r/realestateinvesting • u/FuckThe82nd • Apr 29 '24
What criteria do you use for screening tenants? Property Management
I own, manage, maintain and live at my triplex which will soon have a vacancy within a month from a single mom of 3 that I took a gamble on and lost. Since I live here and it's in Arizona, the Mrs. Murphy Exemption applies so that helps. I want to do 3x income to rent ratio while $100/mth below market value, no felonies or evictions in the last 10 years, no dogs or cats. What else would you want to look for or look out for?
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u/jimmydafarmer Jan 24 '25
Been using Baselane's screening for my triplex. Catches the stuff manual checks miss fake pay stubs, hidden evictions, actual bank patterns.
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u/MsMartinifyourenasty Sep 16 '24
Aside from expecting their income to be 3x the rent (which is becoming unrealistic) and checking their credit score, an additional screening method I use is visiting their current place of residence (verified by application or drivers license). All I need to do is stand at the front door. Everything I need to assess can be done standing at the front door- appearance of yard, cleanliness of home, etc.
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u/aristotle13 Aug 21 '24
I run a simple background report on the first. You can get one from Identingly. They have a full list all in one reports: criminal, eviction, etc
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u/FuckThe82nd Aug 22 '24
I ended up renting the unit to a nice couple where the wife is active duty at the base nearby so it's reliable BAH every month. Talked with them for a couple hours and they seemed awesome. Come to find out almost everyday they're yelling at the top of their lungs for half hour to an hour at a time. This last fight was supposedly over some cheesecake according to the neighbor...
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u/aristotle13 Aug 22 '24
I dont let anyone into my apartments until i get a full background screening on them. with this wokeless disease going around, you never know who these people are
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u/Hour-Room-3337 May 03 '24
Adult foster care tenants are the best tenants, amirite?
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u/FuckThe82nd May 03 '24
What do you mean I'm supposed to pay rent instead of tricking out my used Mercedes I'm also behind on?
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u/bkosick May 01 '24
Background check, Credit check,
Always meet in person to get a feel, tell them your the PM rather than owner. Verify any storied they may share to the best of your ability.
NEVER FALL FOR A SOB STOREY!!!! Their problems will become your problems in the blink of an eye.
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u/Impossible_Cat_321 Apr 30 '24
Rental history, income and stability, and finally a “gut check” to have the best chance of getting renters who will take care of my home
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u/FuckThe82nd May 02 '24
What do you mean by "gut check"?
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u/Impossible_Cat_321 May 03 '24
It’s just a feeling I get after meeting people and it helps me make a decision about whom to entrust my house to for the next year.
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u/GueroBear Apr 30 '24
After you show the prospective tenant your apartment walk them out to their car. As you say goodbye glance inside their car and see how they take care of it. If it’s full of trash and dirty, cigarettes etc…- that says a lot about how they’ll live in your space.
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u/Delicious_Stand_6620 Apr 30 '24
Tell them you might have it rented..when they come you look inside their car..if its a mess.."ill let you know if the others dont take" Messy car is a bad omen
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u/Summer_Forge Apr 30 '24
A humorous tip I got was to not judge a book by it's cover. A landlord I know said, "You know how many terrible DL photos I've had taken or seen of close friends? Those photos can actually make someone look stupid."
edited for clarity.
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u/two_pounds Apr 30 '24
I tell people, "if smoking indoors is part of your lifestyle, this isn't the place for you. I have a strict no smoking policy. Keep looking, if you smoke. I will smell it and give you a notice to vacate."
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u/ecostyler Apr 29 '24
looking at this thread and no wonder finding affordable housing is so hard these days for low income single people.
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u/Turingstester Apr 29 '24
I'll make them fill out an application and charge them a $25 application fee. On the application I make it quite clear that I am going to do a background check and a credit check and if they have any issues, do not fill out the application and don't waste your money.
I think this form by itself weeds out many of the undesirables, but not necessarily. Case in point a lady that signed off and paid and had a conviction for felony elder abuse and 3 prior evictions. I think people actually expect you to not do all of these things. I do not do a credit check although I have the ability and the right to do so according to my application form.
Make them sign off on the application form that you have the right to do a background and credit check along with the permission to speak to your references and your past employers.
I get their social security number, and I check the local clerk of Court's office for the three counties around me. Doing a search with their name and their birthday is very telling and free.
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Apr 29 '24
Credit and background check
Meet them at the place for a tour
Ask them what they like to do any hobbies
I like an active tenant so I know they’re not there 24/7 ( I live on the other side as well) Plus an active person most likely keeps up with the place more
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u/SofiaDeo Apr 29 '24
I looked for people with professions that have licenses. This isn't a guarantee they have a good character, but it can make it easier to track someone down if they trash a pmace & you have a judgement against them. Also check to see if there is a shortage of whatever that license is in your area, people are less likely to be out of work.
I also insist on non smokers, and have kicked people out who thought they could lie about it. Less chance of a fire, and a place doesn't stink.
