If you have been a landlord for any period of time or even if you are just getting started, you may have already made your decision as to what does and doesn’t constitute a valid reason to deny a tenant’s application. But, are your rules cut and dried or is there a little bit of wiggle room built into your decision-making process.
It’s easy to decline every application based on a set of rules, and while this will most likely result in a string of good tenants, it may also cost you some of the best tenants you have ever had. Consider these thoughts:
Three Vital Things to Look At
- Verified Income– The applicant should be making at least 2 1/2 to 3 times the monthly rent. The idea behind this being that this should leave them with enough money to pay the rest of their bills. Be sure you contact the employer to verify employment and the amount of income claimed. It’s easy to lie or produce fake paystubs; one phone call can typically provide the proof needed.
- Record of Evictions– Most landlords don’t want to rent to anyone with an eviction in the past, for obvious reasons. Yet,have you stopped to consider why the person has that eviction on their record? Maybe it was a mistake, and a simple call to their previous landlord will clear it up. It is possible they moved out, but their landlord processed the eviction paperwork anyway (it happens more frequently than most people know). Take the time to talk to the applicant and find out what happened; it could make all the difference in the world in making your decision.
- Criminal History– The average landlord sees any applicant with a criminal background to be unacceptable. Yet, what if their criminal record is from decades ago or for something simple, you might want to reconsider based on the rest of their application. Of course, a major crime at any point is usually a deal breaker.
Two Less Critical Issues
- Credit Scores– Far too many Americans now suffer from poor credit scores, often through no fault of their own. In many cases, recent years of recession forced many into foreclosure, losing their credit cards, repossessions of things like cars and more. Just because a person has a less than perfect credit score is not a reason to deny their application. Here again, talking to the applicant may explain why their credit scores are low, making it possible for you to grab a great tenant that no one else is willing to rent to.
- Criminal History Revisited– Let’s take a closer look at criminal records. The best thing you can do is talk the person and have them explain what happened. You can also pull the court records for the case (they are a matter of public record). For example, Jack was arrested and convicted of marijuana possession 20 years ago. This conviction will show up on his records until the day he dies, but is this a good reason to deny his application? Think about all those you may have rented to in the past who did the same thing when they were young but never got caught?
Be willing to work with your applicants; youmay find that in doing so you open yourself up to a much broader range of tenants. Many of whom may prove to be the best tenants you’ve ever had. Food for thought, just be sure you do your “full” due diligence before declining or approving every applicant.