How Do I Screen Tenants in Low End Rentals? [
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- Опубліковано 3 тра 2015
- www.biggerpockets.com/renewsbl...
In this episode of the #AskBP Podcast, learn how screening tenants can change slightly depending on the kind of property you are screening for. You'll learn the screening processes Brandon is willing to compromise on, and the few that he absolutely won't! If you rent to tenants in the "sub-$800 per month" rental market, this is a can't-miss episode! - Навчання та стиль
No matter how cautious you are in screening, bad tenants are in abundance. My way is to check income, how long they've been there, if they seem ghetto, is their car messy. If they stop paying, be quick to start court. KNOW THE COURT SYSTEM AND DO IT YOURSELF! I bank on the fact that no matter how bad a tenant is, no one wants to move, so starting the court process immediately will 90% of the time get them to pay. If people are messy, well, don't be a Landlord.
Quarterly inspections help us maintain units. If anything is damaged by the tenant, we have it in the rental agreement that we will do the repair and they are financially responsible to pay for it immediately. No deducting it from the security. This has trained them to take good care of the property. Quarterly inspections also reveal clues that a formerly okay tenant is going downhill and we can assist them or prepare to replace them.
This is really a good idea. We had issues with tenants that were in the apartment for 5 years and took good care of the place for the first few years so we let them be until the rent started to constantly come late , they started disturbing other neighbors and we started having a flea infestation they weren't cooperative with resolution of. When we gave notice we found they did a lot more damage then expected. They racked out the bathroom and kitchen. So yeah we will always be doing inspections quarterly
High credit score and high income doesn't mean they don't destroy or steal.
That’s true, but high income and high credit score do mean they have a lot to lose. It also means you can collect on judgements from the court and an eviction will wreck their credit
@@jamessopkin OK, but that depends on if the landlord asked them for their social security number and wrote that down on the eviction papers. Am I right?
@crand20033 you can't file a court eviction without that basic info so confused on why you state this. 🧐
A lot better odds though.
Excellent tips! Love it. It has just opened my eyes for tenant choosing criteria.
Thanks Brandon. Good stuff. Also one of Henry Ford quotes is whether you think you can or you can't, your right!
EXCELLENT advice. Thank you 👌🙌🤩
I agree that you must do everything possible to make a unit attractive and livable. You"re way off base in your qualifying tenants. The 33 percent figure you're using would work if you include ALL the tenant's obligations - all loan payments, rent, and other financial obligations. THAT is what banks do. Get a proper credit report. Accept no charge-backs (companies that gave up on late accounts and wrote them off completely). I never bother with references - no one gives the name of a person who will give a bad reference. Current landlords of bad people will say anything to get rid of them. Smart former landlords say NOTHING due to fear of a lawsuit. Turnovers and bad tenants cost too much - avoid problems up front and make more money. I enjoyed your presentation.
I had that tenant too! I lost a little more than $5k. I like the income more than 3x the rent amount. I didn't run a credit report back then; lessons learned!
Good stuff. Funny I’ve been listening to the podcast for a while now without seeing your face. When this video popped up on my UA-cam timeline, I didn’t know it was a BP video but I recognized that voice right way! I was like, hey that sounds like Brandon! Lol
You can't judge a home by its price, so I always view the cheaper ones first. For me it's not so much I'll pay more if the property is in better condition, as there's a minimum standard I have for condition and cleanliness and will walk away from any property that does not meet those standards. I don't negotiate ("Oh, if you clean this place up, I'll pay more!"), I simply assume the owner is a slumlord who's not worth dealing with and go elsewhere.
I moved from PA to VA when my wife got a new job I still had a couple months left on my contract for a rental. Management agency would not allow us out since only 4 months where left on the lease. So we paid 2 months up front but for the last two months we came to agreement I would come back to give them the last 2 months rent when I came to move my stuff out cause we where paying two rents and they wouldn’t let us out of the agreement. Did not have that cash on hand with moving and fees and a pay gap well we both moved, it was not possible. Va spot had a high up front due to the high demand out here.
They agreed. We talked on the phone multiple times a week. Stayed in touch, set a day and time to meet at the property to exchange the two months rent and sing out of the lease and move my stuff out. Everything was fine. They said so as well.
WHEN I SHOWED UP THEY HAD CHANGED THE LOCKS. When I called them their tune had changed. The sharifs showed up with their unit manager ( it was a town house) the sharif asked if I was made aware, I said no, no mail just a note stapled to the door which I wouldn’t see as I was out of state, showed him my VA license, I told him I had all the rent as they had agreed to and showed him the emails text and the checks. He was willing to accept it and unlock the place so I could start moving out. He seemed perturbed at the situation. Their management guy said he was given instructions not to accept it and not let me in till the day the lease ended ( 3 days from then) when he would be removing my items. The sharif removed the paper work removed the citation and said it ms no longer a issue for him and that since I had the payment they and I could work it out and he would not be enforcing any eviction since I had offered payment. He left quite pissed telling the manager it was a civil court issue and not to call him.
