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Shrewlandlord

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Posts: 4
Reply with quote  #16 
Hi all,

I and my husband are first time landlord, who would like to seek for advice on how to select best tenants. We listed our house for $1,250/month. We got recently 2 applicants:

1. A Grandmom, whose score is 88 over 100 (good), income $60,000 a year, own a house but plan to rent out. Applied with her 30 yrs old daughter, score zero, her W2 shows she earns $25,000 a year . They are willing to pay 2 months extra plus one month deposit. But the daughter is not qualified.

2. A single mom, 27 yrs old, out of state (we are in Texas), score 90 (very good), her income is $24,000 a year ((plus $19,000 benefit, I guess childs-upport??). But, her employer has same address as hers on her driver license.

Please advise which tenant should I pick from. I searched the 1st applicant home address, and it shows the mom bought it 20 yrs ago and is still the owner. It shows like big family is living there.

I have to get back to the 1st applicant by end of today. Please help.
Thank you so much.
ahkenaten

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Posts: 156
Reply with quote  #17 
What makes up your score system? What specifically disqualifies the daughter of option 1?

In my system, the single mom wouldn't pass any score because her main income (I don't count benefits) would not be enough to afford a $1250/month house when utilities, food, car insurance (car payments), and the cost of being a single mom are factored in.

Are these two your only choices? If it's possible to continue the rent out process to find more applicants, I would suggest you do so. Never hurts to have more candidates.
Shrewlandlord

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Posts: 4
Reply with quote  #18 
The daughter in option 1 has a credit score of zero (we use National Tenant Network screening service), and her income is just $25,000 a year. The report says rejecting her.

The single mom in option 2 has very good credit, the benefit she got turn out that she got $59,000 life insurance plus monthly $1,600 from her dad's pension (he passed away Jun last year). But she also quit her job Aug last year (after getting the money from her dad, I guess). She did give me a 2014 W2 of only the income from company she quit, and a letter from employer who has same address as hers on driver license. That's why I have a feeling she does not have a "real" job right now. This single mom asked me to start the lease next month although she will pay the deposit and first rent now.

Yes, we are still showing the house now.
I have a feeling even when we continue to show the house, we will get another applicant with another "issues".
I already turned down one applicant due to income problem, not tell the truth in application (I don't want to say lie).
ahkenaten

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Posts: 156
Reply with quote  #19 
If you absolutely have to pick between these two, I would go with option 1 and put both the grandmother and daughter on the lease. The grandmother might simply be trying to get rid of her daughter by putting her up in your place using her own name. She may know that no one would rent to her daughter with that credit score, which also means that the grandmother may not even live there once the lease is signed.

Personally, I would reject both of them. Since it's the beginning of the month, I would wait a little longer and hope for better prospects... maybe even reduce the rent by $25 if you're not getting enough applicants. A prospective tenant will always have an issue (no one's perfect). But those options just look like too much trouble to me. So that's what I would do... but I know how difficult it is to have an empty apartment and paying the mortgage. Hopefully things will work out for you.
Shrewlandlord

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Posts: 4
Reply with quote  #20 
Thank you so much for your advice, ahkenaten. We eventually go with option 1. We signed the lease today with 2 months security deposit, and will hand the keys this evening. Wish me luck, lol! [smile]
ahkenaten

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Posts: 156
Reply with quote  #21 
Keep us posted! Would be nice if it worked out
NoNonsenseLandlord

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Posts: 178
Reply with quote  #22 
What is the rent you are asking?  How many bedrooms?

Make sure applicants have 3.5x (or more) of the rent in income.  Do not forget to look at criminal records too.

The #2 candidate will be trouble.

