Landlords/renting

[IOBA]

After a long journey, we find that we will need to rent out part of place, if not our entire house.  We understand credit challenges and financial foo-foo's maybe better than most landlords.  

As part of the selection process, we will be pulling credit reports (through an authorized company) and doing background checks.  We know FICO score isn't everything.   Things happen.

What are your thoughts and suggestions for working with people with less than stellar credit?

-- would you disclose problems before credit is pulled?

-- would you be willing to have your rent deducted from your check?  (some companies allow "allotments"/bills to be paid directly from your paycheck)

-- would you be willing to set up rent payment as a bill pay?

-- would you be willing to pay a higher deposit?

-- if there was a job loss, or a mistake with your paycheck, would you be willing to talk to your landlord about it?  (some people feel the landlord doens't need to know)

-- would you volunteer that you took in another family member, a friend, or a room-mate to help out?

Please share your thoughts with us.  

[KimberH]

IOBA

I know when things happened on our end, we always disclosed upfront. We own so we did not have a landlord to deal with but when we decided to shut our business down and go back into corporate, we disclosed to our prospective employers that we did have a lower score. (Pre employment credit check). He had to have one because he travels 90% of the time (and uses a company CC), and I work in accounting so I did as well.

I think it is only fair for the prospective renters to go "hey, my score is not perfect and this is why...". I think you can also tell by someone's CR that they are either a chronic slow or non payer or someone just hitting a bad spot in the road (we had perfect credit history until the last year of the business). It took another 1/2 year to catch everyone up and now 2 1/2 years later, we have never been late and have paid off a lot of the debt.

I think having rent deducted from their check is a good idea - but that is just me.

I would disclose a job loss with the LL but it is hard to say as far as anything else.

Not sure this helps! Good luck!

[Uborrow-Upay]

IOBA, you need to get them to add a responsible party onto the lease to guarantee payment. 

If their family or friends don't have enough faith in them to guarantee the lease so they can get a place to live, pass them by.  Sounds cold, but if you want to be a landlord, you've got to know that once they take possession, getting them out for non-payment can be difficult...and expensive.

But if you want to go the "faith in people" route, just follow your gut feeling.  I think your gut will be able to tell you if you're going to get hosed or not in the long run.  It's better than anything they'll agree to or sign just to get in the door.  Follow your gut.

For what it's worth, most of the better tenants that I've had have been selected by my gut feeling about their character, even when their credit was bad.  I value character over credit reports any day.  But that's just me.

Happy landlording! 

[Shane1]

I wouldn't put too much stock in credit reports for the purposes of renting. When I started renting again, I had chargeoffs with every major bank (among others). That was after my business failed and had nothing to do with my rental history, which I had the references to back up as being good. Aside from my credit problems, I was an ideal candidate, a quiet, single person who was rarely home, non-smoker, with no pets, steady income, and no prior issues paying rent.

I would disclose problems before credit is pulled. Not necessarily any details, just that my credit is not good and what went wrong. No sense wasting time with somebody who believes good credit is a key criteria. Even now that I have good credit, I would take someone stressing good credit as important to be a red flag. If they're that picky about credit, what other hassle are they going to give me? Also, to me there's a matter of principle. If somebody would have rejected me a few years ago, I'm not so sure I'd want to deal with them now when nothing's really changed but a number.

I would not want rent deducted automatically. Billpay's not a bad idea, though. Paper checks are so retro.

I would possibly be willing to pay a higher deposit. Depends on what other landlords in the area are requiring and what you want to begin with (rest assured your house is not my first stop and probably will not be my last). If you want first, last, and one month's security, there's not much more you can realistically expect to push it.

I would discuss job payment issues to the extent that it's relevant to my ability to pay the rent.

I would volunteer any information about an extra housemate, assuming it is relevant to the lease, which it typically is.

Cosigner = no.