When I called the office they refused to answer my calls, everyone was “out to lunch” for the entire day. Thankfully when I was a business owner in that town I made friends with the owner of the management company. Called him and a day later I was informed they would take the check and I could get my stuff. The owner declined to explain exactly what happened but simply said “someone didn’t do their job and was trying to shift the blame” and apologized. Never explained more and I never pushed.
All landlords are not created equal my friends. Like any job, some people are stupid, and mean.
U R lucky you got your stuff back. Not everyone would have been so lucky.
I saw your response please make sure the Landlord report to Landlord/Tenant Court that the judgement was paid (satisfied) Hopefully you have a receipt that your paid them.
Well said...
good stuff bro
Hello thanks for the video, I just suscribe, I want to learn more.
I am amazed that no one in these tenant videos has yet mentioned.............make an unannounced visit where they live now, and ask if you can see the property.
In your left pocket is a turn down letter, in your right, an acceptance letter.
Let them prove you want them, living like that, in your unit.
550, spick and span, mowed lawn, great smell. "When can you move in?
685, lawn never mowed, dead car on the grass, smells, dirty dishes well after a meal, holes in the wall, children damaging, pet damaging the property. You clearly know that income being high, great credit, ability to deposit high all are outweighed by what you see.
Yeah and you're being a weirdo and you'll never get them as a tenant if you show up unannounced and ask to come in and inspect their current place. That my friend is a CREEPER!
A landlord asking to view your current home is reasonable enough. To just stop in is a no go.
@@davidunderwood4341 But they came to YOU applying for tenancy. You're trying to find out how they live in someone else's property. If they've allowed the place to degenerate to a squalor shack, I'd be leery. That's not being a "creeper." That's "doing research."
It's being a fricking creepy weirdo. Driving by to check it out is much different than stopping by un announced! Trust me, it's a high level of creepy! What's your experience as a Landlord by the way?@@ApartmentKing66
Showing up unannounced is how landlords get punched in between the eyes. I had an experience where my landlord came to the units every single day, would stand outside the door of everyone's apartments one by one with his ear against the door and listening for a few minutes, every single day. Then one day the guy across the hall, (not someone I would have messed with) opened up his door and punched him in the eye. Was pretty funny seeing the landlord collect rent with a black eye for a month.
For myself:
NO Evictions
I must see utilities in their name.
Must have a checking account.
I look inside of their car from a distance
I'm very suspicious of people living with others or needing to move in NOW!
Joe O please tell me, why utilities in their name?
Nixon Chan 1) It tells me where they currently live. 2). It tells me that they are current on their utilities. 3) It tells me that they are not living off of somebody else. 4) It tells me that they have not burned the bridge with the utility company, so now put utilities in parents or child’s name. 5). It allows me to see where they currently live and if they maintain the outside of the property.
I can’t expect good credit but I do want to see stability.
Bankruptcy?
Great tips. What software do you use to screen?
Hey Brandon! Can you use a pet addendum for a renter who needs a therapy pet? What if later on the renter informs you that he or she will require a therapy pet? When you use COZY for background checks will it inform you if a prospective tenant tried litigation against a landlord, but did not have an eviction history? Two big questions!
Having high rental standards makes sense. Always have a rental application. There are a lot of people who try to cause trouble on purpose to sue regarding anything.
Nice! I teach people about the Sub30k club (its based on houses that less than 30k, but the rents are usually above $800 per month). However, when doing tenant screening, my non negotiables are total income, court judgements, and the NUMBER of charge offs they have (meaning, I will take no more than 1, as that's in my experience, indicative of not seeing payments to others as a high priority). I go into more details, but that's the gist. Oh, but i do point to your ultimate tenant screening guide, just with a few caveats for rentals in Working Class Neighborhoods. Good post!
As a person who previously had a 800 credit score I can tell you that anyone with that score is a target for scam artists who want to take advantage of you and get loans, money and credit cards in your name and ruin your credit. This does not mean that I am bad risk. Only that I was unknowing of the kind of scams that could happen.
Ok - 800 can make you a target....
For anyone who wants to scam a bank in your name.
@AffordableREI Outside of crime-ridden inner-city slums like Detroit, which are inherently risky, where do you find houses for less than 30k? In my area, even houses in the crime-ridden inner-city slums will cost you 6 digits.
OINK OINK another stupid comment from a GREEDY landlord.
Don't lower ur standards. I've made mistakes for my low end tenants. Somehow I still make money. Good video From Sacramento
I am doing exactly what you say as far as growing my properties. I am low end too. Not low low but blue. How do i turn low end into high end. It is a nice neighborhood so it can happen
As a renter the logic of 3 times the rent is understandable but in reality the rentals available is a danger zone for people who need a roof over their heads. The wage often doesn't match, if they have to move for a new jov. I got a state job but the pay is low, but 3 times the rent. I'd be living in a run down house with mice and a rotting porch if every landlord went by that logic here. Luckily I have good credit and history of leaving rentals cleaner than I moved in. Plus I also hated the fact landlords in my area don't rent to single people. You say you have a room for rent but you wont rent to a single professional??? Not everybody moves in with a significant other.
It is three times rental before or after income tax?