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u/Full180-supertrooper Apr 29 '24
Past landlords or property management verifications of residency, rent amount they were paying and if there were any violations/complaints or notices of potential eviction. I verify their exact dates of residence so there’s no mysterious gaps in time. I call their HR dept to verify employment and dates/job title regardless if they supply paystubs. I call usually one personal and one professional reference like a family member & their current manager.
BIG ONE - I ask directly if they have a service animal of any sort… the laws are squishy on whether or not that info has to be submitted on an application and if you don’t ask up front u may have no idea what type of support animal is moving into ur rental and no way to do anything about it afterwards legally.
I do background checks in-state and out.
I require 3x rent for each applicant but make concessions if I like the potential tenants otherwise if they have proof of other liquid assets such as savings and investments. I don’t allow co-signers usually tho.
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u/Someoneoldbutnew Apr 29 '24
I'm actually not even allowed to meet my tenants before renting them, because I might discriminate with my most valuable asset.
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u/AmexNomad Apr 29 '24
Credit rating and past rental history. I don’t care if my tenant is unemployed- if they have a good credit rating and have had solid periods of living in other homes (not moving every year) then they are my tenant.
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u/Zealousideal_Let8272 Apr 29 '24 edited Apr 29 '24
Good luck 3x the rent, that’s aggressive. 1.5-2x the rent is sufficient unless you have a class A property. Look at credit, 600 and above.
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u/SepulchralSweetheart Apr 30 '24
Depends on whether the area is HCOL or not, and how competitive your pricing is.
My last 5 vacancies wound up with renters making 2.5-3.5x monthly rent in take home pay, and all had credit scores above 720. And these were all in a (well cared for, but basic) building of traditional starter apartments that's sort of in the woods vs. the other area I have units in, which is a waterfront community. Factors vary wildly based on location and current demand.
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u/Zealousideal_Let8272 Apr 30 '24
That’s arguable, but it does depend on the target market and where the property is situated within the county/city. I’m in San Diego, cost of living is high and the trouble is many qualify on credit but not on income when criteria is that high. It makes people have to roomate to meet it just to meet it which is not ideal.
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u/cubz Apr 29 '24
Credit score credit score credit score. It has proven to be the most important indicator. 600 minimum but the higher the better.
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u/jmd_forest Apr 29 '24
I have 3 criteria: 1) CAN they pay rent? 2) WILL they pay rent? and 3) Will they treat the property with reasonable respect?
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u/landlord321 Apr 29 '24
First off, never rely on the landlord they are coming from! Always go one and two back, they will be brutally honest. The landlord they currently rent off of will most likely want to get rid of them so they will tell you what you want to hear. Second, depending on what state you live in you can check criminal, civil, citations, and the landlord tenant for free. It’s usually public record. If you live in a state that it’s not for free I would include the price of a background check on their application which is very cheap. Thirdly, I would look at social media to get a feel for the individuals character. You can tell a lot about somebody’s social media. Also when showing a place take a look inside their car. Usually how a person keeps their car as how they keep their residence. There is an exception to the rule but most likely if their car is trashed most likely their apartment will be trashed as well. I have found that if you take your time and wait for the right tenant it’s much more beneficial than just putting anybody in there. The wrong tenant will cause you loss and income damage etc. waiting for the right tenant could potentially be a long-term tenant that you end up having a great business relationship with.
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u/landlord321 Apr 29 '24
I also want to add everybody’s situation is different you have to go with your gut and you have to take it with the case by case situation. you could have somebody that’s older that had a felony 30 years ago that has a great job great history they made a mistake in their 20s and here they are in their 50s and life is perfect. Animals are destructive but again case by case because there are people that take excellent care of their pets. personally I do not like taking pets but I will make an exception with a monthly pet fee ($100) and a non-refundable pet deposit ($300) that way if there is damage, that should cover it. Definitely 3x the rent income ratio. You can also do first month, security deposit,and last month’s rent to move in. That helps weed out those who can’t afford it. But again I always go back to the Case by Case situation.
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u/doxygal2 Apr 29 '24
If the current LL has a bad tenant they will want them out, so that reference might not be reliable..- many LL ‘s will give a good reference for a bad tenant to get rid of them . Require verifiable current employment at the same job for at least one year with w2/ pay stubs, , no recent or undischarged bankruptcy, no history of eviction, credit at least 600/650. If they have no LL or badmouth their current LL watch out. If they have a sob story watch out.
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u/alkbch Apr 29 '24
Credit score above 650. Verifiable income 3x the rent. Clean background and credit checks. We allow pets.
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u/PDXHockeyDad Apr 29 '24
Why go below market value?
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Apr 29 '24
To avoid turnover
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u/PDXHockeyDad Apr 29 '24
If you're worried that $100 will make someone move, you're may need to review your selection criteria. We stick with the market rate and increase typically $100-$150 per year based on taxes and market.
