With about 30% of tenants being ones to avoid, it is better to exclude a few good ones, rather than take a chance. One bad tenant can kill years of rental profits. Here is a case of a tenant I recently avoided.
I have been advertising an upcoming vacancy for about a week. The place is paid for through October 31st, so I have about eight weeks to get it filled. Good tenants look six to eight weeks out, so I am right on schedule. It is a solid 3BR, 2BA apartment, with a garage and washer and dryer. The existing tenant keeps the place in good repair and it is clean. It is one of the easiest places I have to rent.
An abbreviated version of my standard response is this. “Thank you for inquiring. I will be looking for tenants with a 625+ credit score, and a solid household income of at least ~$45,000 per year. If you are marginal on both of these items, I will generally decline you. Your criminal and rental history must be clean. If you have had a foreclosure, I can work with you a bit on this.
I also have some particulars about the pet policy, and lots of details about the apartment.
Most of my ad responses are via email. Typically, there is a button on the page form on the places I advertise where the prospect can just fill in a few fields, push a button. I get an almost immediate email back. In this case, the tenant responded from a PostLets.com ad.
She inquires “Do u accept the housing choice voucher?”
I do not know at this time what type of housing voucher she is referring to. But I do know I do not take section 8, or will not tolerate any lease changes that some HUD programs mandate. Nor do I want to be short-changed rent due to the tenant causing damage that they cannot afford to pay.
Knowing that a program is just a program, and credit score is a terrific indicator of personal behavior, I needed to know more.
My reply was, “What is your credit score?”
I really did not know what to expect, but I assume it was lower. Working age tenants on social programs that pay rent have a tendency to be high-risk. It could have been 800+, as credit score is a perfect blind indicator. It does not take into account race, income, public assistance status, etc. It should pass any Fair Housing issues, and can be objectively compared against any criteria, by anyone, and come up with the same answer.
Her response. “Maybe 500. I have a clean background, and perfect rental history. I’m employed with 2 children ages 17 & 18. My son is a senior in hs and my daughter is a freshman at Century College also employed.”
She adds “I do owe $2,000 in student loans which affects my credit also”
Now, I know that having student loans does not negatively impact your credit score. Often, I have seen students with deferred student loans that have better credit because all the deferred student loan accounts are “as agreed upon”. The loan company said they do not have to pay anything (yet), so the student doesn’t. A great way to get a good credit score.
When you do not pay the student loans, it impacts your credit score. When a tenant does not pay a loan that never goes away, it is a problem. Even in bankruptcy, the student loan stays. The government will eventually garnish your social security if it is not paid. You cannot escape student loan debt. Yet, the prospect did not pay it.
Would they pay my rent if they got behind, if all I can get is a judgment?
I also know that only 2% of the population has a credit score less than 500. That means, 98% of the population has higher. This tenant is the bottom of the barrel in terms of credit score. A low credit score like this tells me that she lies and cheats all her other creditors, and will lie and cheat me.
No thank you.
I replied back, “500 is a bit low. Good luck in your search!”
This person might be the greatest person in the world, but I am unwilling to bet my retirement on it. Nor am I willing to subsidize her lifestyle any more than the government already subsidizes it. If she moves in and ruins the place, I have to pay. If she skips her rent portion, I lose. If she causes headaches, I get more stress that I do not need. If she causes my other tenants to leave, I lose. I want to post solutions on this blog, not problems.
She replies “Thanks creep”
What an attitude! Imagine if I needed to evict. Or inquire about a pet that was not allowed. Or needed to have her pay for damages mid-lease. Or show the apartment after she (or I) gave notice to move. How would she react to a neighbor, in my multifamily housing situation, when there was an issue? Would her adult children, or friends or relatives, have any better attitudes?
No thank you. I can likely make more money and have less headaches being vacant.
What do you think of this type of attitude? Was I too ‘mean’? Would you have ever responded with that type of response?