I’ve been thinking I want to put on my leases that a house cleaning service (which is included in rent fee) is required monthly for a total of 6 hours. That way I know it’s being cleaned, I have an inside eye with that cleaning company to make sure nothing is being destroyed out of the norm. Also pest spraying every 6 months inside and out which is included in rent. Hopefully it will help everyone involved.
Getting my first apartment was so hard because of my shit credit. I don’t pay my bills because I’m paying rent. Paying rent, my insurance, car repairs, etc will always be more important than my student loans or some hospital bill from four years ago. I need a place to live and my car way more than anything else.
when you say they must make 3 times the rent, do you mean gross income or net income?
You are the best
How do you go about being able to legally checking someone's credit report/score?
It is not a persons right to rent someones elses property , it is a privilege . Meet the criteria or move on . Unfortunately some have ruined it for many. Renters can live like a gypsy and difficult to track down if they owe thousands in rent or have damaged the property.
i require at least double the rental amount for monthly income..most places its 3 times.
I have a low credit but it's not for no payment, its that I closed down cards.
Some landlords would still consider you.
Yeah I have under 600 because closed accounts and maxed out cc for leverage to purchase more properties ., never missed a Payment and always paid my bills always 🤦♂️
I was scammed out of my credit and the scammer opened up cards in my name.
After three months is should go back up.
credit for renting is a dumb concept on anything that isnt a house rent. If you got good credit then why pay your landlords morgage? unless its like bankruptcies or missed payments bringing it down
Three times net or gross salary?
What do you expect when you rent to low end renters? Grief, non-payment of rent and destruction of property when they vacate.
I guess I'm low end renter. I always pick the lowest priced rental. Quite frankly you've seen one rental, you've seen them all. I also guess my $5k a month is not good enough for you? I have no credit. Not bad credit, none. Basicly I don't exist.
You don't get it. It's not that you're low end, YOU'RE HIGH RISK. Landlords have to balance risk when considering who is occupying their property. So you make 5k/mo...maybe a drug dealer makes more does that mean I want a drug dealer living in my property? Hell no. And you "don't exist" I take it you're in documented? If that's the case you're breaking the law. Any respectable landlord won't do business with someone illigally in the US.
Hello thanks for the info. I just bought your book. What program do you use to check tenants credit scores?
I have them supply a full credit report. It’s more telling than a credit score alone.
Screen everyone!
Well, a 600 a month apartment might be low end in one market, and midlevel in another market.
TheNoodlyAppendage 600 is low level pretty much anywhere. I live in Omaha and 600 is pretty ratchet.
@Pooge Onmyway You clearly don't own any real estate loser.
@Pooge Onmyway There is no point to refute. York, Nebraska? Go home.
Casey Reeves
York, NE and Omaha are not the same. I’d rather live in Omaha. It’s a legit city.
So if my rental is $3100/month they must make $111,600/year to fulfill x3 the rent?
You're talking into the end of a side address mic man.
Periodic property inspections are a must
Once a year is the standard where I live. They come in with a person from city code enforcement or something and check fire extinguishers, smoke detectors, light switches, etc. But they are not allowed to touch or move any belongings. Which could be a problem as some tenants might use a rug to hide a stain, a dresser to hide a hole in the wall, etc.
What websites do you guys used to do background checks and acreen tenants?
How do you report an eviction?
....if you are saying on one hand not all your units are rented out to 'high end' tenants, and that you have some units that go for, $500. Then, saying that you want tenants to have "3x's the amount of the unit" is and could be a bit steep for someone not making that much money.
Or...is this the type of property that I myself would rent? If I was in the same situation as a tenant.
So how can you check to see if someone has been evicted? I don’t expect someone would tell the truth.
What do you use to check credit scores? I'm a landlord and would love to know how you check
Google search "Credit check for tenants"
I got an eviction on my record from my mother-in-law and it was only because she was a terrible person and not anything I ever did!!! But I take care of everything I’ve ever owned but I’ve owned my own house too and never rented until the recession!! I would ask about the other homes they rented from and see the condition of the property because I wouldn’t live in a filthy house so if someone could live in a filthy place I wouldn’t want to rent to them!!! You can judge a person by what they live in! I see often where people can really be manipulative and act like they’re the best kind of people when they’re just trying to hustle you!!!
Lmao when he was aboit to say "im not in the ghe......" and changed uo had me cracking up
lmao
Ghetto for some, home to others.
Tony Sanchez yeah he should have just done a edit. Looks worse this way
How do you find out about the eviction is that ok the credit report?
easy online search at my state Supreme Court records.
This is not working for me on my low end property, tenants are faking their landlords, or landlords won't answer phone,& faking their jobs, also saying oh I have kids, thy will settle down around 9pm, so I suffer until 9 or 10pm, the kids are rough wit your property & parents just lay there saying nothing,she just moved in a couple of days ago
I usually price my rooms based on what others are charging on Craigslist. I know they will probably be looking there for another room.
David Crandall can I rent at one of your properties?
A prospective tenant could have the best credit history ever but end up being a nightmare of a tenet so you can't go by credit! And having a job is not always an ok either !
Kathie Johns exactly!
