All Forum Posts by: Diane Chapman

I am currently renting my first rental property.  It is a 2/1 duplex in a class C neighborhood with one inherited, paying, tenant, and one vacant unit which I'm currently marketing at market rent.  This is an average condition house for the neighborhood and area.

I have set my screening requirements as:

600-650+ credit score
3 times monthly rent
No evictions, violent, or sex crimes
6+ months of job history
Some form rental references.

I have an applicant who meets all requirements except I am unsure if he will have rental references because he told me he's couch surfing right now.  He also told me that he spent the last 10-15 years off and on homeless and was a drug user who's been clean for the past 4 years.  He says he'll be living in the house alone, but his kid may join him at some point during the lease (he's trying to regain custody).  He also has no driver's license, but he does have an out of state ID.

I get a bad feeling that this could turn out bad for me and feel I can decline him legally based on him not having rental references, but on the other hand I think that maybe I could either offer him a month-to-month lease with a guarantee I don't raise rent for 12 months, or require a double deposit.  I haven't gotten any qualified applicants in the two weeks I've had this house on market.

Curious what some more experienced landlords think.  This is my first time marketing a property so I am learning a lot.

@Erik Dofelmier people do strange things, so don't fret.

What LIVE feedback are you getting during showings?

Be sure to ask open-ended questions to avoid worthless words. Be sure to employ pattern-interruption also.

Hey Matthew.  Not sure what your local state, county, and municipality laws are, but the first step is to see if you're even allowed to reject based upon the applicants voucher.  The Fair Housing Act doesn't bar landlords from discriminating based on Section 8, but some states and municipalities do!  Classified under "source of income".  I find state by state information here on https://www.hud.gov/states to be a great place to keep up on all that.  Here in Maryland, after more than 20 years of failure, lawmakers made it illegal in 2020.  It is illegal in DC as well.  This doesn't mean you cant reject an applicant for other reasons you typically would such as income, poor credit, or criminal background.  Just always be consistent with everyone you speak to and every applicant!

All that said, and to answer your question, I think a guaranteed check for 66% of the rent offers some peace of mind and limits potential loss.  A conventional income applicant, so to speak, could lose their job and pay you nothing.  And as others said, section 8 tenants are often the most quiet and reliable because they don't want to lose this aid and they are grateful to have housing.  I would screen as you always do and if everything else is clear, take the tenant!  I think the risk is exactly the same as all tenants.  Maybe even less for reasons I just touched on.

I'll spare some of the moral and ethical opinions on this, but I do feel we as real estate professionals, investors, and landlords also have an obligation to help provide housing to everyone.  Even the less fortunate.  Housing costs and rents are through the roof while incomes have mostly remained stagnant. There are going to be more and more people using vouchers as time goes on and we certainly shouldn't stigmatize them or view them as more risky.  

Good luck and I hope everything works out.  Please do report back to the post.  Would love to klnow how it turns out!

Ahh that’s incredibly unfortunate. Agreed, read the contract and understand what’s covered. If there wasn’t damage coverage by the state, I would be much more hesitant.