Help with prospective new tenant-longish

for my condo in az.

My current tenant is moving out. I am very sad since she was the best tenant ever.

So I have someone else interested. Relocating with her mom from N. California. She just graduated college and will attend a graduate program in Phoenix but her mom will be financially responsible. Keep in mind that this is Phoenix where my condo is worth 1/3 of what I paid. Nice, I know..worst decision of my life...

Income. She gets $450 a month disability, $600 a month from one of her own rental properties and $2000/mo from people she rents parts of her own home out to who all have leases. So about $3K a month in income. Her credit score is excellent and according to the background and credit check, no debt (not even a mortgage comes up) and no criminal issues. She still owns her home in CA and will continue to rent it out. I guess she is paying utils and taxes and maintenance.

The rent is $850. Utils are about $150 a month in the hottest months. The complex took the application and ran everything and she got approved without issue and their criteria is $2500 in income to rent a unit like mine. She passes. Keep in mind that is unusual..that part of the country took a big hit housing and job wise. People are really struggling.

I had one tenant that destroyed my place and he had a solid job with Verizon making more than I did so he passed too but ended up being a jackazz. So it may not be all about money.

I feel I need to verify her income sources. Her daughter who I have been dealing with offered to send me copies of her tenant's leases. Can I ask for bank statements? What else should I ask for? Tax return? I will ask the mother about the mortgage on her own home in CA and what her expenses are. They seem very nice and even knew from what the complex said that since her income is rental income for the most part it may be tough to get someone to rent to them.

I guess I could also ask for more security.

If you got this far, thanks for reading.

Re: Help with prospective new tenant-longish

It sounds like your main concern is the stability of the potential tenants' income, since it's mostly rental income (as opposed to someone with long-term employment at a well paying job).

I think it's within your right as a landlord to ask for more information. Have the renters of your tenants' income properties been there a long time? Do they pay on time? Since your tenants' income is dependent on their tenants' reliability, I would ask those questions. I would ask for bank statements, to verify the income, and also to see how much savings they have. That way, you will see if they have a cushion in case they lose a source of their income. If all of their income is reported, then you may want to ask for tax returns, too. Whether or not they want to provide all of that info is up to them, but it's certainly not unusual for landlords to request it as part of a rental application.

If your potential tenants have rented before, I would ask for previous landlords' contact info so that you can call them to confirm they paid rent on time and left the property in good condition.

If your concern is simply about the income, I wouldn't ask for extra security. The security is only to safeguard against damage to the property beyond normal wear and tear, and otherwise should be returned. I think it makes sense to ask for extra security if there is a pet in the picture, or perhaps other circumstances that indicate the condo itself is at risk.

Ultimately, it's up to you to decide if you are comfortable renting to these people. But as you know from your last experience, despite your due diligence, there is always some risk in being a landlord. Someone could have a fabulous job and lose their job in a heartbeat, or become unable to work. If qualified tenants are hard to come by and you really need to rent it, then this may be the best thing.

Could you do a shorter term lease as a trial period if you still have doubts? Maybe 6 months instead of a full year, for example? Or even a month to month rental?

Good luck!

Re: Help with prospective new tenant-longish

However, in today's economy, a full-time job may be a less reliable form of steady income than rental income.....

Re: Help with prospective new tenant-longish

I'd ask for lease copies and two cancelled checks for each lessee. If they are paying their rent in cash, then bank statements.

ETA: Forgot you need to get the landlord's info. I would just ask for some sort of verification that the tenants are paying their rent. If you cant get check images then you need bank statements.

Message edited 10/13/2011 9:40:50 AM.

Re: Help with prospective new tenant-longish

Thanks.

I've asked for canceled checks, bank statements and copies of leases. Also since her mortgage didn't come up on her present home (which she is keeping and renting out) I asked for something that shows her mortgage. Her exhubby may be on the loan but she may be on the deed. They did say their credit check showed the mortgage but mine didn't. They are sending me that credit check too.

They seem very upfront about everything and don't seem to mind providing me with what I need.

I will have more info tomorrow.

Meanwhile I have gotten a few calls already for it and it's only been listed a week.

We'll see. I hope I get someone like my former tenant. That rent was never late and she took great care of the place even giving me her washer and dryer from her house when she moved in. It was definitely an upgrade.

Message edited 10/13/2011 4:47:39 PM.

Re: Help with prospective new tenant-longish

Posted by GoldenRod

However, in today's economy, a full-time job may be a less reliable form of steady income than rental income.....

Re: Help with prospective new tenant-longish

I would be concerned about the rental income being the main source of income. What if she gets a bad tenant, she won't be able to pay you rent. I personally would think too risky.

Re: Help with prospective new tenant-longish

Re: Help with prospective new tenant-longish

Her tenants have been with her 30 years, 20 years and 5 years respectively. She is renting out her home when she moves as well.

She lives in Sonoma..holy desirable batman!

She provided all bank statements and her IRA statements. Full disclosure. We had a long chat and she is very down to earth.

Well it could all look good and implode anyway but I have a good feeling.

Wish me luck. I hope she is as good as my former tenant.

Re: Help with prospective new tenant-longish

well that is a bust. They thought my lease was too restrictive.

I drew up a 12 month and they wanted a 6 month and i wanted 2 months rent to break the lease and they wanted a flat fee of $800.

I checked with the complex and they do the same as I stipulated in the lease. My type of apartment is in demand is I'm sure I'll get someone.

Also, I found out I could get more rent.

I'm not wasting any more time on these folks.