Kathie Johns - Right. We allowed a relative of a tenant move into the neighborhood and they quit their jobs shortly after. They caused trouble with neighbors, traffic coming and going all day long. Turned out to be drug dealers on the side and they quit paying rent. We evicted because of nonpayment, but they appealed and were allowed to stay as long as they paid the courts the rent and didn't have to pay arrears. We only were able to get them out then because they failed to make their first payment to the court on time. And because the appeal was still active it took a year before it went to court (they opted for jury trial so we couldn't do it in small claims court anymore). They were long gone by then, though. And I was able to have it dismissed. I saw in the paper the other day that she was arrested again for felony probation violation.
@Kathie Johns There is no guarantee in life, except death. What you are doing by checking someones credit and establishing their job history is reducing your risk. Having good credit doesn't mean someone is going to pay you, that's true. Having bad credit means they have failed to pay in the past, and that's not a good sign for the future. Having a job doesn't mean that everything is A-OK, that's true. But NOT having a job means they have no way to pay you, or they are involved in some criminal enterprise, definitely NOT OK.
Kathie Johns, I agree with you but if I'm comparing tenants on Paper I would go with the better credit score and strong work history. Bad credit and 5 non- skilled jobs in 1 year is a no no.
Dude was about to say ghetto 1:36. Had to catch himself.
Is it a good idea to rent to Section 8 Housing renters?
It depends, some landlords view it as guaranteed money. The downside is they’re there all day, section 8 is their advocacy. They will sell you on how great that tenant is. They won’t tell you the important facts such as 1. Is the tenant someone who destroys your property 2. On drugs. 3. Someone who has no regards for your lease.
Then once they’re in there causing chaos section 8 will not! Intervene on your behalf. And at which time your only chance to get them out is by them not paying their low portion of the rent.
Our daughter is currently hunting for her first job as a librarian (just finished grad school in December), and will be renting her first apartment in whichever town she gets a job. No credit cards yet (she uses a debit card tied to her checking account to pay for things), no car payments (we're giving her one of our older cars, well-maintained & new tires), no missed student loan payments (we're helping with that), and the residence halls at college and grad school would be her only former "landlords". Assuming she lands a job which pays min. $40,000/year, would she be a good prospective tenant? And would she need us (her parents) as co-signers?
I'd be glad to have her. She shows consistency and determination. No co-sign, that is too hard to mess with. To me she is low risk anyway.
Sorry to say but it all depends on the landlord.
I’m a landlord and I laugh when neighboring properties are asking for 700 plus credit score etc.; if someone has that plus enough for rent they would just buy a property and pay half mortgage what rent is 🤦♂️ also when bad times come someone with great credit will make their last priority to pay rent since we can’t report it to agencies and effect their score ., IRONY
Gxp Z06 You’d be surprise at how many folks do not think this way.
Wow good point! It's true, I built up my credit (from none) to rent but now I am looking to own as yes, owning is more affordable and profitable :)
Gxp Z06 facts
I let my car park and aprtment units to civil servants, and folks who pay biennially or anually. Never a problem.
So if people can only afford low income housing, you require them to make MORE money?
Robert Lefeaux a lot of people who are in this land-lording game are not very bright. Let it go.
Robert Lefeaux low end not low income. Smart renters that don’t live above their means.
@@stephena5752 I think you miss the point. People that are already stretched to the max by life, by circumstance, by situation.....and you require them to make double. Doesn't sound too equitable.
@@trojanette8345 Nope, YOU are missing the point. This isn't Section 8.
Lol someone rented from you for 5 years and then you had to put 4k back in. That's not bad.
considering at 600 thats almost a year of rent its still pretty bad.
3times amount gross or take home ?
Generally gross.
Is the 3 months rent gross or net?
Probably gross. That's what I use anyway.
Do you run a criminal background and if so what do you not allow?
al green hey, was this to me? I just noticed the question Personally, I dont want any evictions at all - im not dealing with your *ish. Secondly, as far as criminal, NOPE. There are plenty of renters without a record, im not going to spend the little bit of my hard earned rental real estate on someone who couldn't figure out how to live without resorting to crime. I work too hard. However, that's my take, as I protect my investments pretty fiercely - they're all I have, and I had to sacrifice to put a lot of money in them.
i go back 10 years on evictions....i dont care what the reason was within 10 years..not approved.
Do you want lawsuits for retaliation? If the eviction was retaliatory, and you're not even willing to consider it (even if the landlord LOST the case), then I hope you don't mind putting six generations of your attorney's offspring through Harvard.
So if a woman was raped by her landlord who then evicted her out of spite you would blame the woman. Good way to get sued for retaliation.
al green Most white collar crimes are alright with me.
Damn rent for $600.00 a month what state do you live in I live in San Diego and rent is through the roof
Arkansas
Request 2 months security one month rent. File eviction if they don’t pay rent
Agreed; don't even bother with late fees. Just file for eviction on the 2nd, it's not worth the hassle, and if they do pay you, you can drop the eviction at any time.
750 credit and six figure income is probably not going to be renting anyway. Right?