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Shrewlandlord

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Posts: 4
Reply with quote  #23 
Hi, just an update. So far, everything goes well with the tenant, she paid rent on time every month. She asked for a couple of repairs but they are fair because we knew those problems with the house before. So, we got them fixed. No complaint so far, but let see [biggrin]
ahkenaten

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Posts: 156
Reply with quote  #24 
That's good news. The real test will be 6 months to a year from now, but this is a good start nonetheless
People_Locator2015

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Posts: 15
Reply with quote  #25 
Quote:
Originally Posted by OHlandlord
Depends.  While you can't really garnish wages from self-employed folks, you might still have hope.  Check your state laws.  You may be able to attach bank accounts, lien personal property, and/or attach tax refunds.  If these people might buy a house or other large ticket item in the future, having a judgment against them will force them to pay you off before they can buy it.  The judgment will ruin their credit and force them to pay higher rates on credit cards, loans, etc.  Consider these and research your state's methods of enforcing judgments before you decide.


Yes you can garnish wages of a self employed person. If it is a sole-proprietorship you can attach a garnishment to their bank account and put liens on any assets they own. If the business is run out of your rental property ie: you have received mail in the company name either sole-proprietorship or incorporation, that establishes a relationship between your rental agreement and the company. So you can request your rental board to add the company on as a defendant, which is great because if it is a incorporation you can attach your garnishment to the business assets and or bank account. Certain exemptions apply depending on which state or province the tenant resides.  If the company is an incorporation, you can garnish the individuals paycheck.

Hope this helps, I locate tenants all the time that are self-employed and my clients have been very successful both in the United States and in Canada, in garnishing self employed parties.



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D.Holden
undergroundlandlord

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Posts: 13
Reply with quote  #26 
I used to not like asking the "intrusive" questions either until I got burned pretty bad a few times due to not having sufficient information. Now I guess i'm getting more in line with looking at it as a total business. If you are unable to fill out the entire form I am unable to rent you the entire home. Will you be satisfied with the carport only?  Perhaps you only wish to stay in the basement? What? No? Oh you want the entire house? Great now fill out the entire form. Not complicated. Fix a few homes that the tenant moved out in the middle of the night and destroyed and you will no longer care whether you are intrusive or not. 

Now let me comment on tenant screening because I have some insight on this as well. I have about 12 homes that we rent out in Cleveland County, NC.  Some of these are in the rural area and some are in the city. Some are in great neighborhoods and some are in less than desirable neighborhoods.  I personally do not like credit background checks especially in lower income and worse neighborhood settings. It simply doesn't tell you anything. I personally have tenants in homes that have terrible credit yet pay me on time most every month and are relatively good tenants. In turn I have one couple in particular that have spectacular credit but drag everything out as long as they can without recourse and do other things to be basically a thorn in the side so to speak. I have used credit checks and do see a somewhat value in a higher end rental or maybe an apartment situation but it's not a cure all by any means. 

What we have done here in cleveland county is a few of us got together and developed a plan. Ultimately as a landlord your biggest two issues are "will they pay you" and "how will they keep your unit" am I right? We set up a website to put tenants in as they were ripping us off. Sort of a blacklist if you will. Now when we take applications we have them sign that it's ok for us to check their rental history which they do.  Then we run the info they gave us against the database of each landlord in there and if there is a hit the landlord pops up. Then I contact him or her and see if I have the same tenant that messed them over. This has saved us a lot of money in the past few years. Now we are expanding it and it's free. It does take effort by you to get other landlords to using it but trust me once it starts  you will see that most of the bad tenants are just a small percentage that have been going from landlord to landlord to landlord. Keep watch on it as we expand this over the next few months. http://www.undergroundlandlord.com 

I do highly recommend criminal background checks if for nothing else for you to protect yourself as you must interact with your tenant. 



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undergroundlandlord

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Posts: 13
Reply with quote  #27 
Option 1 to me sounds like a complete debacle. I have been a landlord for a decade or longer. I have been a dad for 2 decades and am now a granddad. I have been a homeowner for a while as well and I can tell you with absolute certainty that I would never rent a place and then rent out my house. That doesn't remotely make any type of sense to me. So far in my experience of renting homes if a story sounds strange or is extremely abnormal it's not a good situation.

Option 2 I will comment on but I am biased because almost every time I have tried a scenario similar to option to it has ended up a disaster. Honestly with those two options I do believe you are better off paying the mortgage yourself and waiting for a more stable candidate. JMO.

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