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Tenant Credit Score is Easily the Best Indicator of Tenant Quality: Here’s Why

credit-40671_1280-PDI know many landlords, and despite my success at screening and selecting tenants, they often think somehow their property is different from mine. They do not think they can use the tenant credit score as a reliable indicator. They are ignoring tenant credit score to their own peril.

The fact is, tenant credit score is the most reliable indicator of tenant success that there is, bar none. You need to make sure that the tenant can afford the unit with an income of 3.5x the rent, but the tenant credit score will weed out the people that have behavioral issues and have no problem cheating anyone that they owe money to.

If you are a landlord, you know you need to do a background check. A critical piece is getting a credit report, complete with a credit score. The credit score is a summation of everything that goes on a credit report. It is calculated the same every time, with no bias to any discriminatory practices. It is colorblind and not subject to any fair housing issues.

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What do you think of using tenant credit score to predict tenant payments and behaviors?

 

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Best Home Improvements to Increase the Value of Your Home

It’s the question that nearly every landlord wants the answer to: What are the best home improvements to make that increase the value of my home?

Ultimately, you aren’t just embarking on your improvement project to increase your standard of living, you’d hope that there would be some return on your investment as well in terms of an appreciation in the value of your home.

Unfortunately, the question of which are the best home improvements is one where there is no one size fits all answer, and it would be foolish for us to assume that. It will depend on many factors such as the location of your home, preferences of the local market, the state of the economy, interest rates, and you could probably come up with a list the size of the Empire State Building listing numerous other examples!

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Month to Month vs Annual Lease: Which Protects Landlords?

hand-376212_1280-PDWhat are the advantages of a Month to Month vs Annual Lease?

When renting out property, many landlords want to lock in a new tenant as soon as possible, and they want to lock them in for as long as possible. It makes sense — until you begin to look at all of the commitments that you are making and how little of a commitment the tenant is making.

As soon as you know you are going to have a vacancy, you want to begin marketing. If your existing tenant is a slob, a hoarder, or being evicted, it is extremely difficult to attempt any turnover until you have a vacant unit. With a long term tenant, you just need to factor in a bit of vacancy time to clean up and repair, as well as some down time until you find a tenant.

Worst case, it was a one year (or less) tenant and you have to wait for the tenant to move out to show it, you can look in the mirror for your issue. You should have bypassed this tenant.

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October – November 2014 Rental Cash Flow

cash flowThe rent collections were stellar as always, and the rental cash flow is solid.  All 24 of 24 rents were in the bank by 11/3, which was the first Monday in November.  If you look back at my previous reports, you will see this is typical for me.  I can attribute it to having the ability to screen tenants and use credit score to my advantage.  I have solid units, and they are priced right.  Landlords that do not use credit score as a screening tool, and do not understand the significance of it, are fooling themselves.  They are either working too hard, or not making as money.

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