Merge98FM his advice is really odd. He’s either renting to Silicon Valley tech people or he’s in a wealthy area like NOVA/DC etc. this advice won’t work in the majority of places in the US unless you like having your units sit empty.
I wish out eviction process was one month. We have about 8-10 months process here in Canada... Also allot of your screening metrics are against our human rights code here too. Sounds like there is logic where you are
@@kairenjamieson5351 Ontario, other than the LTB being shut down there isn't a hope in hell of getting a hearing in less than 6/8 months before Covid. Who knows now after Covid...12/14 months or more for a basic N4?(non payment of rent)
Was he about to say GHETTTTo...or ghetto?🤔. 1:37
I will help people who want to help themself. U cant let one bad apple ruin your blessins. Judgen people over evictions from years ago is just stupid. but hey business is business. Dont wanna lower your standards
It's more than that. If the eviction was malicious or retaliatory, punishing someone for that could invite a fair-housing lawsuit. Never mind what happens if your city's social services department has to spend 150k to rescue someone because you wouldn't rent to them. Think the city might decide YOU are the problem? Do cities have any power over landlords? Never mind what some bad publicity on the internet can do. Sadly, not many landlords are like you and most think they can just fuck with people's housing without consequence.
@Beautiful Girl - You can rent to whoever you want to, but remember evictions generally go off the record after seven years, so it's not like a landlord can find out about evictions from a long time ago. It's only good diligence to protect your money. If you were a landlord, you'd understand the risk. I don't know if I could be a landlord, I'd be up all night worried about what's going on at my properties.
You are giving people possession of AT LEAST tens of thousands of dollars of your property at the minimum. The value of it is your kid's college fund. It's your grandchildrens' future. The rent is the food on your table. It's the gas in the tank. It's the property taxes and repairs to keep it what is. How much peace of mind would you want if you were loaning a $20,000 car or a $20,000 piece of jewelry to someone, for a year at least? How about $100-200K? And if you try to get it back because they aren't paying or they are wrecking the place? You have to inform them, wait the requisite time, go to court, win the case, wait for the court to process the paperwork, wait for the sheriff to show up, then pay a locksmith to change the keys. The total cost of evicting someone is often more costly than the security deposit you get from them.
And the risks! The day the sheriff shows up the tenant has already known for at least two months that they are getting evicted. What if they have a vengeful bone in their body? I've seen evicted tenants very often trash the place before leaving, punching holes in walls, leaving the sink run over, clogging toilets, sometimes even stealing anything metal to take to the scrap yard, appliances, plumbing, and in extreme cases, ARSON. Don't take my word for it you can see it all over UA-cam, people who rent out a place, miss the first payment, never pay again, and wreck the whole house before getting evicted sometimes as long as 6 months later, if the judge can't see through their lies. I've seen houses that were basically "totaled": the cost to refurbish them after the tenant left was more than the house was worth. This is extremely common in cities where property value is low, like Detroit. If you have to spend 15K to repair a Detroit house, you might as well abandon it to the druggies and go buy another one.
You better bet if a landlord went through the, risk, trouble and expense of evicting someone, they didn't do it frivolously. A lot of landlords bend over backwards with leniency because they know it's better to get someone out without eviction than with eviction every time, but it is quite rare to find a tenant who doesn't take advantage of that. I have to agree with this guy, I'd never rent to someone with an eviction on their record. Let the big apartment complexes and the government housing take them in.
You're stupid, call your old landlord and pay back what you owe.
@@raygordonteacheschess5501 you believe you can ruin someone financially without consequence who gave you a second chance to screw someone else over. Get over yourself and don't take on what you won't pay.
Excuse me? You know what LIBEL is? Never missed a rent payment in my LIFE. Landlords often break laws. Maybe they like being bankrupted by legal fees and bad reviews.
credit has nothing to do with someones financial health...all that means is they are in debt. you want someone in debt or someone who lives a cash lifestyle with a healthy savings??
That makes no sense when determining if someone pays there rent. Your credit report not only includes your debt to income ratio but also how well they pay there bills on time. As for those that don't have an established credit history then you look at their monthly income. You have to consider each individual situation against your standards.
Disabled people and minorities have lower credit scores, plus they have government agencies to help them if they fall behind in their rent. Their money can't be touched by creditors. The $1,200 or so a month I get in benefits is dropped into my bank at the beginning of the month. If you think someone with a crappy job is a better credit risk than me, well....
"Considering each individual situation" equates to "do I LIKE you."
Valerie Smith not true. I don't have good credit the only bad credit I have is from medical bills. But anything I took out like my car note, credit card, utility, and phone bills I pay. And I have never been a day late on my $1250 rent.
What's amusing here is that the seller is acting picky like the buyer usually can. I see a big opportunity in the subprime rental market if landlords are being this stupid.
I have a lawyer and that lawyer will soon have the comments about me. You might want to delete them unless you like being sued. You think you can fuck with tenants without consequence? I show no mercy to those types, as they deserve none. Don't let some internet people gas you up so bad you make your lawyers rich and yourself broke.
What about people who don't have credit scores at all because they don't ever borrow money? I specifically have been living completely debt free for two years now, and in five years I will have a completely blank credit report.