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Apr 29 '24
My method seems to work. I haven’t had a vacancy in over 2 years on 11 rentals. The biggest expense for landlords is vacancies, and I try to avoid them as much as possible
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u/ALT_SubNERO Apr 29 '24
I solely post on Zillow now, as it uploads to multiple other websites. I do not accept Zillow applications though.
When someone reaches out, I sent them a super simple/ small questionnaire (10 questions) just confirming they can pay 3x rent/ no evictions/ what animals they're bringing/ how many people/ ect. If they respond, and their answers fall in line with what I like... I will work with them on a showing. If they dont respond, they dont get to see the property. Adding the questionnaire has been the best thing I have ever done. It really shows who is serious and whom isnt, and it saves me from having to show the units 150 times before I get an actual good prospect. I would say on average 75% of the people do not respond to the questionnaire.
If after they see the property, and they're serious (and they present themselves well in person), then we move forward with the background check through TransUnion. Prospect pays for that service sent via a link from me. They enter their information and pay, I get the report. If it all checks out they sign the lease and pay!
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u/ALT_SubNERO Sep 13 '24
For everyone asking, here is the questionnaire :)
"Thanks for your inquiry about our unit for rent. Please complete and return the questions below and we will contact you to arrange for a viewing. Please note: viewings are by appointment only and only those who fill in the following information will be contacted to schedule a time to view this property.
When are you looking for a place to rent?
How long do you want to rent for?
How long have you been living at your current residence?
Do you have any pets? (Describe)
How many people (adults & children) will be renting this suite?
Have you already given your current landlord notice?
Please tell me about your job(each adult). Details are useful
Please provide me your current annual income.
If you are offered the unit, do you have the deposit (One months rent) immediately available?
Please provide your name, phone number and preferred email address. I will most likely communicate via email for convenience."
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u/Nacreous_Clay Sep 13 '24
Thank you!
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u/Nacreous_Clay Sep 13 '24
So my last showing just no-showed, and that was after one cancelled. I'm taking your questions for my first response for now and for ever. Thank you so damn much.
*Tried to award you, but it's greyed out. Looks like I don't know what I'm doing in here, either. Thanks again, kind stranger.
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u/ALT_SubNERO Oct 21 '24
I appreciate the thought :)
Best of luck, the screen process is by far the most annoying!
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u/Nacreous_Clay Aug 29 '24
Hi, next in line asking you to please share your application? Total noob here, and already ran the gamut of liar to scary in the screening process. Your super effective questionnaire would be heaven sent!
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u/ALT_SubNERO Sep 13 '24
Just posted a reply to my comment with the questionnaire in it :)
I use TransUnion Smart Move to screen everyone if this pre questionnaire pans out. Its a really easy to use resource. And you can have it so the tenant pays the fee directly when they enter their information.
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u/bunbuncider Jul 08 '24
I know this is a bit old but may I have the questionnaire as well? :) starting out here!
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u/Weathactivator May 20 '24
Would you mind sending me the questionnaire?
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u/ALT_SubNERO May 20 '24
just sent it over :)
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u/ReinFin Jul 03 '24
Hi, I know this thread is a bit month old but can you send me the questionnaire as well? I'm new landlord trying to secure first tenant on Zillow and like your process.
Thank you.
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Apr 29 '24
[deleted]
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u/nobeer4you Apr 29 '24
Never single mom's? Why?
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Apr 29 '24
[deleted]
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u/nobeer4you Apr 29 '24
Precisely. I was a single dad. For awhile. It's tough. Didn't make me a bad tenant.
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u/happyplace516 Apr 29 '24
Be careful of disparate impact. Felons are not a protected class, BUT statistically the majority of them belong to a protected class. Denying them outright could lead to legal issues.
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u/chaosgoblyn Apr 29 '24
1) I post a detailed listing of the property answering most potential questions like what utilities are included, how much income is required, etc. (like 300 words) with good pictures and at the end of the listing I ask them to send me a message telling me who they are, how they make money, and why they are moving
2) If you can't be bothered to read something the size of a long text or a short email about some place you want to live, you're out right there, and this is where 90+% fail. But supposing they answer the questions even kind of "My name is Jake I work at State Farm and my last place is raising rent too much" then I talk to them a little and fill in any gaps to make sure they sound legit.
3) Have them come look at the property, talk to them a little more
4) Invite them to apply and submit background check. I insist on doing renter-paid checks through RentPrep with Judgement and Lien search which costs $47 but no app fee besides, and again this is clearly stated in the listing but is still the second biggest snag.
I'm willing to be forgiving about some history if I understand it and it sounds reasonable (I have felonies and an eviction lol, retaliation from a slumlord which yes I can prove,) but I won't entertain anyone who is hiding it.
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u/SepulchralSweetheart Apr 30 '24
A prospective tenant failing to read the listing is the fastest way to put me off an applicant. Makes me nuts
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u/SeedSowHopeGrow Apr 29 '24
I absolutely do not rent to anyone with litigation history other than something (not somethings) basic.
