All Forum Posts by: Sam Schlacter

So as some of you who may have seen my posts would know..its about a month since I bought my first rental property. The property is awesome, in a great area. Even though I couldn't rent it out in my first month I am actually excited with everything I am learning about figuring out correct rental price, marketing, leases, rental applications, screenings and just in general everything about being a landlord (though I am not yet one!). Fortunately I am going to be able to support myself even if I couldn't rent the property right away.

One thing I clearly underestimated though was the quality of tenants. I assumed that there are very few who has credit issues. How wrong I was!!!! Even though my house is in one of the very good neighborhood with tons of professionals around, somehow almost every applicant I got has issues that I am uncomfortable with. I had to already reject 2 applications due to really bad collection issues that they didn't tell me upfront during our conversation.

Now I have two more people who are willing to rent it right away and I am again confused. Need some help from you guys to suggest if I should reject or consider them?

1.) The first lady came with couple of kids. Appeared very friendly and very nice. Asked right type of questions. She said her husband mostly is out of town as he works in Atlanta. His salary 5k+/mnth, her salary zero. Then she filled two application forms one for her and one for him. She signed his form as co-applicant and gave me application fees for both. After she left, I glanced over the forms and saw that she did not put in her SSN or Drivers Licence info. So I called her back to see if she mistakenly forgot this information. She told me that her immigration papers are in process so she doesn't have SSN yet. What should I make of this? I have known many people who are waiting for immigration and in some cases they would not be able to get SSN in certain visa categories. But she left Drivers Licence field blank too. What should i do now? Can I go ahead based on her husband's info and get his screening done and rent them if he is all clear? As per fair housing act I am not supposed to ask someone's immigration status but if I allow her in and if she happen to be not legal immigrant, would I get into trouble? What would you do?

2.) The other girl came with her kid and said she wants for herself only. She said she lives with her family right now as she just went through divorce. I sent her the application but she never filled it. Then few days later her husband called ( I didn't know he was her husband). He said he is very interested and want to put in the application for him and wife and said his wife has already seen the house. I asked him to give me email ids so I can send them the application link. So his wife turns out to be this girl whom I sent application earlier, who said she is divorced and looking to stay alone. I asked him about this and he said not sure you must have heard something wrong. Now what do I do? Would you rent them if their background/credit checks come out good? Or would you close doors on them?

I do not mind waiting for as long as required to find the right tenant. But having said that I want to make sure I don't panic at smaller issues. So your opinion will matter a lot to me here :-) .

Sam

Steven Hamilton II - You can find "at least $100" mistake in my tax return? Really? Please do not reduce the quality of this discussion by such juvenile personal attacks. You can loath as much as you want but please don't get personal.

I have various forms of investments and I use the tax software. I don't use Turbo Tax but even cheaper Tax Act ($10)!!! I would definitely say that having someone do your taxes saves you lot of time. However, when it comes to actual money, my experience says that these days the softwares like turbotax or taxact saves you as much as a accountant would. However, there is one catch. For many tax items, the entry is not very straight forward and needs your best judgement. An experienced accountant would be able to figure this out in no time versus you doing it yourself. If these kind of efforts and going through every single questionnaire items in a software is too much of effort or time then accountant is definitely a good option. But if you actually are curios about learning about the deduction and enjoy the process itself than these softares are lot of fun and saves about the same amount of money.

Having said that, I can clearly see why someone with a very large and may be complex investment portfolio would want to avoid that headache and give it to a professional. But for someone like me, who has something in everything but does not compare to a large company, works just fine with the $10 taxact software. It is actually learning experience for me to keep in mind for my next year's tax strategy as well.

I have finally decided to decline the rental application based on the recommendation by mysmartmove.com and what I found in credit report (collections, delinquent accounts, address on credit file does not match what was entered by applicant etc). I read that as per the fair credit report act, I have to mention the reason for denial and also must mention that they have option to access their credit report for 30 days?

Has anyone done this through mysmartmove.com? Do I just mention in the denial reply that it is denied due to bad credit? Or do I have to mention specifically as due to collection records/address mismatch/delinquent accts on the credit file? And also, do I have to specifically mention that they have 30 days to access their credit report free? In that event does mysmartmove.cm gives access to them?