I would probably just ask for extra months deposit. That way you protect yourself as a landlord from an unknown financial history
Protect yourself from what? A person with good financial sense?
Jermaine Race well you have no financial sense according to your record. You need to establish a line of credit and maintain it over long periods of time. Not have no debt at all. Banks don't like that.
Why do I care what the bank likes? All the bank wants to do with me is loan me money so I can pay interest. Sorry, I don't' care a whit about what the bank thinks. If you can't buy it cash, you can't afford it. Seems to me the only reason to have a line of credit is to borrow money, and that is foolish.
@@jermainerace4156 Jermaine Race A line of credit isn't just for borrowing things you can't afford today. Nor is it for living out of your means. It's so you can show banks, landlords, employers, utility companies and other providers you are responsible with paying for things. Why should you care what the banks think? Because if you want to buy a house or car you would get a better interest rate. Do you carry around enough cash to buy a house or car? If so, that's kind of crazy considering the cash would be depreciating due to inflation. Also, even if you have the cash to make a larger purchase like a laptop, it's much more wiser to pay on a credit card. 1) you can get extended warranties and protection, 2) you can get anywhere from 1.5% to 5% cash back in you pocket or towards travel rewards, 3) if there is any fraud credit card companies can handle it sooner than a bank would with your debit card or cash and 4) why not build a good credit score for buying things you'd buy anyways? Pay everything back in full asap and spend without your budgetted means and it becomes a no brainier.
My thing is: if you don't trust yourself to use a credit card and not overspend or it's not your things to earn rewards, that's fine. But when people say using a credit card or borrowing at all is foolish or when people make credit sound like the devil you limit yourself.
I kinda disagree with some of this. In that ladies situation I admit she should not have let that place get that messy for one, but she had just gotten a divorce and stuck with 5 kids so she was obviously having a hard time, plus if they were a relatively good tenant for 5 years I think that says something. I guess it really depends on how long the mess had been there as if she was that messy from the get go I can understand, but if it was a mess that looked relatively new it could have been because of the recent developments in her life. Also, some people get evicted for bullshit reasons and it may be difficult for them to disprove that since they most likely didn't have the time nor money to go through a legal process in suing their previous landlord. Either way it would be difficult to know who was telling the truth and I think there should be a time limit for how long those evictions can effect a person. Imagine if someone had an eviction at the age of 20 (prime college years right there, plenty of partying and such that could potentially cause an eviction if gotten out of hand) and by the age of 30 or even 40 they may be looking for an apartment again. Maybe during all that time they lived with friends or rented from private owners or even had apartments rent to them anyway despite the eviction but they have kept a relatively clean record since. Would that eviction still get them rejected? It would seem a little unfair for that to happen. Also I think you did your math wrong, you were out $4000 as they paid $1000 to cover damages. Deposits are not profit for the landlord, they are for security to help ensure or mitigate the risk of damage to the unit.
Generally evictions go off the record after 7 years. And yes, if someone was a partying college kid that wrecked a place bad enough to get evicted, I wouldn't want them for a tenant 10 years later either.
Well, that would be a little unfair. true he/she should have made better choices when they are younger, but 10 years later you could be talking to a 30-32 year old adult, hopefully matured by that point. There are things that children do that they either do not understand the consequences to or don't understand that it's wrong and even though colleges years you're technically an adult, it's also the time of your life where a lot of age restrictions get removed as well which means more exploring and learning things you previously were not allowed to do, which also means plenty of opportunities to do stupid stuff that you may not realize the consequences to or realize is bad. Not every parent will teach their kids this stuff when they are young, if anything most parents don't and the child actually learns from the parents behavior. Now imagine if that parent was 20 when he/she had their kid, the kid starts learning the bad habits as the adult tries to grow out of them. Doesn't sound like a very good foundation to education to me.
It's really, really bad if you evicted for a party. I've had parties at apartments, some of which were a bit raucous, including police involvement and my landlord never even heard of them. You've got to be a genuine animal to cause that much damage to get evicted from a house for party damage.
Even by 20, a great deal of personality has been developed that will likely carry into adulthood. It's a risk you have to decide on if you happen to know about it. It's not a matter of "fair" or "unfair", it's a matter of losing money.
If I had a tenant paying for 5 years and messed my house up and 5,000 to fix it up, not the best situation but I'd lick my wounds and consider it still a great frigging deal. let's say she pays 600 a month times a year so 7200x5 years= 36,000-5,000=31,000 passive income. Assume the house is paid off. taxes and insurance 2,000 a year so 10,000. He made 21,000 in passive income! Good deal!
"600 a month times a year so 7200x5 years= 36,000-5,000=31,000 passive income" minus 10000 taxes, = 21,000, minus 5000 because they messed the place up = 16000.
But this only works if the house is paid off (the wisest course). How many people you know actually do that? Most people are leveraging their properties to get more properties.
Another problem with this is "$2000 a year taxes" ...this assumes we're talking about a a property that is quite low in value, or in a very undesirable area, etc. So you aren't making a lot of money off of this property when you sell it. In my part of the country, property is taxed by the county, the state, AND the school district, and even a bottom of the barrel $100K house could run you over $1500/year in property taxes. Not only that, but you have failed to count the income tax on the money you made by renting the property.
