All Forum Posts by: George Cen

Hi Mandy,

I would think about what offering them money accomplishes. Offering a few hundred dollars if they pass checkout inspection might incentive the couple to clean before move-out, but you can probably hire professional cleaners for less or do it yourself. If things are broken, the couple likely wouldn't be incentivized to fix them since that would cost them money, maybe similar or more than the amount you are offering.

Another issue could arise where they feel that they should pass inspection and get paid but you disagree. An argument could ensue where they feel you tricked them and didn't end up paying them for their effort.

I think you and your husband have gone overboard and been overly kind to them during this entire lease...saving them $300/month, forgoing late fees, no deposit, referring them to an agent. If they don't appreciate everything you've done to hand a clean property back to you, then I don't think a few hundred dollars will make a difference and could potentially cause further discord.

This thread is a gold mine with nearly 7.5 years of comments and advice. I read through each answer and found it extremely helpful. It did take a while to read all 145 posts so I figured I would write a cliff notes version. As I read through the comments, I paid attention to:

1) the frequency that a mistake was brought up and

2) the answers with a high number of upvotes.

I also grouped similar mistakes into the same category.

Here is what I found to be the most common "top mistakes" noted in this thread.

1. Not understanding finances / having unrealistic expectations about cash flow

- Overpaying for a property

- Setting rent improperly / not raising rent

- Underestimating operating expenses

- Inadequate cash reserves for big cash expenses i.e. a significant repair

- Not understanding the accounting side i.e. taxation, depreciation, equity, etc.

2. Poor tenant screening

- Improper screening process / criteria

- Accepting incomplete paperwork

- Not asking for proof and/or not verifying information on applications i.e calling references and obtaining tax returns, w2’s, bank statements

- Ignoring “gut feeling” and red flags on applicants

3. Not knowing how to manage tenants

- Not enforcing the terms of the lease

- Too trusting and lenient

- Not charging tenants for damage

- Not evicting fast enough

4. Not treating it a business

- Not having a business plan

- Not being professional – i.e. separate phone line, being dispassionate

- Co-mingling business and personal funds

5. Not knowing the laws in the state

- Laws vary by state; not reading up on or understanding own state’s laws.

6. Renting to friends and employees

- And losing relationships as a result.

7. Treat your rental like it’s “only a rental”

- Bare minimum effort

- Cutting corners on repairs and upkeep

- Cheap furniture and décor

- Leaving a weak flushing toilet (expect many plumbing issues)

8. Not making periodic inspections of the unit

- Being unaware of how tenants are treating the property and what maintenance is imminent

Well, to answer your question directly, the only way to guarantee rent payment is to have the renter prepay rent up to the maximum allowable time period and have the length of your lease be that exact length too. This won't work for every state since laws vary.

Agree with the full application for anyone over 18 living there.

To answer Michael's first question - you can do the in-person interview at the same time that these applicants visit and tour your rental unit. Applicants almost always want to see the unit in person before they sign.

@Kyle J.  I always appreciate comments and differing viewpoints because I am still developing that "system". Currently I think what I laid out may work nicely but there can be things I am missing or have not considered. Hence, I want to hear others do things. Thanks for taking the time to offer your perspective!

Hey @Kyle J., thanks for your comments. I'd like to offer my thoughts.

#1 and #2 - I wanted to clarify that there is no need to collect SSNs when you are reviewing applications. Once you decide on the applicant to continue on with, then you can get his/her SSN as part of the next step (i.e. lease). I don't believe there is a need to collect SSNs from applicants who you reject? I think this addresses your first 2 points.

#3 - I agree, you should the applicant's full report rather than a "recommendation", but you don't have to run it yourself to get a full report.

#4 - I think this depends on the market. In places where it is a renter market, tenants have more leverage and I've talked to landlords who have taken the cost because applicants wouldn't pay. Of course in a landlords' market like in Manhattan, this never is an issue as the applicant always pays.

