Re: Am I allowed to ask a potential tennant … - Posted by BeachBum
Posted by BeachBum on November 11, 2009 at 21:53:23:
There is no good reason to ask the question, and it could very well lead to a Fair Housing issue…which you DO NOT WANT!
The questions you need answered to approve/disapprove a rental applicant are:
1)What is your total household income? A proper answer will need to include documentation of the source of that income- Section 8 may be a source. Cash under the table is undocumented, and should not be considered.
2)How stable is the source? (How long have they been employed? How big is the Trust Fund? ETC.
Section 8 is generally very stable, BUT keep in mind that your new tenant will STILL be your tenant if they get kicked off the program. Section 8 has no obligation to physically remove them-that is your problem, and will necessitate a standard legal eviction process it the tenant doesn’t feel like moving. This also applies even if YOU complain to Section 8 about YOUR tenant breaking rules, dealing drugs, tearing up the house, etc.
3)What is their debt ratio, and are you comfortable with that? (What else are they paying out, and to whom? What about groceries, cable and cigarettes? This all comes before rent!)You should have clear guidelines that you apply to ALL applicants.
4)What is their historical financial behavior? What changes have happened or may be imminent, that will improve or degrade prior practices?
5)There is more, but this is a good start. I have, in the past, collected as much as $60,000 per month in Section 8 rents, but today have only two inherited tenants on it, and refuse to accept any new applicants that are subsidized by any type of program. Some areas of the country there is no choice, but I would try anything else first. FYI, I have turned around more than one property in a “bad” neighborhood simply by being hardnosed about the rules and the quality of new applicants.