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BillHoo

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Posts: 29
Reply with quote  #1 
I have a 3BR 2.5 bath 1660 sq feet townhouse with off-street parking.

Tenant is looking for housing for 2 adult brothers, one adult sister, and their adult mother.  The sister has two children (approx. 4 and 5 y.o.)  One brother has a child approx. 4 y.0.

Total 7 people (4 adults, and 3 children)

All adults are working.  One is also working on a B.A. degree.  Together, their combined incomes could make the rent, but it would be a challenge.

Does NJ have a limit on max occupancy due to number of bedrooms?


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Bill_H
LLinVA

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Posts: 393
Reply with quote  #2 
Have you Googled "New Jersey maximum occupancy housing" or something along those lines? That should get you the answer (although you may have to sort through some unofficial articles to get to the actual law. 

In Virginia, that would be over occupancy unless at least one of those bedrooms is larger than average. The rule of thumb is two people per bedroom and a lot of states have issues with certain mixing (kids with adults, kids with non-relatives, kids of different genders, etc.). Some states vary occupancy based on the actual size of the bedroom.

To me, it sounds like people you don't want in your rental. That many people living together tells me none of them on their own have their act together and know how to be an adult yet. At best, something's going to come up and rent will be late sometimes and/or they trash the place. At worst, you'll never get the rent, they will destroy your property, and you will wish you never rented. Find someone more qualified.
BillHoo

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Posts: 29
Reply with quote  #3 
LLin VA - Thanks.  I did have to wade thru a ton of articles before I found actual legal code to reference.

The rooms I have are a good size and would meet NJ code for that many people and there are configuration challenges on who stays in which room (same sex adults vs. children).

For anyone else who needs the reference, I found it here:
https://www.state.nj.us/dca/divisions/codes/codreg/pdf_regs/njac_5_28.pdf

Also looking for anything specific for the municipality.

Outwardly they appear to be separate branches of one family with a convergence of bad luck; mistakes on property ownership, death of spouse and divorce... pooling resources to stay afloat

I can look at paycheck stubs, credit and even criminal background with the cash they gave me for the credit/background checks. 

Ultimately leaning toward rejecting due to elevated risk beyond my comfort zone. (is that a valid reason?)




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Bill_H
LLinVA

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Posts: 393
Reply with quote  #4 
I would pass on them, but the reason would be that I found a more qualified tenant. If they meet your basic screening requirements, then saying something like 'elevated risk' smells fishy. I would drag my feet with them and find a better tenant. 

All drama can be presented as being down on your luck. The problem is that bad luck seems to be extra-attracted to certain people who always have it, and then it's contagious to you. That shouldn't become your problem (and it will!). 
BillHoo

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Posts: 29
Reply with quote  #5 
I'm thinking about:
- Limiting the number of people allowed on the lease
- Specifically noting in the lease that the basement is not to be used as a sleeping area (NJ Ordinance restricts unfinished basements that are not sealed from damp to be used for sleeping area)
- Raising the security to max 1.5 x the monthly rent
- Raising the rent an additional $100 to cover fair wear and tear.
- Specifying end of lease agreement and a holdover rent of $1000 more than the original rent to discourage them staying beyond agreement if they don't work out.

Basically, they will have to bring $6K cash to the table on lease signing day.  If they still want to go ahead, I'll further vet them by spending their application fee on the usual credit and background checks to see if they pan out and then see where it goes from there.  May get a more qualified tenant in the meantime.






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Bill_H
LLinVA

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Posts: 393
Reply with quote  #6 
"on the usual credit and background checks to see if they pan out and then see where it goes from there" This should happen before anything else. You should never even consider offering a lease without first running background, eviction, and credit checks on all tenants over 18 years old. Charge them at least what you have to pay. Not doing this is begging for trouble. 

The other stuff sounds good, although I still wouldn't move forward with these people. I would also be careful about doing anything you don't plan to do with all applicants or tenants moving forward. Treating certain people differently is discrimination. So if you don't up the security deposit on all future tenants, it may come back to haunt you. This may vary based on state and local laws, but I would try to avoid anything that won't be applied to everyone equally. 
BillHoo

Registered:
Posts: 29
Reply with quote  #7 
I'm rejecting on credit report.

Yea, the credit report on first glance looks FAIR - according to Emperica.  My report generates a color coded histogram of debts past 90 days due (red) and debts paid on time (green)

One guy looks ok.  Lots of green. and low 600s on FICO.  Closer examination shows debt at 25 percent of his income (total from about 10 credit cards) and he has only been making minimum payments.  FAIL in my book.  Broke down his monthly income and subtracting his car payments, minimum credit card payments, low estimate on tuition, gas/car (did not include insurance) and did not include medical insurance.  After rent, he has about $100 to live off and raise his 5 year old.

Sister looks bad.  low 500s on FICO Big block of red from $25K in student loan debt.  Pays minimum on credit, so stays green there.  A few collection agencies after her.  Monthly break down plus amped up medical insurance (for her two kids).  And she only has about $200 to live off and raise 2 kids.

Brother - Low 600s, only two credit cards pays off.  Big block of red from $12K in student loans and a couple collections agencies.  Leaves him with $300 to live off.

Everything looks worse when I include car and medical insurance in the mix.  Mother is not working but draws welfare.

Ultimaterly, they can't afford it.  REJECT.

If they did not have the student loans, their reports would be all green.  But closer examination shows growing credit card debt and only minimum monthly payments.





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Bill_H
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