#5 - The same hassle would apply as you would have to deal with the applicant's request and also dealing with your credit service provider to send the letter. Maybe this won't take much time for 1 applicant but what if you have 10, 20, etc.? If you can avoid this entirely, why not?

Hey, thanks for the replies everyone.

Yes, an electronic service is what I'm thinking of. It wouldn't be a renter or applicant handing over his/her credit report on paper. 

The way it works is a renter runs his own report first. When he needs to share a report with a landlord, a fresh report is pulled directly from the Credit Bureau and sent directly to the landlord. The renter never touches this and cannot forge it.

Regarding need data for going to court or collections, I think this is regarding obtaining the SSN? I believe a SSN is needed from your actual tenants but not applicants. You can get the SSN after you decide on a candidate, as part of the process of signing the lease, etc. Applicants that you reject, I don't think SSNs would be needed unless there is a reason I am not thinking of.

Hey, I'd like to get both landlords' and renters' thoughts on this. During the application process, I believe it is beneficial for both the landlord and the renter to have the renter be the one that runs his/her own report.

Any points you agree with? disagree?

Benefits for Landlords

1. No need to collect SSNs

A SSN is required to pull a credit report. By having the renter run his own report, this is no longer necessary.

1. No need to ensure appropriate safeguarding of SSN

Another benefit of not collecting a SSN is the landlord doesn’t have to worry about adhering to all of the varying and confusing state laws around protection of personal identifiable information (PII). The SSN will not appear on the credit report itself.

1. No need to use a third party credit reporting service

For most landlords, running a credit report is usually the only thing in the application process that they can’t do themselves. They are forced to use a third party which is expensive and time-consuming.

1. No need to argue over who pays

There is a cost to running credit reports and often landlords would collect a fee from applicants. Sometimes landlords absorb the cost themselves. By having renters run and pay for their own reports, there is no awkward discussions or negotiations on who should pay. We’ll explain how this actually saves money for the renter later on in this article.

1. No need to send the credit reports to applicants

If a landlord rejects an application based on the renter’s credit score, the renter has the right to see the report. Many renters will ask for the report anyway. It is time consuming to deal with mailing, faxing, and/or emailing to satisfy these requests, especially if there are 10 or 20 applications per listing.

Benefits for Renters

1. No need to share SSN with strangers

Most renters don’t personally know the landlords of rental listings they are applying to. Why trust strangers with your most private information?

1. No need to worry about hits to your credit score

When a renter pulls his/her own report, it is considered a “soft” inquiry which does not impact the renter’s credit score. This is the same as checking your own credit.

However, if a renter lets the landlord run the report, this will often register as a “hard” inquiry which decreases the renter’s credit score. The most common example is when the landlord sends the renter’s application information to a third party screening company who then pulls the credit data. This is considered a hard inquiry because the renter had no direct involvement in the request.

Many renters apply to multiple rental listings with different landlords. Multiple hard inquiries in a short time frame can significantly damage a credit score.

1. No need to worry about others making mistakes

Not all landlords know the correct procedure for pulling credit reports. There have been reports of landlords mistakenly requesting multiple inquiries on one renter. Again, this can severely decrease the renter’s credit score. Why take the risk?

1. No need to pay for the same credit report multiple times

Since many renters apply to multiple rental listings with different landlords, they often have to pay for the credit report again and again on each application. This can be very costly.

Sure, a renter could apply to one place first and after the landlord runs the report, request a copy of it. However, while waiting for the report (which the renter has no control over), the other apartments may be scooped up already.

A renter who runs his own report can pay once and immediately include it in as many applications as needed.

1. No need to be in the dark

By maintaining control of the credit report, a renter doesn’t have to take the risk of others making mistakes. In addition, credit data is not perfect and there may be inaccuracies on the report as well. If a renter is running his/her own report, the information can be reviewed right away. If there are mistakes on it, the renter can inform the credit bureaus immediately.

On the other hand, if the landlord runs and views the report first, the renter’s application may be rejected due to inaccurate or incomplete information, which is unfair to both parties. The renter can lose a dream apartment and the landlord can lose a great tenant.