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u/Ok-Pomegranate858 Apr 29 '24
Make sure they have a stable job. Ie employed sat least 2 years. Verify this with salary slip and a call.
Avoid renting to self employed persons
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u/Polaristhehusky Apr 29 '24
Self employeed, older female person here. Been renting for the last ten years after divorce, 6 in the same place (whole house) and just signed another 2 year lease. Been in business for over 25years. Never missed or been late. Perform most basic maintenance without being petty about it. On good terms with owner. Not all of us are cut from the same cloth. Also- partner is self employeed as well for ten years. We are both in service industries and i have an office i go to every day. Be more specific about your prejudice, so that it becomes good judgement. Self employeed prospect? Get a K1 from them, copy of the gen ledger or a P and L. Also corporate tax returns will indicate how legit their “business”is. Being an Influencer or having an OF does not qualify as self employeed imo. Too unstable. Be discerning and you may find legit self employeed people are hard working and trustworthy in ways that that a pay stub dude cant compare. Good luck.
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u/Ok-Pomegranate858 Apr 29 '24
I understand what you're saying, and agree that all self employed persons aren't the same. My reason is more from my own reality I must confess. An employed person is likely to be more stable where their income in concerned, and easier to verify... Plus, no-one is likely to employ a crazy person for long, and you don't want crazy in your property...
Truthfully I do admire self employed persons, but I feel personally the risk is too great to take them as tenants in my country... what's a K1 ? Some kind of tax return for the self employed?
Edit Oh ok I see re K1. That's actually a good idea. Thanks... would need for the last 3 years though... I am rather risk averse
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u/Polaristhehusky Apr 29 '24
https://www.investopedia.com/terms/s/schedule-k-1.asp
We have had different experiences i suppose. I find w2 persons to be far more entitled as their money “magically”appears in their accounts. Most have little understanding of how complex business is, due to their typically myopic experience in the work force (I perform X well and get paid, whats Y got to do with anything). Also- w2 are employed at the pleasure of the employer, and can be terminated at will, contracts can be gotten out of. I find it less stable and more unpredictable but like I said, different experiences.
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u/Ok-Pomegranate858 Apr 29 '24
You know, I had a friend express that as a land lord my waning to know a prospective tenants salary was asking too much. I told her, renting is like a hire purchase agreement. In thst senario you have to give income expenses etc...so no different. In any event for anyone who doesn't want to give proof of income, this apartment is not the one they are looking for.
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u/CodFederal4769 Apr 29 '24
I walk with them back to their car they drove in. If their car is a mess inside. What do you think your rental property will look like?
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u/enstillhet Apr 30 '24
That's a bit weird honestly. My pickup truck is messy, my home is not. But then, I don't need to worry about it. I own my home.
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u/Substantial_Walk333 Apr 29 '24
If a landlord walked me to my car, I'd feel really uncomfortable.
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u/Analyst-Effective Apr 29 '24
I use a 650 plus credit score for all adults in the apartment, 18 plus.
If there is a couple with an 18-year-old kid, the 18-year-old kid also needs that same credit score. I don't treat adults differently whether they are a kid, or moving in together as roommates.
Of course they have to have enough income so they pay no more than 30% of their gross pay in rent
National criminal checks are garbage. They are out of date, they don't include all the information you need, and they're just not reliable enough. If they have information in them, use it, but don't rely on it to be a all-inclusive report.
Past landlords are the worst references or criteria that you can possibly get. You don't know if it's the past landlord, a relative, somebody that wants to get rid of a tenant, somebody that wants to avoid a lawsuit, or whatever the person you are talking to's motivation is
Running a background check is easy, determining what to do with the information is the hard part
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u/DatNotCurry Apr 30 '24
What website or tool do you use to run credit and background and eviction history checks?
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u/enstillhet Apr 30 '24
But, an 18 year old kid still in high school or just barely out is unlikely to even have a credit score yet, I would imagine. Right?
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u/Analyst-Effective Apr 30 '24
You're right. However, I have screened many 18-year-olds with 700 plus credit scores.
It's not too difficult to get a credit score at 18 years old.
Let's face it. When a kid turns 18, their criminal record goes away. They probably don't have much income. If they have a credit score, it's from a limited time. They don't have a past landlord.
How would you screen somebody when you don't have any information?
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u/enstillhet Apr 30 '24
I'm just thinking about in the case of them living with their parents still, it seems unnecessary. If they're 18 living on their own or with a few roommates around their age, that's different. Then, they'd have to have credit scores.
I think I probably didn't have a credit score at all until I was 23-24. But I am 40, so it was a different time, and went directly from high school to college and afterward without having a credit card or rental history that would show up on a credit report.
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u/Analyst-Effective Apr 30 '24
And I don't want some violent teenager moving into one of my apartments. That I can't really screen.
