Should You Allow a Co-signer for a Tenant?
Risky tenants need co-signers. You are considering whether or not to allow a co-signer for a tenant. Should you?
Is the tenant a marginal tenant in terms of income, credit score or rental history? Or criminal record? Generally, a lower income person might want or need a co-signer to prove that they can pay. I understand the tenant needs help, but are you willing to take the risk? If the tenant is too high of a risk by themselves, can you mitigate the risk with a co-signer?
Here are a few of my thoughts on allowing a co-signer for a tenant.
Continue reading “Should I Allow a Co-signer for a Tenant?”
Are you capitalized enough to be a landlord? Can you really afford the true cost of a bad tenant?
Far too many ‘investors’ neglect one of the main things that will put them out of business. Their customers. Like it or not, no matter how genuine a tenant sounds in the showing, when they are behind on their rent, they can be as mean as a snake.
I see it all the time: A prospective landlord looks at the numbers and says, “Rent will be $1,000 a month. My payments will only be $800; I can pocket the rest.”
If you are any type of investor, at least one who reads here, you know that this is a losing proposition. There is $200 worth of cash flow — before expenses. After expenses of 50%, there is a negative cash flow of $300. And they are even managing the property for free.
But to the naïve investor, on the surface it looks OK: $200 a month in your pocket. And that is if you get a renter, if you get a renter who pays, if you get a renter who doesn’t damage the place, and if you do not have any vacancy.
The Start of Trouble and The Cost of a Bad Tenant
Read More Here
Over the years, I have made many mistakes on tenant selection and have had the privilege of accumulating landlording stories. There is always value to a landlord education, even if provided by a tenant, and in the real estate game, the education can be very pricy. Almost all landlords have made similar mistakes, and it costs them dearly. Only the well capitalized or lucky landlords live to try it again.
One of my first rental investments was a couple of duplexes. I had one all cleaned up and ready to rent. Since I knew Section 8 was a guaranteed way to get rent, I figured “How can a landlord go wrong with that?” After all, most people are decent people and want to respect the property and the landlord. I quickly learned the hard way that tenants are not always that way.
Read More Here. I have listed the landlording stories and lessons to be remembered.
Do you have any interesting landlording stories? Or even a good renter story?
My first two posts on tenant screening dealt with the most important aspects of tenant screening, credit and income verification.
In my third post on tenant screening, I discussed, with quite a bit of controversy, the downfalls of past landlord checks. The fourth and final pillar in tenant screening is the Criminal Background Check.
Continue reading “Landlords! Here Is How You Do Criminal Background Checks (The RIGHT Way)”
When you rent to family members, you have a unique set of circumstances. Not only do you have a solid and customer, you also have a customer that might take advantage of you. This post will help you understand the nuances of renting to family members. Whether it is moving a person back into the childhood room, or renting your investment property to them, the same criteria apply.
Continue reading “Renting to Family Members and Friends”
Remember, landlording is a game of probabilities and statistics. By targeting your market, you can maximize profits, that is simple Marketing 101. If you want to maximize your income, targeting your market is key.
There are good tenants in every category, but you are looking for the highest probability of success, not the needle in a haystack. Success is defined a tenant that pays rent, leaves the unit in good order, and you make money. Continue reading “Targeting Your Market to Maximize Income”
I have already written about the two most important facets of Tenant Screening, credit score, and income:
You will never get paid if you do not have tenants that make enough money. You will be continually chasing rents, and other issues, if your tenants have low, or non-existent, credit scores.
This article will focus on the third pillar of tenant screening, past landlord checks.
Continue reading “Fail-Proof Your Tenant Screening With Prior Landlord Checks”
There are four pillars to tenant screening, including:
- Credit score
- Rental History
- Criminal background
All four are important, but credit score and income are the main ones.
Those two are the easiest to uncover and verify. They are also the most objective rather than subjective.
Continue reading “The Four Pillars Of Tenant Screening”
In March of 2012, I was advertising for a vacancy that I had coming up. I had recently removed tenants that were from a different renter horror story. I wanted to find great tenants, as I already had the previous two sets of tenant in this unit go bad. Little did I know what the next horror story I was about to have… Continue reading “Renter Horror Story – Bernard the Strangler “
Have you ever wondered how how effective tenant screening can lead to higher profitability? This is my first post as an author at BiggerPockets.com and will explain effective tenant screening.
I have 24 renters, in two duplexes and five 4-plexes. I also screen for a large (120 unit) apartment complex, and approve or reject tenants. I make the call as to when a tenant is no longer an asset to our HOA community, and force other landlords to get rid of their tenants.
Through these experiences, I have seen many tenants’ backgrounds, and see how a background report can predict future tenant behaviors.
The following post contains a few random thoughts; I will focus in more detail on tenant screening topics in future articles. Be sure to follow my articles to get solid, no nonsense information on getting and keeping great tenants.
Continue reading “How Effective Tenant Screening Can Lead to Higher Profitability”