A Tale Of 3 Applications

Posted on February 28, 2008 by Melissa
Filed Under Housing, Rental Property

Only one may hold the key… In our search to find tenants for our rental property we have received 3 applications. Of course, we have had many more visitors and serious inquiries but 3 people actually completed an application and gave their deposits to rent the property. That step is what separates the “serious” from the ready to rent.

These are just summaries that only scratch the surface. Each application and situation was very detailed and required looking at the file as a whole to determine if they were the right fit.

Here are their stories and outcomes:

Application #1 – An extended family down on their luck

It was a family of 5; the mother and father, the daughter and her fiancé in their 20’s, and their baby. The mother and father had low credit scores (low 500’s) and scads of collections but when I saw that the majority of them were medical (she had cancer) I didn’t hold those against them. That sort of situation could happen to any one of us, no matter how well we plan.

Pros:

Parents have a good rental history and no evictions
Parents had verifiable and steady incomes
Majority of collections were from medical bills
Likely to be long-term renters

Cons:

Younger couple had no credit, rental, or employment histories
Several bills went to collections starting in 2008 (brand new and non-medical)
Fiancé has a criminal record with multiple offenses (one within the past year)
Two large breed puppies, so damage to the home and yard is very likely
Parents have large amount of debt and payments
Our property rents for $525 more than what they currently pay

Outcome: They were declined on the recommendation of my management company

It was determined, based on their current financial situation, that they wouldn’t be able to afford the increased rent without additional income or reduction of debt. This is especially a concern since they were taking three possible dependants into the household (the younger couple were living with the fiancé’s parents at the time). The fiancé claimed to have employment but that income could not be proven and therefore, couldn’t be considered.

Application #2 – A couple needing to find a place immediately

This couple was in their 40’s and was in a strange situation. Their landlord lost his job and needed to move back into the home they rented. Our manager spoke to the landlord and confirmed the story. We have no idea what kind of notice they had or the details behind it, but they applied on a Monday and had to move in that Wednesday.

Pros:

Good rental history and no evictions
Both people had comfortable steady incomes and could easily afford the rent
They wanted to move in quickly
They had one small dog

Cons:

Some fresh collections in 2008, including tax liens and late child support
Tons of past collections that were written off as losses
Lowest credit scores yet - low 400’s
Must get approved and moved in within 2 days – pressure to expedite process

Outcome: We approved with conditions, they rejected the conditions and withdrew

They had strong incomes so we decided to give them a chance as long as they would agree to pay an increased security deposit (1.5 months rent) and set up direct deposit. We felt the additional deposit would help cover some losses if they stopped paying rent and had to be booted, especially since it appeared that they stopped paying some bills recently. They said they knew they had credit problems but didn’t feel they should be penalized for it and withdrew their application.

It’s definitely for the best. Now I wonder if the story was fabricated in an effort to rush through the application process. There is no way they would have been able to find another home, get processed, and move in less than one day. Something sounds fishy.

Application #3 – Young family moving to town for new jobs

This family was a couple in their 30’s with a toddler and a baby. She is an RN scheduled to start work this month at the new hospital close by. He is a construction manager who was recently laid off but still on severance pay. He is looking for a new job in town.

Pros:

Good rental history and no evictions
Currently own a home, it is pending sale and scheduled to close in a few weeks
Good employment history, able to provide pay stubs
No past dues, no collections, credit scores in high 700’s
$22K in savings
One small dog

Cons:

Wife starting new job, Husband is currently unemployed
One income will not cover the rent and other bills

Outcome: We approved them with no additional conditions

They are likely short term renters just wanting to get settled in a new town before they find a home of their own. I don’t see anything wrong with short term renters as long as the term is no less than a year. Although her salary alone isn’t enough to cover rent plus their expenses, the money they have in savings will make up for his temporary unemployment. Our area hasn’t been hit with the same decline in new home construction so hopefully he can find a new job in his line of work here.

It looks like we got lucky and snagged a new-to-town family with good scores!

Our manager has drawn up a lease agreement is working with them to get everything finalized. Hopefully it will work out this time and this will be the last application we process for at least 12 months.

If all goes well, we will have had the home on the market just shy of a month before finding a tenant. That isn’t too bad!

Image Source: takacsi75

Comments

One Response to “A Tale Of 3 Applications”

Carol on February 28th, 2008 6:52 pm

We have rental property and plan to buy another in about a month. We did not run credit checks on our tenents and have not had a problem. One is rented to a go-getter woman single with a six year old and her sister with a one year old and a three year old. They are happy to have a house and have paid rent on time. The cottage is rented to a 62 year old man who does not speak English but my husband speaks Spanish. We plan to buy another duplex to rent to my daughter and rent out the other.

Carol

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