But even assuming you are correct in your estimate of property taxes and the place being paid for, this person made 16000 over 5 years which comes out to $3200/year. At least $800 is going to the IRS, leaving us with $2400. It could easily cost $1400/year to upkeep and insure a property, so that brings us down to $1000/year.
Now lets consider return on investment: if the house is worth $200K, which is about average for a $2000/year property tax figure, and the person mortgaged the place for 15 years @ say, 4.5 (a pretty good rate, historically speaking) they will pay out 40K for the down-payment and 216K on the loan. They aren't going to have much extra to pay it down faster out of the their $1000/year profit, so they will end up going pretty close to full term.
At $1K per year from a house that has cost $256K (40K up front) and nets them a whopping... 0.377%... a third of a percent return on investment. It's true that the house may gain in value, but until they sell it, that isn't realized, and in any case, it is far from guaranteed. Odds are even between gaining, losing or not changing value significantly, considering the market in recent years, but mostly depends on the location. If they are only charging $600/month, it isn't very likely to be in an area that gained value.
By comparison if they sold the property now for the 200K it's worth and invested in a good portfolio, a 10% ROI is not to hard to realize, and even after taxes would net them well more than ten times what they are making by keeping the place.
For all the hassle of being a landlord, you can make $1000/year... "...still a great frigging deal." ...maybe for the tenant, seeing as how rent at that place is basically the same as a slightly above average car payment. When a tenant trashes a low-rent house to the tune of $5000? That's basically 5 years profit down the toilet. This guy basically broke even on these people. From his perspective, he let them live there for free.
But lets be real, $600/month is SUPER cheap. Almost anyone can afford that, including many who are on nothing but social security. A person could make that work by waiting tables while paying their way through college.
Holy moly the out of sync audio channels in this video are painful
I'm actually suprised you have rules like 3 to 4 times monthly rent. I rented from 18 to 33 year old I was at 1 point a single mother and i certainly didnt have more than double monthly rent as income during that time thank god i found a landlord who let me rent I lucky had a small emergency fund of 5 grand and showed him that to get in. As a past renter i think a s yous cake you have to still remember people are....people. I guess judgement skills arent as accurate as numbers but...i dunno. I guess well make some mistakes then because though i want to be cautious and protect my family I 100% understand what most renters income looks like and situations look like. There is a reason they arent buying their own. So using mortgage qualified seems a bit silly to me. Noob opinion 🤷♀️
Most of my renters don't have credit at all. They don't even know what it is.
I think it’s horrible that landlords are asking 3x the rent for what you make a month ! I’m on disability and have a housing voucher. I can pay my rent ! But my disability wage per month does not even cover one month rent ! But with my housing voucher I have the rent and my bills covered . I will treat your property probably better than the person who is out working everyday . I’m home cleaning and taking care of my place . I think the way your thinking wanting the tenant to make so much money . Your denying some really good people a chance to have a good safe place to live ! So keep your money hungry attitude! I hope I find some landlord who actually has a heart and can tell a good person from a bad one ☝🏻
Some a****** bought the apartment I'm living in and hired a rental management company. He's going to kick everybody out through this company and remodel. I've paid 56 months on time. Never late. Never complained unless it was serious, and they're taking my apartment away from me while I have major health problems and making me reapply for another place which should have already been mine. A lot of these landlords are completely heartless. All this so some lawyer can make an extra couple bucks gentrifying who's been a lawyer for 40 years and should have money in abundance... It's disgusting. This whole thing is destroying America. This whole standard is requiring everybody to be rich and not everybody can be. I got bad credit and an eviction from when I was a crazy drunk five years ago but I quit drinking and everything. I'm a vegetarian fitness enthusiast now. I guess that's undesirable. They're going to STILL go by my credit score and eviction when I cleaned up my life and I paid on time for almost 5 years this place I've managed to get into. F****** bullsh*t. Anyways I'm just venting and agreeing... ☹️
Rental property is a business and successful business models are followed. The 3x rent has been more successful so it’s followed more, nothing personal.
Well I too think it sucks
@@MsRocker961 too bad, get your income up
This advice can easily get landlords sued.
My answer is that it is already rented to somebody else, or this will not work out. Don't be specific or you get sued.
You have to have standards otherwise you will get ripped off and will not be in the landlord business anymore.
Should I always ask for a social security number on the app in case I have to evict and want to mess up their credit?
How would you feel if some tenant that harrassing a tenant that has a disabled that is on house choice vouchers programs and a bunch of black tenants who was banned them for life due to there behaviors actions.
and there are caused the disabled tenant when thoses behaviors of hate of disabled person and lied about them say they were in a state hospitals all there life isnt true at all. lynn lived at home till she got a fulltime at a hosptal and loss it due to budget cuts. would you allowing black 11yrs old boy call the disabled adult made up lies about saying she is a mentalcases: hooker: whores: all do to a raped years ago. ld:nvld:TBI:ANXIETY PTSD: ADHD:.
$500 a month?
