Posted by Crystal M. on May 24, 2007 at 14:07:25:
A very low FICO score doesn’t necessary mean she doesn’t pay all of her bills on time. It could be contributing factors of too many credit cards, or her debt to income ratio along with some lates. She could have medical bills. You just never know. Look for evictions by doing a tenant screening and focus less on credit because we all are not perfect.
Having Trouble with Screening this Tenant - Posted by Frank
Posted by Frank on May 23, 2007 at 15:41:47:
I have a tenant who applied for my TH yesterday. From a gut feel she was the best one who came to look at it - well spoken, small child, educated, and steady employment. She did admit that her credit was really bad and that it would show up on my screening. Her FICO was less than 500 and in the ‘poor’ range. She also has 2 judgements against her from credit card companies. Need some advice from the pros here. I know there are professional tenants out there but she has steady employment and makes a good salary based on what I verified. My gut tells me she’ll be good - the credit report and judgements tell me otherwise.
Re: Having Trouble with Screening this Tenant - Posted by Rich-CA
Posted by Rich-CA on May 25, 2007 at 01:27:07:
Tye has really solid advice. The issue is character, because that allows you to predict how they will treat you. I had one applicant tell me about her bankruptcy, even though I was going to ask about something else. Her story was that she had a lot of debts and decided to do something else with her life - used BK to discharge the debt. Now I’m thinking that after she becomes a tenant she’ll decide she need a trip to Rome and will decide on Rome before Rent. I concluded this based on the unwillingness to pay her debts because she wanted to do something else (she did NOT say that she had a bad turn of fortune and couldn’t pay). I figured my turn would be next to not get paid. I did not rent to her.
Bad credit, especially recent, is an indication of poor character, which means that when its inconvenient, you won’t be seeing rent. Medical I usually let go, because of how unusual and disastrous those events are.
I also do a criminal background check.
Personally, I would ask questions based on the story I was told to see what inconsistencies come up or if it has any depth. There is a qualitative difference between answers from a script and from experience.
Finally, if I ever have a “funny feeling”, the answer is no. The only thing you have to tell them when turning them down is - “I’ve decided to rent to someone else.”. That does not mean you have another applicant, but its gives them little to work with if they want to charge you with discrimination.
Re: Having Trouble with Screening this Tenant - Posted by FlyingElvis
Posted by FlyingElvis on May 24, 2007 at 14:47:21:
I didn’t screen my very first tennant. I was new to landlording and just wanted someone in as soon as possible. She was great. For two months. Then the rent started being late. Every month. So I had to track her down every month. Then, one month, her phone is disconnected. Uh oh! I go over to the unit to find out that the front door is busted down. I thought someone broke in and killed her. So I go in. The ceiling is caved in and there are burned marks on the rug. One of the bedroom doors is busted down with burn marks on the bedroom rug. She is gone. So, I call the cops. Come to find out that she had an argument with her boyfriend. Called the cops and told them he was in the unit with a gun. So they called SWAT. SWAT comes and stakes out the unit for five hours before they decide to go in. They bust the front door down and throw in a flash grenade. Boyfriend is not downstairs. So they go upstairs. One of the bedroom doors is locked so they bust that down and throw in another flash grenade. Boyfriend is not there either. So he must have squeazed through the access door in the ceiling? Right? Well, a SWAT guy goes up there but the problem is there is no planking in the ceiling. Just insulation over sheetrock. So the SWAT guy goes through the ceiling. Turns out the boyfriend was never in there. He hightailed it out the back as soon as he found out the girlfriend called the cops. Sorry for the long story but I learned my lesson the hard way. After evicting my tennant I was out six grand. I’ve screened every tennant and if anything doesn’t look good I turn to the next applicant. I’ve been fortunate to have had a lot of applicants so that’s helped.
Good luck!
Re: Having Trouble with Screening this Tenant - Posted by Anne_ND
Posted by Anne_ND on May 24, 2007 at 07:29:00:
Well-spoken, good employment. Sounds like several of my problem tenants- college professors. I now discriminate against that non-protected class.
As a generalization, they are the most useless kind of tenants- head in the clouds, not a clue as to the business end of a hammer, and most likely to allow the small leak under the kitchen sink become a hugely expensive repair because they just ignored it. And the sense of entitlement is huge.