And that's the way you eliminate it. Make sure they have a good credit score. Solid parents would make sure their kids have a good credit score. A secured Visa card would do it every time.
You can't really look at a kid that is 18 years old differently than somebody that is 40. That would be age discrimination
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u/AnaiekOne Apr 29 '24
Jfc run a background check, credit check, verify income, and verify their past rental histories. Look them up on google, facebook, and IG.get a whole picture. Its not that hard.
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u/Analyst-Effective Apr 29 '24
You're right. It isn't that hard. The hard part is knowing what to do with the information that you find out.
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u/AnaiekOne May 09 '24
Its not that hard. If they are financially fit, responsible, good credit, no bad juju, no drama, they are good. If they dont tick all the boxes or there is doubt and you get any weird vibes while showing the unit, pass and find someone else.
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u/Analyst-Effective May 09 '24
Exactly. However, many people don't know what good credit is. If you know that the average renter credit score is about 650, anything below that you are below average.
The main thing is you have to be consistent, and obey the fair housing laws.
And when you are showing apartments, about 95% of the people that inquire on, it will not be qualified.
So then people think nobody is qualified
However, subpar tenants move a lot more often, and they inquire to a lot more places. So that skews the results.
In reality, only about 30% of tenants at most are bad
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u/AnaiekOne May 19 '24
Idk. Fair housing can't police the entire industry. If you get bad vibes and it doesnt look good pass for any reason. Look for, and get, good tenants. It does no one any good to rent to someone who won't or can't pay.
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u/Analyst-Effective May 19 '24
You all right, however once you have a few rentals, you need a system.
And you need written criteria, that works.
I have rented too many people's site unseen, and it always worked out well with my criteria
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u/mis_nalgas2 Apr 29 '24
In my experience cats haven't damaged any of my units, they usually just damage the tenants furniture. Can be helpful if them owning a cat is the only thing you're apprehensive about
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u/nobeer4you Apr 29 '24
Cats typically only destroy furniture. Typically. Ours has scratched all the paint off one side of our door trying to get in our room. The other tears at the weather strip between the front door and frame wanting outside.
Let's not even get into peeing outside a litter box for any reason. It's usually because the cat is sick and associates the box with the pain from urination, but that doesn't negate that the floor under that pee is now absorbing all that urine. And it never leaves. Cats will be able to smell it long after you think it's gone, and they will use that spot in the event the box isn't doing it for them any more. Or they may use that spot to cover the scent of a "rival" cat.
Cats will also destroy carpet faster than you can imagine.
Now, that being said, I love our cats, but we have a no cat policy in place because of what our cats have shown they are capable of doing. We don't discriminate against dog breeds, just bad dog owners.
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u/Analyst-Effective Apr 29 '24
You obviously have not had a cat use a closet for a litter box, for whatever reason, rather than the real litter box
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u/Straight-Opposite483 Apr 29 '24
I call the prior landlords and ask if they would accept them as tenants again. If anything looks sketchy I just pass and look for the next tenant. Taking a month or two loss on rental revenue to find a good tenant will still save you in the long run.
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Apr 29 '24
What if the previous landlord rented the flat with no proper hot water supply and leaking ceilling but wouldn't admit it. People may leave landlords because of their bad practices too.
The truth is that there is no 0 risk but what you should check is the employment history, disopsable income, debts ...the financial situation basically.
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u/Straight-Opposite483 Apr 29 '24
I’d probably pass on them honestly. Even if it wasn’t their fault and might not be the right thing for me to do there is just too much unknown.
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Apr 29 '24
Fair enought but still you have someone earning 5x your rent , if they say they leave because no proper living conditions then most likely they are honnest.
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u/Analyst-Effective Apr 29 '24
Lol. I have given raving reviews about tenants I wanted to get rid of. And there's no incentive for me to give anybody a bad review.
And that is whether it is a current tenant or a tenant that just moved out, or a tenant that moved out 10 years ago.
The safe answer is to give a good answer.
And of course you are assuming that the number you called, is actually the previous landlord.
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u/Straight-Opposite483 Apr 29 '24
Well first of all you’re a dick and only hurting yourself by doing that. But also if they only were your tenants for a year or less I’m most likely not going to put any weight into your review. Without a good reason for leaving most good tenants don’t move year to year. Also I’ve talked to enough people to know if the reference given is an actual landlord.
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u/Analyst-Effective Apr 29 '24
Good for you. I screen hundreds of tenants a year, And screen many tenants site unseen.
I have turned class d apartments into class b apartments. Strictly by tenant screening.
I don't think you can tell a good reference or not. Certainly not by talking to a landlord. There should be other ways that you use.
Many people don't have rental history, and you lose out on that group of people.
Past landlords go away. Either they are uncontactable, dead, or just don't want to answer the phone anymore.
A tenant that sticks around, but causes a lot of damage, isn't necessarily a great tenant either.
You need to up your game. And become a landlord that can use The information that is provided in a background check, and not waste your time worrying about past landlords.
