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Old 04-16-2012, 08:00 PM   #1
 
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Default Would you rent to these people?

I am torn with a decision I need to make.
I am looking to rent my house. I need income from the house to cover the mortgage and repairs. The asking rental price covers would cover both.
I got these prospective tenants. Husband makes 198k, director of HR. YOu would tend to think this is great...

I got their credit check paper work and....
They always pay their mortgage late 2 or 3 months. Everything else perfect ( cars, school loans, cc) on time. They have had the house for 5 years, credit only shows 24 months of payment history. They are having their house sold in a corporate buyout.

I initially said, no way, they will pay late to me too. As a "joke" i told the agent that I would rent if they pay one year in advanced.
Well they said they would pay 6 months in advanced. My mom thinks it is fine. Their payments are lower and I am getting half the amount ahead. I can'[t wait that long, I need to rent the house but I don't want to ruin MY redit with this deal. I have to pay where I live too. My salary and my bf's salary wouldn't be able to cover both in case they pay late.

Would you rent to them with the 6 month advance?
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Old 04-16-2012, 08:47 PM   #2
 
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I am torn with a decision I need to make.
I am looking to rent my house. I need income from the house to cover the mortgage and repairs. The asking rental price covers would cover both.
I got these prospective tenants. Husband makes 198k, director of HR. YOu would tend to think this is great...

I got their credit check paper work and....
They always pay their mortgage late 2 or 3 months. Everything else perfect ( cars, school loans, cc) on time. They have had the house for 5 years, credit only shows 24 months of payment history. They are having their house sold in a corporate buyout.

I initially said, no way, they will pay late to me too. As a "joke" i told the agent that I would rent if they pay one year in advanced.
Well they said they would pay 6 months in advanced. My mom thinks it is fine. Their payments are lower and I am getting half the amount ahead. I can'[t wait that long, I need to rent the house but I don't want to ruin MY redit with this deal. I have to pay where I live too. My salary and my bf's salary wouldn't be able to cover both in case they pay late.

Would you rent to them with the 6 month advance?

I would, but I think I would ask for a hefty security deposit as a backup in case they screw you on month 7.

An acquaintence of mine who owns and rents a lot of property uses a system to guarantee prompt rental payments. She offers a "discount" for on-time payment. $50-$100 off the rent if they pay by midnight of the 1st of the month. And she fines them $50-$100 if they pay past the 5th of the month. Most of her tenants pay on time. She says she marks-up the rent $50-$100 to compensate for the discount, so it's not really a discount at all.
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Old 04-16-2012, 09:05 PM   #3
 
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I thought of doing the discount thing. I also though of payroll deductions but I don't know if it is possible. The is the head of HR so I guess he can do whatever he wants on his paycheck deductions. Thanks for the suggestion.
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Old 04-16-2012, 09:13 PM   #4
 
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It's possible they were paying late on purpose so they would qualify for a loan modification on a house they were upside down on. Five years ago was the height of the housing boom so they probably paid way more than it's worth now. That would also explain why they have enough of a cushion in their savings to cover 6 months of rent.

I'd probably rent to them if they otherwise check out.
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Old 04-16-2012, 10:05 PM   #5
 
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It's really hard to tell from how someone looks on paper. I remember from when I was managing properties. Some with the spottiest history were the best payers and some of those with the best history/credit report were the worst payers.
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Old 04-17-2012, 05:19 AM   #6
 
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It's really hard to tell from how someone looks on paper. I remember from when I was managing properties. Some with the spottiest history were the best payers and some of those with the best history/credit report were the worst payers.
But how can this be ? They would fix their credit temporarily when they know they want something? Or they screw landlords because rentals typically don't get reported?
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Old 04-17-2012, 06:09 AM   #7
 
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Yes, I would rent to them. 6 months in advance and maybe even a security deposit. Seems like ur getting the better part of the deal. Although if ur truly that torn, maybe u should rent to someone ur more comfortable with. I'm sure another LL will pick them up and u could find a couple ur comfortable with.
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Old 04-17-2012, 09:27 AM   #8
 
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It's really hard to tell from how someone looks on paper. I remember from when I was managing properties. Some with the spottiest history were the best payers and some of those with the best history/credit report were the worst payers.
But how can this be ? They would fix their credit temporarily when they know they want something? Or they screw landlords because rentals typically don't get reported?
We didn't run the credit report, just job verification and something else (can't remember). Sometimes the person with the spotty job/housing history, late to appointments, etc. was more consistent in paying than the person with the great job, good history, etc...

and yes, not all rentals report to the CRA.