Establish a set of hard, verifiable guidelines and stick to them. Ignore your gut, or at least ignore MY gut, because it’s gotten me into trouble. My guidelines have not. And be consistent so you stay clear of Fair Housing issues.
good luck,
Anne
Re: Having Trouble with Screening this Tenant - Posted by Natalie-VA
Posted by Natalie-VA on May 23, 2007 at 21:47:11:
Frank,
Go with your gut. This sounds like an applicant I had a few months ago. When I went to verify with her former property manager, I discovered that she listed a Realtor friend of hers on the application instead of the real property manager. When I spoke with the real property manager, she shared with me what a nightmare this well spoken, well paid tenant was.
By the way, you need to establish clear and consistent policies regarding tenant screening. If your policy is that you don’t rent to people with bad credit, you need to stick to it. Otherwise, you’ll end up in trouble with fair housing laws.
–Natalie
Re: Having Trouble with Screening this Tenant - Posted by Ed in Idaho
Posted by Ed in Idaho on May 23, 2007 at 21:18:55:
I am starting to love to say this! You can never be a big enough A$$hole when it comes to renters. If you can have this girl initial every line on the lease and sign the bottom, come up with all the money needed BEFORE she moves in, pay the rent on time EVERY SINGLE MONTH, go ahead and rent to her.
If you can collect the $50 late fee plus the rent on the 2nd when it was due on the 1st, go ahead and rent to her.
If you can give her a three day eviction notice when she hasn’t paid her rent and the late fee on the 5th when her rent was due on the 1st, go ahead and rent to her.
It shouldn’t matter if her credit score is 100 or 1000 once she is in the place. If you feel you can never be a big enough a$$hole when it comes to getting your money, go ahead and rent to her.(or let a property managment company do it for you. Doubt they’d let her in with her history tho.)
If you can’t get your brain and heart to agree 100% on the matter, then I’d say DON"T DO IT!!! If you can’t be the person I described above, with the credit rating you are looking at, then don’t do it. Unless you have a thing for problems, headaches and sleepless nights!
Then again even the seemingly best tenants can turn on you when their going gets tough. Point is try as hard as you can to never let the tenants problems become your problems. If you can come close to what I described above, at least they will be leaving while their money is on the table, NOT YOURS!!!
Re: Having Trouble with Screening this Tenant - Posted by ken
Posted by ken on May 23, 2007 at 19:26:03:
We check former landlord they will tell the truth current landlord may lie to get rid of her.If she cannot give former landlord name and number we do not rent to them
Re: Having Trouble with Screening this Tenant - Posted by Frank Chin
Posted by Frank Chin on May 23, 2007 at 16:59:14:
Frank:
I made several exceptions over the years, 3 of them that I can recall.
One guy had a bankruptcy going back a few years, but other than that, no other derogatories. Refused to dicuss it, but I went ahead renting to him based on gut feeling. Learned later he guaranteed his son’s business that went bankrupt, and no way on his “door man’s” salary can he repay $100K. Paid the rent on time for the entire period he was there, about seven years.
Another was bankrupt a few years back. Blamed it all on a former wife. Paid the rent on time for several years, but skipped out on the last three months rent.
The third had collection accounts, write-offs, worked for his dad. Very educated and well spoken. Lived there for three years, then had a relapse of depression, his dad fired him, and was evicted owing six months rent.
What is my batting average?? Two out of three reverted to form.
Conclusions??
Some folks plan ahead, pay the bills no matter what, or move back home to mom if they can’t pay.
Others who took the easy way out see no problem taking the easy way out again, and not pay if it suits them.
Others may have mental or other problems that resurfaces from time to time that they cannot help Had a co-worker who loses his job every few years for things like cursing out his boss, punching out his boss etc. As educated or well spoken he may be, he will encounter financial difficulties from time to time. It is not something that is recorded on a credit report.
Frank Chin
Re: Having Trouble with Screening this Tenant - Posted by kennt
Posted by kennt on May 23, 2007 at 16:13:31:
I have rented to tenants like this myself. I don’t aslways go by FICO scores. I have rented to people who have worse situations. I also use my gut instinct of the person. Some may sisagree with me but i’ve been fortunate in my process. Just don’t take no stuff from her soon as she walks outside your lease punish her to let her know that you won’t put up with any nonsense. I know you want someone who will pay on time everyitme you go to your mailbox. Be carefull and fair. She may have just had afew bad spots on her credit doesn’t mean she wonm’t pay. She has a child and proably a man somewhere paying child support. Everyone runs into money propblems in their lives. That doesn’t mean theit bad possible tenants. If she doesn’t follow the lease get her out. I don’t mean be nasty but firm in your landlording.
