All Forum Posts by: CJ B.

Any thoughts on prepay tenants?

My leases require 660 credit score or better. 

Potential applicant is going through a divorce, which she claims ruined her credit. 

However, applicant has offered to prepay for the entirety of the lease.  For employment, they only make $19 an hour, and I've yet to run background check. Rent is $1500/mo.

Admittedly, it sounds enticing, but I want to make sure I'm not missing any red flags. Thanks BP community! 

Hello, 

Would like to know how others handle this situation— 4 year tenant, has paid rent on time, suddenly requests an early vacate. It’s December, lease is up in May. They tell me theywon’t be able to pay as he was in a car accident and needs to vacate to live with a relative.
 Very difficult to rent in winter months . It’s out of state.

What is the optimal strategy for this situation?

I do have an early termination clause in the lease. But how does one enforce this, if at all? 

Thanks!

Greetings BP'ers. 

I'd like to get some opinions on this, to see what other landlords might do in this situation/current environment etc. 

I have a:

Self-managed, out-of-state, fully paid off rental. 

Area Market Rents Avg. $1200 / mo. for similar units.

Tenant's current is $950/mo. (Market was $925 when they moved in). 

 Been in place for 3 years. 

Never late on rent, fairly low maintenance. 

Yes, I could raise rent to market. But, at what cost?  

1. Tenant's job/wage hasn't changed as far as I know.
2. Aftershocks of pandemic still linger in this area
3. Turnover out-of pocket costs 3-5K  while it sits vacant (fortunately never sits long +next to some desirable amenities.
4. Take time to advertise / arrange showings / find qualified tenants. 
5. I'm out of state / self-managed with one contractor to look over things when needed (who is quite in demand). 

What things do you consider when raising rent? 

What would you do in my shoes---Raise to market & take a chance of late rent, missed payments, move out? 

or renew lease with no changes? 

Looking forward to your responses!  

THANKS!!!! 

Hey BP-

Can anyone shed some light on the best way to structure JV deals for flips on residential. Potential partner is well established and seasoned- with an immaculate record, has own construction crew/manager and has done hundreds of residential/commercial and development transactions of all kinds. What's fair, what's typical? And how is the smartest way to go about it in a way that is beneficial for tax purposes? How do YOU do it? Any insight would be appreciated. thanks!!!

Hey BP-

Can anyone shed some light on the best way to structure JV deals for flips on residential. Potential partner is well established and seasoned- with an immaculate record, has own construction crew/manager and has done hundreds of residential/commercial and development transactions of all kinds. What's fair, what's typical? And how is the smartest way to go about it in a way that is beneficial for tax purposes? How do YOU do it? Any insight would be appreciated. thanks!!!

@Anthony Gayden Thanks. That very well may be the case. These applicants are young and it's possible that credit history is lacking with one. Would be nice to reach someone to find out for sure if that is really the issue. Would like to either rent or move on to the next applicant. 

I've been using this screening service for years without issue.

However, it appears things have changed. 

I have an application I'm screening which also has a co-applicant. 

The co-applicants screening came back within 15 minutes as perfect. 

The applicant, however, is being held up by a "pending identity verification" alert, and as of this post, it has been two days...and no change, no report.

I've spoken with the applicant, he did everything required by transunion, and paid the fee.

I've tried to reach a "customer service agent" to speak to someone, and on two different occasions, i've been on hold for two hours each time, and I've had to abandon the calls and throw in the towel. 

These potential tenants check out in ALL other areas, as I've already called references, current employment and have done due diligence on both applicants. I feel they would be great, but I need to have this done to complete my rental requirements. 

This is literally the only thing holding up lease signing. 

Pretty sure, it's time to find a new screening service. 

Anyone else experience this issue? 

Hey BP

Playing "devils advocate" here and looking to get some thoughts/opinions from the BP hive. 

      So, my current prequalifying factors:(B grade unit/area) are as follows:

*First/Last month rent + $500 deposit (refundable).

*1 small dog/no cats or other pets.

*$25 mo pet fee/$200 (non-refundable) cleaning fee

*Tenant cares for yard (Lawnmower provided).

*current verifiable employment.

*approx 2-3 x more than monthly rent.

*No evictions ever.

*no criminal record. Background, credit, eviction checks. 

*No smoking

*Verifiable good references.

Before even showing, I make sure interested parties can meet these pre-qualifiers. 

I usually attract, a "higher" maintenance tenant (which I'm ok with, because they care about the maintenance of the property) with an average of about a 2 year stay. I've had no problems with rent being paid, ever....Not even a late payment. BUT....

The question:  With the above pre qualifiers, yes, perhaps I may be mitigating risk, but aren't you also potentially asking for a higher/quicker turnover? For example, most people with these qualifications, could easily buy a house, and likely will do that. Would it make more sense to lower prequalifying factors and attract a demographic who would stay in your rental for the long haul? 

Curious what everyone does. How do you approach your rental criteria? Is my criteria too strict- particularly in these crazy times?  Is it better to attract tenants who want/need to stay longer? Maybe I should change my approach. 

What do you think? 

Thank you all for your responses. Great suggestions. 

I've been a landlord for a long time but this case is a new frontier scenario for me, which has made me reevaluate my screening process even further. What a lesson!  Grateful their reference disclosed their reason for moving, because this issue wasn't even in my thought process. 

That being said, any suggestions on the best legal way to deny someone based on this particular scenario? I just want to make sure I'm playing by the book here. Thanks!!!

Hey BP

Had an applicant apply for my unit. 

Upon checking with the tenants references, their current landlord disclosed they are moving due to a bedbug/roach infestation. Without giving specifics to the applicant, I had asked about any "infestations" and they disclosed it. They mentioned they had "gotten rid of all possessions, except for some essentials", and that "pest control said if they treated and moved on the same day", they would be gone. 

 How can I be assured they won't introduce them to my property? 

I pose this question on here, because otherwise, they check out fine and have passed other qualifications. However, I definitely want to err on the side of caution. 

What to do? 

Thanks guys!