I think the 6 months in advance is really is good. So will they give the 6 months now and not pay rent again until October? Is that the plan? Do can/can you have enough reserve (by Oct) to pay at least 2 months in case something goes wrong?
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Old 04-17-2012, 10:16 AM   #9
 
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It's really hard to tell from how someone looks on paper. I remember from when I was managing properties. Some with the spottiest history were the best payers and some of those with the best history/credit report were the worst payers.
But how can this be ? They would fix their credit temporarily when they know they want something? Or they screw landlords because rentals typically don't get reported?
We didn't run the credit report, just job verification and something else (can't remember). Sometimes the person with the spotty job/housing history, late to appointments, etc. was more consistent in paying than the person with the great job, good history, etc...

and yes, not all rentals report to the CRA.

I think the 6 months in advance is really is good. So will they give the 6 months now and not pay rent again until October? Is that the plan? Do can/can you have enough reserve (by Oct) to pay at least 2 months in case something goes wrong?
You have to ask for a security deposit. A big one. You can ask for any amount you like but you will have to pay interest on what you return to them on anything over the amount of one month's rent (at least out here).

Ask for a big security deposit instead of asking for 6 months rent up front...because that's all gone on the 6th month and you have no protection after that. With a security deposit, you always have that cushion.

What is a "corporate buy out?" Are they going through a foreclosure?

Look at their record to see if they've been evicted before or have any judgments against them. Do a $20 search in FABCO to see if they've been bad tenants before.

Does the wife work? I feel better when there are two incomes in this economy.

Please be prepared to pay both house notes in case they default!

I offer discounts and penalties, too (on my nonSection 8 houses) but it means nothing if a person loses his/her job or loes some other part of his/her income. You need to have a big cushion up front and start the eviction process immediately if they are more than 5 days late (ask for an expedited hearing).

It took me 2 months to get my last deadbeat out and then another month to repair and re-market the property. Guess who was paying the note during that time.

Are they interested in doing a lease w/ option to buy? You can ask for more money up front then.
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Old 04-17-2012, 11:59 AM   #10
 
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It sounds like the hubby just got a really good job and the new company is giving him a generous relocation package which propably includes moving expenses and 6months - 1 year of rental costs (at least that what people I know that have gotten relocation packages get). Since he's head of HR, he also got some other higher level perks which includes the company buying his house and absorbing the loss and then reselling it later which isn't unsual for a lot of companies to do for VPs.

I agree, get a security deposit on top of the advance rent...OR take the 6 months upfront and then cut the rent in 1/2 (so they pay 1/2 of the listing price) monthly. That way, you are still getting monthly "rent" and if they don't pay you can STILL start eviction proceedings immediately instead of waiting til month 7 to see if they pay.
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Old 04-17-2012, 06:04 PM   #11
 
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Well I told them yes but I didn't hear from them today.

A corporate buyout means the company ( big pharma) buys their house.

I am asking for a month and a half security. That is the most you can ask in NJ or so the agent told me.

I plan to have them pay half rent over 12 months. Figure it is safer.

spiederlashers Looks like FABCO is only for OH?
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Last edited by violets; 04-17-2012 at 06:14 PM.
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Old 04-18-2012, 08:10 AM   #12
 
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Well I told them yes but I didn't hear from them today.

A corporate buyout means the company ( big pharma) buys their house.

I am asking for a month and a half security. That is the most you can ask in NJ or so the agent told me.

I plan to have them pay half rent over 12 months. Figure it is safer.

spiederlashers Looks like FABCO is only for OH?
It sounds like an expensive house and I would feel very uncomfortable having only one and half months' deposit w/ these people.

Can you ask them why they have only 24 months' of payments on record?

Can you call their leinholder and ask what the story is w/ them?

Did you run their credit?

I would call FABCO (or similar) and ask which agency does tenant screenings in their state.
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Last edited by spiderlashes5000; 04-18-2012 at 08:12 AM.
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Old 04-18-2012, 09:22 PM   #13
 
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see below


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Well I told them yes but I didn't hear from them today.

A corporate buyout means the company ( big pharma) buys their house.

I am asking for a month and a half security. That is the most you can ask in NJ or so the agent told me.

I plan to have them pay half rent over 12 months. Figure it is safer.

spiederlashers Looks like FABCO is only for OH?
It sounds like an expensive house and I would feel very uncomfortable having only one and half months' deposit w/ these people.
It's not that expensive for NJ. .
Can you ask them why they have only 24 months' of payments on record? That's the detail on the credit report. Trans Union. I see there is more.

Can you call their leinholder and ask what the story is w/ them?
Call the mortage company ? They probably wount talk to me. It is not my account.,
Did you run their credit?
no, the agent did and mailed it to me.
I would call FABCO (or similar) and ask which agency does tenant screenings in their state.
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