Good points by all of you. Her fiancé has already put in the application but there is some glitch in smartmove service as it would not show me his credit screening even though he has put in all the info. TransUnion folks have recognized some issue and are fixing it in 48 hrs (they said) so I guess I should find out about her fiancé’s credit screening soon. Based on all your opinion, I am probably not going to consider if he has "issues" in the credit report. I was fine with her being student living with her fiancé who would be responsible for paying as I have seen many couples where one doesn't work and has no income while the other takes responsiblity. But what made me very uncomfortable is that almost all collection items reported are opened within last 6 months.

I got a tenant application today where the girl came to see the property and is interested to rent it. Her fiancé is right now out of town and could be back after about 20 days she said. She is supposed to be student. They asked for application which I sent and both filled it. She shows no income due to being "student" and her fiancé put down income of 75k/yr though I got the screening result for her but don't yet have access to his fiancé’s credit due to technical glitch in the screening service (smartmove) that they are fixing right now.

With that said, how can I make sure that she is indeed a student? (Credit report shows some debt as USDOE/GLELSI Employment but I don't know if it is student loan or what). Also, the scary part is that she has collection of almost 6k pending from collection agencies! (and about 7k debt). Should this be a HUGE red flag for me? I am still awaiting to access her fiancé’s credit screening result but if his income is as he claims it is and his credit is OK, should I ignore collection on the girl's account considering she is saying she has no income and he is gong to pay the rent? Or should I consider refusing her application based on these flags?

Please suggest based on your past experiences! :-) Also, if I am to refuse her, do I have to specify reason for refusal?

Wow, I learned so much about section 8 tenants from this thread. Thank you all!

David Krulac - Thank you for sending the link for S-8 rents. The steps you suggested also makes a lot of sense.

Thank you all again. After all your thoughts and suggestions, I feel a lot more comfortable and equipped with knowledge about section 8 tenants.

So, this is what I am planning to do -

1.) Have the prospective tenant fill the application form and perform screening.
2.) Meanwhile contact her case supervisor and inquire about if they have rent ceiling already established on this address and also understand how long inspection will take and when apx would I expect to get paid. If all sounds good move to next step.
3) if credit history and background check all come good, accept the application.
4.) Collect security deposit from tenant and have her sign the lease even if her move-in date is about 30 days out. ( I am assuming I can't collect first month rent as state may not be able to pay prior to inspection. Is that right?)
5.) Once tenant moves in wait for the first rent payment to be done in a month or 2 out (including the tenant portion?)

Am I doing this right?

Thank you all for reply. I don't mind if tenant is section 8 if I could get my rent on time and tenant is not "trouble" tenant. Some more follow up questions (I am still learning) -

1.) One of the consideration for me in screening is that yearly income of the tenant should be at least 30 times monthly rent. Now I am assuming the section 8 tenant would most likely not have it based on the rent this property needs. So, can I still decline a section 8 tenant application based on the yearly income? I probably wouldn't look into this number for section 8 but just want to know if I do consider this in my rejection, would I be breaking any law?
2.) Can I deny section 8 tenant based on the credit score/history/salary history?
3.) Who do I do lease with? Do I do lease with the tenant or with the HA office? Do I still execute the same lease I use with other tenants or do I have to prepare a "special" lease in case of section 8 tenant?
4.) I read somewhere that section 8 rent is supposed to be all-inclusive including utility etc. My normal rental includes utility anyways. But how about electric? Do I have to include electric also in it?
4.) The prospective tenants says her current lease expires in a month from now. If she is interested and passes the application, do I ask her to sign the lease now and pay first month rent and security deposit upfront? She said that she would be sending the rental info for approval. So if HA has to approve it, do I wait on getting her to sign the lease until they approve or does it happen after she signs the lease? In that case I am confused as how do I deal with first month rent and security deposit?

Tons of questions above but please help! :-)

Does anyone have experience with renting to section 8 tenant? Is it advisable to rent to section 8 tenant? Specifically does anyone have experience with section 8 tenants in Florida?