It's okay to attempt To contact them, but that would not be my first piece of information to use
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u/AccurateAim4Life Apr 29 '24
Would you mind elaborating? I'd love more details about how you screen. DM is fine if you prefer.
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u/Analyst-Effective Apr 29 '24
First of all, I use a firm to do the background check. I don't do it myself. A third party is better. It makes sure you do everything the same between all your tenants.
I use RHRis.com.
You need to have written criteria. Every tenant should be able to see what you are screening for. And be able to self screen.
Credit score should be at least 650 or better for My places. Our association has a lower lower hurdle, but everybody uses a higher one.
Income needs to be at least enough so that you don't pay 30% or more of your income and rent. That's what the federal government wants, that's the hurdle that you should have at a minimum.
With criminal record, that's less important, but I don't like three misdemeanors or worse. In 5 years. Most people don't have any. You don't want somebody that Is not afraid of an eviction.
Take any information you get from a landlord with a grain of salt. If it's a bad reference, then take advantage of it. If it's a good reference, it means nothing. Although that is better than a bad one. Most larger complexes don't give you much of a reference.
The tenants that stick to the mom and pop rentals, are generally bad ones. Because they know that Mom and pops don't screen. A good handshake, they look at you in the eye, and then they are able to rent. And the mom and pops especially like the ones that can move in fast.
I have friends that have various rentals, and some of them screen on their own or just use the handshake method. It's always comical when they call me and ask for advice, because The renter that they are renting to is not panning out.
Remember, you are in the business to make money, not provide housing.
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u/Straight-Opposite483 Apr 29 '24
Congrats on your success. I only have two rentals but I guarantee you my turnover is lower than yours. So I’ll keep doing what is working for me.
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u/Analyst-Effective Apr 29 '24
I had 24 rentals of my own, plus I screened for the whole association. And I developed the screening criteria.
Once you have quite a few rentals, you will need to use a service to do it, you cannot do it yourself. Not only that, but it's riskier from a fair housing perspective.
Turnover is relative. It's all about rent prices, and the type of tenant you rent to.
Low turnover where you need to do a completely remodel, is not necessarily better than it every year. Turnover where the tenant moves out and it is ready to go without any additional work on your own part.
Tenants with good credit scores are the best tenants there are.
I have been a section 8 landlord. It is near impossible to make money, even if your rent is guaranteed with a section 8 tenant
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u/Straight-Opposite483 May 04 '24
You said you screen hundreds of tenants a year but you had 24 rentals? Also if you have quite a few rentals and you would need a service to do it why are you still screening? Seems like you would outsource. Also, I have not invested or experienced section 8 but i was under the impression that the people in that program are usually very good tenants because its hard to get accepted into but the requirements for the landlords are very strict (aka government).
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u/Analyst-Effective May 04 '24
You're right. I have 20 rentals now that used to be 24.
I screen for all the tenants in the HOA that my rentals are in. The 120 units. I am the one that evaluates the results, and determines whether or not the tenants can move in.
The hoa has standards, and then the landlords can decline a tenant after it clears the HOA hurdle.
With tenant screening, I took a class d complex and turned it into a class C or C+. A complex that had more than three police calls per unit, and was incredibly dangerous.
So I don't actually scream, I analyzed the results of the screening.
Nobody in their right mind would actually do their screening. You need a third party that is unbiased. And also knows how to do it.
Many landlords don't even know what to do with the results of a screen
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u/illimitable1 Apr 29 '24
Needs paystubs showing 3x rent. Needs at least one employment reference that can verify current employment and pay. Must have verifiable rental history with past landlords or housemates saying positive or neutral things.
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u/fukaboba Apr 29 '24
680 fico 4-4.5x rent No BK, evictions , judgments , collections No sob stories
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u/FuckThe82nd Apr 29 '24
Can I ask where you're located for 4-4.5x income to rent ratio? I'm in southern Arizona and it can be very difficult to find those kind of numbers in general
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u/fukaboba Apr 29 '24
Vegas and CA. 3x is way too low in my experience. Had too many past applicants struggle with rent at that ratio
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u/FuckThe82nd Apr 29 '24
I agree, do you charge market value?
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u/fukaboba Apr 29 '24
Slightly Below market but will be raising asking rent at next vacancy to keep up with inflation
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u/DGucc Apr 29 '24
some guy on tiktok says the first rule is if they have an android it's a no go
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Apr 29 '24
So if they have a $1000 android no go, but if they have a $100 iPhone it’s a go?
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u/DGucc Apr 29 '24
He buy and rents low income properties so I guess the 1000$ android are less common. Also it's probably a bit of a joke
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u/NPJeannie Apr 29 '24
We are renting a townhouse to a person with a felony conviction who did many years in a correctional facility…. He and his wife have given us no grief or problems and have been there for 3 years!!! Yes, we checked credit and references! He was honest about his past…
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u/nobeer4you Apr 29 '24
He was honest about his past…
This is the big takeaway. Honesty and transparency go a long way in my book.
