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How to Choose a Potential Tenant for a Rental Property

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    How to Choose a Potential Tenant for a Rental Property

    DH and I own a single-family home in So CA that has been a rental property for the last 10 years. It was our primary residence, but we moved into DH's family home in the same neighborhood when DH in law had passed. We have had several renters in the last 10 years and the experiences have mostly been good. The market was such at the time that we did not have a lot of people showing interest or we rented to a friend's stepdaughter, etc. even if their credit was not spectacular. Now the rental market in our area seems to be in extremely high demand. This is probably because prices here are still in the 6 figure range and may be out of reach without a substantial down payment. I listed the property on Zillow and showed the home for the last few days (appointment only) and the phone is ringing off the hook! Some are offering higher rent and others are offering to pay 6 months in advance. I know this probably means that it was priced too low, but that is what it is (at least we have no mortgage). I have had 6 serious applications and will choose between those candidates. I did get additional applications without being contacted for a tour but I have chosen to ignore those. 5 of the candidates have verifiable incomes of at least 2.5X the rent (up to 12X the rent) and great FICO scores in the high 700s and in the 800s. The applicants vary from a single man to married couples with children, single Mom with kids; to grandparents, to a BF/GF couple. We met all of them in person. They have different reasons for wanting to rent the home -- one guy has kids living in the same neighborhood with their Mom; others like the area for the school district, etc. I want to be careful not to violate any fair housing laws. But aside from finances, any tips on how to choose? I know we will probably not go wrong with any of the choices..........

    #2
    Congrats on so much interest! I'm not familiar with CA laws specifically, but generally speaking, you need to have a specified set of criteria and by fair housing law you must accept the first qualified applicant. A number of things you listed are good criteria (income 2.5-3x the rent is standard) while others you listed cannot be considered in your evaluation (marital status, kids). Other criteria you might consider could include might be no prior evictions, no felony charges within the past X years, verifiable rental history, etc. I do not use credit score as a criteria but many landlords do.

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      #3
      Be sure you understand what your state's laws are regarding fair housing practices, because they vary somewhat. At the federal level, the big ones you can't consider are gender, color/race/ethnicity/national origin, religion, family status, and disability. Some states add age, sexual orientation/identity, or perhaps a couple others.

      - Your stance on pets or smoking may be an immediate discriminator (exception: service animals, per disability as a protected class).
      - Criminal & credit background checks are important, but as with riverwed, I only concern myself with any actual negative events on the credit history (BK/foreclosure, overdue loans, late payments, tax liens, over-extended credit relative to verified income, etc.) -- not the credit score itself.
      ​​​​​​- If any of these are the ones offering higher than asking rent, that is certainly a valid discriminator, as long as it's within reason for their income.
      - Employment & rental history -- don't be afraid to actually call & check their references. What you're looking for in both cases is stability (3-5+ years vs. jumping around every 6-12 months, unless explained by education or other external factors), reliability (payment/work product on time), trustworthiness/character, and no problems reported by prior landlords (eviction, property abuse, constant complaints, etc.)... or strongly positive recommendations from them too!

      An important point is to be clear & explicit about the manner in which you select a tenant. For the people you have to deny, send them a written denial notice with the reasons you didn't choose them, what your evaluation criteria are, and explicitly state that your choice was made in line with state & federal fair housing laws. In this case, your applicants may have no negatives, but you simply had to choose one of many well-qualified applicants... And you can tell them that too.
      Last edited by kork13; 10-04-2021, 08:38 AM.
      "Praestantia per minutus" ... "Acta non verba"

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        #4
        Thank you for the feedback! I am checking on CA laws right now -- so far it looks like it is recommended (but not law) to take the first qualified applicant versus out of order so that discrimination cannot be alleged. I did indicate no evictions, bankruptcies, etc. I did state a credit score of 650+ and that is not an issue. A few candidates had some credit issues during early COVID but that does not apply to the first 3 applicants. As soon as I confirm, I guess I have my answer! Thank you again!

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          #5
          Kork13 -- thank you for the additional info. No pets and No smoking is not an issue here in CA. Of course, support or service animals are allowed without an additional pet deposit. Initial screening all done though Zillow and everyone has passed a background check. The employment is the only thing left to confirm. The first 3 applicants did provide uploaded documentation to support their current work history. The interesting thing is that a few applicants did not upload backup documentation and only self-reported which means nothing. A few of them provided screenshots of bank balances from their phone and some do not even show their name on the screenshot. Sigh................self-employed individuals need to provide proof via tax returns in order to verify income. One young lady indicated that she earns $24000 a month as a model but I have no evidence to support the finances.

