All Forum Posts by: David McCracken

@Thomas S. I've been telling every applicant exactly why they were rejected. The following quote was pulled from the Tenant Screening Guide hear at BiggerPockets:

"If you decide to deny an applicant, it is vital that you document your reasons why so there can be no question as to whether or not there was discrimination involved. By having carefully defined standards (see above) you have the ability to easily deny a tenant that does not meet your standards."

"When you do disqualify an individual, I always send a letter to them stating exactly why they were dismissed. This can be as simple as a form letter which you check a box stating why they weren’t approved."

Please let me know your thoughts!

@Ihe O. thank you for your input that was very helpful.

I almost called the prospective applicant to hear how he would justify his past financial mistakes. I'm glad I didn't, as I'm sure he would have feebly blamed the credit industry for their "rigged system" just like you have in your post.

This is a great lesson because applicants and tenants alike will attempt to emotionally appeal to the landlord to rationalize a red flag on an application or a late rent payment. It's important to stick to your system you have in place and not give an inch, or you risk putting your entire business in jeopardy.

Thank you for reaffirming this lesson. I denied the applicant in question, and I would deny your application as well. It's nothing personal, it's just business.

Thank you @Mindy Jensen and @Richard Capers Jr for your input. I just sent the applicant an email informing him that I wouldn't be further processing his application based on his credit history.

I know the place will rent, I just stress a lot knowing each week that passes by I'm losing 100's of dollars. Everyone is absolutely right that losing a few hundred dollars is much preferred over being stuck with a bad tenant for a year. I put a lot of work into the flat, and I just need to relax knowing my hard work will pay off and everything will work out.

Thank you again to everyone who commented and helped me with my dilemma!

Thanks for the responses @Thomas S.. I was just very confused how someone who is so reckless with their credit can land a respectable, high paying job. He also had several thousand dollars in credit card debt. I just don't get it.

I have an applicant interested in one of the flats in my duplex, who has a stable job as an engineer at a large company and makes over 70k a year. However his credit score is quite low (around 550), and it shows he has had two accounts that have gone to collection. He also has no prior landlords since he's lived at home while he went to school. I haven't had a huge amount of interest in this flat, and I want to get someone in as soon as I can. What should I do?

@Chad McClain thanks for the response. What I think I'm going to is attach this addendum I found online that specifies I'll be sub-metering the two units using option (b) formula based allocation:

"If a Utility Bill is sent, each Utility Bill shall be based on either (a) an estimated or actual reading of the sub meter for Resident’s Unit, OR (b) the previous month’s actual bills for the Utilities for the Property allocated to Resident pursuant to an allocation formula based, in whole or in part, upon at least one or more of the following components: the number of Units at the Property, the number of occupied Units at the Property, the square footage of the Unit, the number of occupants in the Unit, and the number of bathrooms in the Unit. Payment of the Utility Bill is due as noted in each Utility Bill. Unless otherwise provided, Resident agrees to pay the Utility Bill at the location identified on such Utility Bill."

I think this covers me legally, and that way I don't have to deal with a third party sub-metering company.

I currently own a duplex in SE Michigan, with a lower 2 bedroom flat and an upper 1 bedroom flat. There's only one gas meter. I've looked into splitting the ducting and plumbing for an additional furnace and hot water heater, but the estimates for that were far outside of my budget.

My two options are to either include the gas in the monthly rent by adjusting it accordingly, or to split the bill each month between the two tenants. I would prefer to split the bill each month between tenants, in order to hold them accountable for their gas usage. I would obviously be upfront about this and include an addendum to the lease regarding how gas would be billed. Can I write that addendum myself or should I seek legal counsel? Does anybody in Michigan have experience with this?

I currently own a duplex in SE Michigan, with a lower 2 bedroom flat and an upper 1 bedroom flat. There's only one gas meter. I've looked into splitting the ducting and plumbing for an additional furnace and hot water heater, but the estimates for that were far outside of my budget.

My two options are to either include the gas in the monthly rent by adjusting it accordingly, or to split the bill each month between the two tenants. I would prefer to split the bill each month between tenants, in order to hold them accountable for their gas usage. I would obviously be upfront about this and include an addendum to the lease regarding how gas would be billed. Can I write that addendum myself or should I seek legal counsel? Does anybody in Michigan have experience with this?