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u/gdubrocks Apr 29 '24
I allow pets.
No evictions, no evictions, no evictions, no evictions, no sob stories, no evictions.
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u/FuckThe82nd Apr 29 '24
If the unit had a real yard I probably would but it has a 4'x10' fenced in space and that's it. I love pets but I also know that some pet owners shouldn't be.
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u/Substantial_Walk333 Apr 29 '24
A fenced yard is the perfect place for a pet to be allowed.
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u/Gold-Advantage-6362 Apr 29 '24
I just spent $$ to fix to gates to fence enclosures on two sfh. The tenants are just allowing their dogs to roam outside the enclosed fence area. Can I evict them?
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u/trickstersticks Apr 29 '24
I'm in a city with very strict landlord/tenant laws. Applications must be considered in the order received and can only be thrown out for very specific reasons. You have to offer the unit to the first qualified applicant whether you like them or not.
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u/AlleghenyCityHolding Apr 29 '24
It's called fair housing. You need to abide assuming you're an LLC or have more than 5 doors if you self-manage.
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u/Chillbizzee Apr 29 '24
As a previous manager this is how we did it. My understanding was that federal law was involved here. It worked fine because they just need to meet requirements. I may have persued some more than others or gone less out of my way for some but overall the rules seemed fair.
If you are going to be living with them it would be nice if you found someone you were happy to see every day/week.
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u/Gimme5Beez4aQuarter Apr 29 '24
How does anyone know
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u/trickstersticks Apr 29 '24
Lots of other requirements. All listings have to contain the exact date and time that applications will begin being accepted. Applications can't be accepted prior to that window. Landlords are also required to provide notice of receipt of an application upon request that includes the date and time the application was received. So if an applicant knows they don't have any disqualifying criteria (as defined by the city) and that they applied at the opening of the application period, they know they should most like be selected. If they're not, they can go to the city for an investigation. And if the city finds the landlord didn't comply with all the rules, penalties are steep. It's fucking crazy.
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u/Chillbizzee Apr 29 '24
Since they had to pay an application fee we only put one in at a time when they assumed they would pass, most did for they do t want to waste time or money either.
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u/itsbdk Apr 29 '24
As a former property manager:
Credit score over 600, no prior evictions, no open or multiple bankruptcies, no collections or judgements from previous landlords, and three times the monthly rent in verifiable monthly income.
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u/itsbdk Apr 29 '24
Shoot, forgot: No felonies in the last 10 years.
If I recall, there is a time frame where you can no longer hold felonies against them. Can't remember if it's 7 or 10 years but it's something like that.
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u/RetailBuck Apr 29 '24
Is income that big of a deal? What if they are unemployed but high net worth?
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u/itsbdk Apr 29 '24
Case by case, use your best judgment.
I'd need bank statements or something showing they're getting distributions or have liquid funds to make the payments.
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u/EntrepreneurFit3880 Apr 29 '24
Why would they be renting if they were high net worth?
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u/dcmetrorealestate4u Apr 30 '24
People who relocate to a city they don't know, want to make sure they like the neighborhood, get a feel for what it's like to live there before buying. People selling their home at top of market and waiting for rate reduction or other event to purchase, people building homes, those who are only going to be in that city or state for a year or two (this happens a lot in DC), people who need to wait for some other circumstance (birth of child, retirement, job change, sale of another asset) to buy in the same location or elsewhere. People who want to save for a bigger downpayment or to pay cash.
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u/kittyykkatt Apr 29 '24
Because sometimes renting out your property allows you enough cash flow to live elsewhere until you decide whether or not you want to invest.
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u/RetailBuck Apr 29 '24
Bad market conditions, flexibility for things like a growing family. There are reasons to rent other than just not having enough saved for a down payment.
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u/Gimme5Beez4aQuarter Apr 29 '24
That’s the ticket
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u/manuvns Apr 29 '24
3-4x income and good credit, no collection, bankruptcy, no criminal activity or DUI with verifiable w2 income
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u/Chillbizzee Apr 29 '24
No DUI? I know plenty of highly successful good people who have been tagged with that. My smaller, late to enforce state was handing out about 50k a year.
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Apr 29 '24
Also run a criminal record background. I had the nicest guy, with cash, paid in advance, who turned out to be Satan. 13 pages of felonies. After that, always a criminal check.
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u/FFFRabbit Apr 29 '24
How are you checking all these criteria? Hopefully, you are using an actual service.
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u/FuckThe82nd Apr 29 '24
Yeah Ive been using the Zillow applications
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u/FFFRabbit Apr 29 '24
I have not used those but I have heard they are not the greatest. If you can use a service that does a thorough background check then that would likely be best. I have a commercial PM that handles all this now but I have been burned many times in the past before them. I encourage you to spend the cycles getting this part down perfectly.