Don’t do it. - Posted by phil fernandez
Posted by phil fernandez on May 23, 2007 at 16:00:20:
With a credit score less than 500, she does not pay her bills. I’ve actually never seen a credit score that low and I’ve been doing this for years. It doesn’t matter if she makes a good salary and has steady employment. She’s not using her salary to pay her bills.
Well spoken, small child,educated, and steady employment, big deal.
This one is a no brainer. Don’t do it.
Re: Having Trouble with Screening this Tenant - Posted by Rich-CA
Posted by Rich-CA on May 25, 2007 at 01:33:43:
Even the carrying costs of a vacant unit are cheaper than that!!!
Re: Having Trouble with Screening this Tenant - Posted by Natalie-VA
Posted by Natalie-VA on May 24, 2007 at 08:20:35:
I meant to say DON’T go with your gut. She’s bad news.
–Natalie
Re: Having Trouble with Screening this Tenant - Posted by IB (NJ)
Posted by IB (NJ) on May 23, 2007 at 16:23:40:
What’s the reason for the bad credit and judgments? Was it because she ran into hard times (many of us do) or was it because she doesn’t pay her bills? Are the judgments recent?
What would probably be the deciding factor is whether or not there’s been an eviction filed in the past. If so, “dump her” (A Bronx Tale).
Ib
Re: Don’t do it. - Posted by Sailor
Posted by Sailor on May 24, 2007 at 01:20:33:
That’s a typical credit score in my biz. Credit reports can tell you much more than a FICO if you read closely. I’m more concerned about unreturned videos & unpaid utilities than medical collections or judgments. I frequently drive by the current residence, & have driven by parents’ & references’ homes to see how well-kept. I use co-signers if it is a close call. If parents won’t co-sign I figure they know their child better than me.
I also look @ the applicants car. If it is held together w/duct tape & sports a bumper sticker “Pimp My Ride,” definitely pass. I am not impressed by new expensive vehicles because that also indicate lack of financial common sense.
For a single applicant I want to know about the boyfriend/girlfriend. If he/she is going to be an overnighter, there has to be another approved application.
Another thing for which I watch–someone who talks very fast & has a non-responsible answer for every question, asked or not… That’s a warning sign to me that they want to spill out their fraudulent story as fast as possible because it isn’t true.
You got good advice about being a tough landlord. If I don’t get my $$$ on or before the due date I serve papers the next day. My rents are seldom even a day late. (If they come in 3 days early, I reward w/a $5 gift certificate to Wal-Mart or Target.)
Good luck!
Tye
Re: Having Trouble with Screening this Tenant - Posted by Frank
Posted by Frank on May 23, 2007 at 17:30:27:
One of the judgements is from Jan 2007 and the other from June 2004. The one from this year is for a credit card. The one from 2004 is not showing who it’s from on the report - I have to ask her - don’t know if she’ll be honest about it though. I ran an eviction report on her too and it came back clean - no problems there - but I don’t know if she was asked to move or not by any former landlord - that stuff doesn’t show on the reports.
Great advice for landlords - Posted by John Merchant
Posted by John Merchant on May 24, 2007 at 13:33:29:
Tye is absolutely on target here so take her advice seriously, or fail to do so at your peril.
As an old-hand in the rental business I’ve had to learn the hard way, by my own experience, that an hour spent checking out a prospective tenant is worth several chasing one who’s in my property, not paying me and stirring up trouble.
I must appear to be an easy mark as I’ve had several prospects try to snow me, and not SHOW me their SS numbers, etc. and while I used to half-way listen to their sorry excuses, no more.
Re: Having Trouble with Screening this Tenant - Posted by IB (NJ)
Posted by IB (NJ) on May 23, 2007 at 23:19:12:
Talk to former landlord. Does credit report reveal any other names used that might be listed as a defendent in an eviction matter? You need to talk with her and see if she’s honest. If not, “dump her”.
Ib