Anonymous wrote:

Anonymous wrote:There is nothing perfect about this tenant. I am not sure about the legality of turning him down but if you can do so legally I would.

Op here. He agreed to have his dad co-sign but it’s the same issue of self-reported income for their family owned business and yeah I could get tax returns but honestly I feel like it’s too risky in covid for small business owners to not get bad luck and be unable to pay the rent (and then I’m screwed cuz covid restrictions and cuz it’s be a hassle to evict even in non covid times). So... I just want to say no to this person. I can legally do that, right? “Sorry your credit report and documentation provided to not meet my tenant criteria, even if dad co-signs, it’s not a good match.” Is that acceptable?

Yes.

You should have a list of tenant criteria available, but you do not need to offer it.

Anonymous wrote:There is nothing perfect about this tenant. I am not sure about the legality of turning him down but if you can do so legally I would.

Op here. He agreed to have his dad co-sign but it’s the same issue of self-reported income for their family owned business and yeah I could get tax returns but honestly I feel like it’s too risky in covid for small business owners to not get bad luck and be unable to pay the rent (and then I’m screwed cuz covid restrictions and cuz it’s be a hassle to evict even in non covid times). So... I just want to say no to this person. I can legally do that, right? “Sorry your credit report and documentation provided to not meet my tenant criteria, even if dad co-signs, it’s not a good match.” Is that acceptable?

Landlord here.

Two approaches:
1. If you want the tenant, tell them you'd like to have them, but they don't qualify due to their credit report. Too much debt. Ask them if they can offer up an idea on how to handle this. For example, having their parents co-sign, or paying some months in advance or a larger deposit. Beware that in many states, there is a statutory limit of 1 or 2 months rent as deposit. In that case, just reword the lease so it's paid quarterly (again, check the rules), so you have 3 months up front each quarter.

2. Deny. Sorry, you did not pass the credit check. That's it.

It’s possible he maxed out the credit cards in order to grow his business. I’d consider it if his parents co-sign.

Anonymous wrote:

Anonymous wrote:Op here. The tenant screening is from SmartMove. They do provide a credit report and it shows a couple maxed out unpaid credit cards and other balances exceeding limits, but the person does pay on time the few accounts that he does pay on. He is a mid-20s young professional and past rent history is living with parents.

What specifically would you ask for to prove income?

Three months of pay stubs.

If he can pay first, last, and deposit, and if he agrees to direct deposit, then I think that limits your risk somewhat.

So the prospective tenant has more than 2 credit cards he is not paying and balances exceeding limits. A single person in their twenties wanting to rent a house rather than rent a 1 bedroom apartment? Why? Obviously the parents don't know about these financial problems or if they do know aren't helping pay off/pay down the debt. Wait for a better prospective tenant.

Anonymous wrote:There is nothing perfect about this tenant. I am not sure about the legality of turning him down but if you can do so legally I would.

Why would it be illegal to turn down an applicant with poor credit?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op here. The tenant screening is from SmartMove. They do provide a credit report and it shows a couple maxed out unpaid credit cards and other balances exceeding limits, but the person does pay on time the few accounts that he does pay on. He is a mid-20s young professional and past rent history is living with parents.

What specifically would you ask for to prove income?

I would say his parents needs to co-sign the lease.

This is the only way.

Post-college, I had strong income from a salaried job and really low credit card usage--but for a bunch of years my parents were ALWAYS required to co-sign my leases. They never blinked when asked to do so (perhaps chiefly because they knew I would never have to ask them for rent money, ha) and I didn't think anything of it.

I'd suggest requiring the same for most young 20-somethings, but especially in this case.

Same. My parents were required to co-sign my leases for the first 4-5 years I was out of college. I didn't have bad credit, just a smallish income and limited rental history. I think it's common.

I would not rent to this person without a cosigner on the lease. If he won't do that then move on.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op here. The tenant screening is from SmartMove. They do provide a credit report and it shows a couple maxed out unpaid credit cards and other balances exceeding limits, but the person does pay on time the few accounts that he does pay on. He is a mid-20s young professional and past rent history is living with parents.

What specifically would you ask for to prove income?

I would say his parents needs to co-sign the lease.

This is the only way.

Post-college, I had strong income from a salaried job and really low credit card usage--but for a bunch of years my parents were ALWAYS required to co-sign my leases. They never blinked when asked to do so (perhaps chiefly because they knew I would never have to ask them for rent money, ha) and I didn't think anything of it.

I'd suggest requiring the same for most young 20-somethings, but especially in this case.

Anonymous wrote:

Anonymous wrote:Op here. The tenant screening is from SmartMove. They do provide a credit report and it shows a couple maxed out unpaid credit cards and other balances exceeding limits, but the person does pay on time the few accounts that he does pay on. He is a mid-20s young professional and past rent history is living with parents.

What specifically would you ask for to prove income?

I would say his parents needs to co-sign the lease.

This is the only way.

There is nothing perfect about this tenant. I am not sure about the legality of turning him down but if you can do so legally I would.

Anonymous wrote:Op here, how would you word your denial email to this tenant?

You just tell him that you are not able to rent to him at this time. I would not give an explanation if you don't have to. If you really feel like you must, you say that you are unable to rent to him because of his lack of rental history and history of account overdrafts/overcharges.

Or have his parents co-sign, or have him put a year's worth of rent into an escrow account. And get first/last/security deposit.

Op here, how would you word your denial email to this tenant?

You are running a business.
Think of it this way - would you send 1 year of product to this persons company? Would you be comfortable that they would pay you? This is what you are doing.

Based on the persons history of paying other businesses (credit cards) what he owes them on time, I would not take this risk.

If you have no other options for renting the property I would either have his parents sign the lease.

Collecting as much cash up front as your jurisdiction allows would not be a route I would take. I would assume the $ is from the parents (and they are paying to get him out of the house) as if he had the cash why is he not paying his bills?

I generally have young renters' parents on a lease. Never had a problem.

Anonymous wrote:He lives at home rent free and yet doesn’t pay his bills on time? Avoid like the plague.

He may be very nice but he is not a risk I would be willing to take on.