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            #6
            Originally posted by SavingBucks View Post
            Thank you for the feedback! I am checking on CA laws right now -- so far it looks like it is recommended (but not law) to take the first qualified applicant versus out of order so that discrimination cannot be alleged. I did indicate no evictions, bankruptcies, etc. I did state a credit score of 650+ and that is not an issue. A few candidates had some credit issues during early COVID but that does not apply to the first 3 applicants. As soon as I confirm, I guess I have my answer! Thank you again!
            Depending on the pace of applicants, I wouldn't necessarily follow "first qualified" 100% of the time... "Best qualified" is still totally valid, as long as you can clearly justify your decision. Like if you receive 10 applications within a couple days, I would probably take the liberty of being at least a little more discriminate, to find the best qualified of those first few applicants. But yes, 'first in line' is a common practice to follow.

            For the employment verification, that again best comes down to calling their references, one of whom should basically ALWAYS be their current employer (or 2-3 years of tax returns for self-employed).
            Last edited by kork13; 10-04-2021, 09:01 AM.
            "Praestantia per minutus" ... "Acta non verba"

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              #7
              Originally posted by kork13 View Post
              Your stance on pets or smoking may be an immediate discriminator
              Seriously? Are there actually places where you are legally required to allow pets and smokers in your rental property? If so, that's outrageous.
              Steve

              * Despite the high cost of living, it remains very popular.
              * Why should I pay for my daughter's education when she already knows everything?
              * There are no shortcuts to anywhere worth going.

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                #8
                Originally posted by disneysteve View Post
                Seriously? Are there actually places where you are legally required to allow pets and smokers in your rental property? If so, that's outrageous.
                No, absolutely not! (gratefully.) Though if someone has a valid disability requiring the use of a service animal (blindness, for example), such an animal cannot be considered in rejecting or accepting a tenant, and cannot be barred from the property.

                Maybe I wasn't clear with my post... the first thought about the legal restrictions was independent from the bullet points. I only meant that if a landlord, by policy, bars all pets & smokers, that is an easy way to eliminate potential applicants... The rest of those bullets were other methods by which to decide upon which applicant to accept.
                "Praestantia per minutus" ... "Acta non verba"

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                  #9
                  So while we're on the topic.

                  kork13 , In your view, does "no smoking" mean no smoking of any kind?

                  In a lot of parts of the country, Marijuana has become legalized, and its not always clear what the rental housing laws are around pot use.
                  james.c.hendrickson@gmail.com
                  202.468.6043

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                    #10
                    Originally posted by james.hendrickson View Post
                    So while we're on the topic.

                    kork13 , In your view, does "no smoking" mean no smoking of any kind?

                    In a lot of parts of the country, Marijuana has become legalized, and its not always clear what the rental housing laws are around pot use.
                    To my knowledge, there's no state that legally protects the right of rental tenants to smoke any variety of drug, whether tobacco, marijuana, or otherwise. If the rental agreement states a zero-tolerance policy for smoking in/on the property, a landlord has every right to reject, penalize, or evict tenants who do so.
                    "Praestantia per minutus" ... "Acta non verba"

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                      #11
                      Originally posted by kork13 View Post
                      To my knowledge, there's no state that legally protects the right of rental tenants to smoke any variety of drug, whether tobacco, marijuana, or otherwise. If the rental agreement states a zero-tolerance policy for smoking in/on the property, a landlord has every right to reject, penalize, or evict tenants who do so.
                      I would certainly hope landlords can ban smoking.

                      I wonder about medical marijuana though. Could a tenant claim that’s protected? I hope not. No way I’d want my rental property reeking of pot.
                      Steve

                      * Despite the high cost of living, it remains very popular.
                      * Why should I pay for my daughter's education when she already knows everything?
                      * There are no shortcuts to anywhere worth going.

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                        #12
                        I'd like to ban all smoking of any kind, but I too am unsure about medical marijuana. I hate smoke in rentals or hotels so I would hate to be the next renter. You'd have to paint and tear out carpet because I swear I can smell it even after it's been cleaned.
                        LivingAlmostLarge Blog

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                          #13
                          I would think that a marijuana medical smoker would have to provide proof of medical need and is probably covered through ADA. I will look into that, although no applicant has mentioned it. Recreational marijuana smoking would not be allowed under a "No Smoking" clause.

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                            #14
                            I am very upset at Zillow at the moment. They backlist to hotpads and Craigslist. Someone hacked into the Craigslist listing this morning - rental amount cut if half, dog & cats OK, etc. Email address is one that does not exist (fortunately). I do not have a Craigslist account and cannot change or delete it (as far as I know). I did send an email request to Zillow on this issue (of course, no good phone number that I could find). Someone sent me an email letting me know -- because she knew I would be a complete idiot to rent at such a low price point! Grrr....

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