 points apart. 

    The background check is supposed to identify the amount of risk, then you determine whether you can mitigate that risk or not. All things being equal, I would accept these applicants, but I would require them to pay a deposit equal to two months of rent.

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  • Andrea Russin
    Investor · Member since 2024 · 13 posts · 8 votes
    1y

    I would not rent to these three applicants. You have set your standards. If the property is in a location that would justify these standards, then wait.  You have just made it thru the slow season of every year. We are only a few days into the new year.  I know it seems difficult to turn down the potential income from this lease, but be patient, renting season is just around the corner. As soon as people receive their tax refund checks, they will be knocking down your door. Feel free to connect with me.

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  • Heath Sizick
    Rental Property Investor · Hampstead, NC · Member since 2024 · 107 posts · 54 votes
    1y

    These are difficult decisions. I can see why you are torn. I won't say one way or other what you should do. There is risk in both options & as an investor you need to weigh those risks & stand firm on whatever you decide. 

    However, a few things you could do: You could talk with them & learn more of their story to figure out why their credit score is low as well as the type of people they are. Are they good communicators? Are they professional in their interactions? These are good indicators of quality tenants.

    You can also adjust how much deposit you take as well. For the 700 credit score you could take 1 month's rent as a deposit but for the other 2 you could take 2 months (as an example) due to the risk factor. 

    My company accepted a tenant with a horrific credit score because we heard her story. She paid us up front for 12 months of rent & then paid herself each month & at the end of year 1 she paid us for another 12 months...she did this until her credit improved. 

    Good luck!
      

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  • Sofia Komrskova
    Real Estate Agent · Cleveland, OH · Member since 2025 · 60 posts · 54 votes
    1y

    If they don't meet your standards don't rent to them. All it takes is one non-payment or messy eviction to set you back months and even years in cash flow. It's better to wait for the right candidate. If you still feel like you want to do it at least go visit their current rental to see what it looks like. 

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