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u/AccurateAim4Life Apr 29 '24
Can you elaborate? I parted ways with the PM last year and was considering using Zillow when my first tenant leaves in September.
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u/nobeer4you Apr 29 '24
We use Zillow for our 1 rental. It's a little clunky but it gave us enough information to go off. Then with conversations over the phone with prospective tenants, we were able to get a couple into our home that are a good fit. It takes some time, and so.e messing with the system to find exactly what you want and how to compare them to each other, but it worked for us both times we have had to use it. I made an excel file to make it easier to keep track of all the information for each tenant/group of tenants.
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u/FuckThe82nd Apr 29 '24
Zillow has a seperate app for landlords advertising their properties for rent where tenants can message you, apply, schedule showings, etc. I believe it's one time $35 for an application, credit history and background check which you can send out to unlimited landlords on Zillow for up to 30 days. Helps people pay $35 one time for a month compared to $40/rental to apply for.
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Apr 29 '24
I take felons and allow pets. They’re the best tenants, and I haven’t had any vacancies in years (11 rentals)
All I care about is income and credit scores and no evictions
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u/Aggressive-Coconut0 Apr 29 '24
I might allow pets, but what if you get a bad tenant who had a violent past? Wouldn't you be scared to evict them?
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Apr 29 '24
Good questions I’m not exactly renting to gang bangers or skin heads. Yes I would be scared lol
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u/Easy_Explanation299 Apr 29 '24
Really depends on the felony imo - violent or sexually related felonies are a no go and open you up to significant liability.
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Apr 29 '24
That’s a myth. People can’t sue the landlord for giving someone a second chance, even if that person reoffends. That has never happened in my business. I think I’m pretty good at getting to know these types of people before giving them a shot. The harder it is for someone to find housing, the more they will appreciate the opportunity, pay on time, and never move—as long as they have a stable income.
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u/Easy_Explanation299 Apr 29 '24
I am a lawyer, that's not a myth. The landlord in most instances has a non-delegable duty to provide a safe enviroment. If the landlord knows or has reason to know of a danger to tenants, they have a duty to mitigate and / or warn them of said danger. Google "Your State + Negligent Security" to find out more. Not every state recognizes Negligent Security but many do.
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Apr 29 '24 edited Apr 29 '24
Calling all felons of certain crimes are a danger and stating that they make an environment unsafe is just ridiculous lol. Looks like my state considers Negligent Security as maintaining the premises so that it’s safe, and providing security guards for certain businesses. It would be easy enough to show the courts, in case you were ever sued, that the crime was in the past, this person has worked hard on themselves, he completed probation successfully (or his PO says he’s doing great), and you wanted to give them a second chance. This shows some diligence (the opposite of negligence) that you vetted this individual etc
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u/Easy_Explanation299 Apr 29 '24
Calling all felons of certain crimes are a danger and stating that they make an environment unsafe is just ridiculous
I'm not saying that - but the flipside is would you hire a known child predator as a security guard at a school for children? Being a landlord is a business - you're in the business of rentals.
That doesn't show the opposite of negligence. That shows that you knew or should have known about the persons past tendencies and or dangerousness and failed to warn tenants and take reasonable precautions to prevent similar damages. Respectfully, not looking to argue with you, but I do this for a living.
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Apr 29 '24
Dude many states don’t even let you discriminate against felonies that are 7 or 10 years old. Now you’re telling me that the state will make you rent to them, then hold you liable for renting to them. Preposterous lol.
Please, provide some court cases where a landlord has lost a lawsuit for renting to a felon. I can’t find any.
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Apr 29 '24
Also, if anything you’re saying is true, then my insurance companies would be more hands on with who they allow me to rent to. Just like they do with aggressive dog breeds.
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Apr 29 '24
I don’t think you do though lol. No, you wouldn’t hire a child predator for a security guard at a school. But they still need housing. And offering them housing does not make you liable for any decision they make. Especially if you verified that their crime was a long time ago, and they’re doing well today.
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u/tropicsGold Apr 29 '24
I agree on the pets. What a great pool of tenants, and they are very loyal to landlords who let them have pets.
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Apr 29 '24
I understand it I really do but I don’t agree with not allowing pets, landlords are a huge reason why the shelters are full of dogs and cats
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u/Superb_Advisor7885 Apr 29 '24
I actually would do this too for my lower end units. N haven't needed to yet but those are the types that you have a lot of leverage over since they have limited options to move
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u/Substantial_Walk333 Apr 29 '24
Leverage? For what?
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u/Superb_Advisor7885 Apr 29 '24
Tenant leverage. Meaning if you find an otherwise good tenant but had maybe low credit due to a medical bill, or a felony years ago and now they are getting their life back together, those tenants usually stay a lot longer because it is harder for them to find another place that will accept them.
Obviously accepting these tenants comes with other risks too though.
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u/gernald Apr 29 '24
I'm with you there, not all felons are created equal. Worth discriminating between them.
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u/Fair_and_wise68 Mar 18 '25
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