Do you know how many min hours it takes A month to pay $500?
considering this is 2 years ago that number has definitely inflate but even 2 years ago $500 is rather cheap. I think it depends on your area. going based on the federal minimum wage though which hasn't changed in years if ever you would have to work a total of 68.9 hours a month. That's less than 20 hours a week, so I hope your not trying to imply that $500 is expensive. By the way, tax wasn't calculated but the government takes out roughly 21% of my income in taxes currently so using that figure that's 87.2 hours a month at minimum wage which is still only roughly 3 more hours per week. of course you would need to work more than this anyway for other bills and such but you can still barely be a part time worker and still afford $500.
$500 a month is pitifully low. Anyone can pay that. Minimum wage is 1280/mo @ 40 hours. Not enough hours? Get another job.
Exactly my point, would love to get a place for that low, though if it were that low I would be looking for where the strings are attached. In my area rents range from $889-$2000+ with most falling somewhere in the middle of that. There are a few places for affordable living but hard to find.
raventhorX: I pay $600/month for a 3 bedroom 1ba with a 3car garage on 16acres. Want to hear the real kicker? the apartment complex in town denyed because of no credit. That same complex wanted $750/month for a 2br1ba. In hindsight they did me a favor......
I could pay 500 in rent in 3 days
Don't always reject someone with an eviction. Example, my brother and I rented a house while he was in the Army stationed at Ft. Bliss. Everything was fine we rented it for over a year. Then we heard that the owners were trying to sell the house. We were like OK that's fine just let us know how the situation is going to play out. Once we found out they were trying to sell the house they stopped taking care of the house. I'm not talking about a creaky floor there was water pouring out of the dinning room chandler. Toilets didn't work. Broken windows that were broken when we first moved in. We made those fuckers evict us. We didn't pay rent for like 6 months since my brother was getting out of the Army. They took us to court and was ordered to pay us back our security deposit since it can't be used for rent and we were to pay one months rent. We never paid them a dime. They never returned our deposit which entitled us to 3x rent ($3300) at the end of the day the owners owed us money. Never had an issue with the eviction getting places to live. My brother owned his home when he was married and I'm working on buying my second home. Not every eviction is because the renter couldn't pay the rent sometimes its because they shouldn't have to pay the rent. Knowing what I know now we could have hosed the owners of the house but that wasn't our motive. If you're going to expect me to pay rent on a house that has water leaking from an electrical fixture your brain has evicted it's last brain cell.
Food for thought.
Sounds fishy? You talk like a rent scammer?
@@Shadow-7773 You can't scam someone who lets their property rot over a families head. I have my own house and working on buying another and I would never even entertain the idea of not taking care of my things regardless if I'm living it myself or renting it out to someone. I know you're a troll but thought I would inform you that things have improved for me. No idea what happened to the house. Probably condemned or some shit like that
@@kevintrabert1922 That is the same response most people say when someone disagree with them. You are a troll. Anyone can scam anyone at any time over anything. Your response did not sound like an honest person. Hence' my reply. Correct, landlords sure not just reject renters until they do their homework. But most horror stories are from renters who have been evicted before. Why take a chance. Emp look at what New York and CA is doing to landlords?
lower the microphone, get it out of the center of the screen, distortion because you are to close, let the mic do the work for you by talking in a normal tone keeping the audience relaxed
I will say my metrics I teach are completely different than Brandons. I do go over them in my book. Click on profile for info.
JOB. They must be able to prove income. Non smoker, no pets. No sec 8.
No. I state it up front. I DON'T TAKE SECTION 8. SECTION 8 LANDLORDS DO IT VOLUNTARILY. I chose not to participate in another form of welfare.
Sockpupppet Extraordinaire why not. personally I've never had a section tenant but not because I prohibit Jen. just worked out that way
A landlord can not deny a Section 8 tenant under federal, state and local laws. Change your IP address today to avoid a wave of lawsuits.
James Bond - That is not true. A landlord does not have to accept section 8. Maybe it depends on the state you are in. Where I am, they have to get set up to take it first and that requires filling out paperwork, then have the home inspected, etc. If they aren't set up for it, then they can't just accept a section 8 tenant.
@James Bond @ North by West There is absolutely nothing illegal about refusing section 8 housing, otherwise every landlord in the business would have nothing but section 8 tenants. The facts of the matter are, section 8 can't pay for many better quality apartments and houses AND section 8 recipients don't pay security deposits, and usually pay less than 100/mo of their own money. This is actually extremely important, they have ABSOLUTELY NO STAKE WHATSOEVER in keeping your property in decent shape, and they have all day to get into all sorts of criminal activities, because they have no jobs. There is no illegal discrimination here, just unfortunate facts of life. I personally wouldn't' rent to a person who could work but doesn't. It speaks poorly to their level of responsibility.
Easy! No toads. No young. No single.
Pretty soon that'll be considered discrimination.
@@jermainerace4156 Already is haha. You can't discriminate on age or family status.
@@truthsmiles there are ways to do it 😁
@@Scott-got-caught Of course there are. I can also drive my car 140 miles an hour even though the speed limit is 60. Doesn't make it right.
@@truthsmiles high risk tenants...weed them out accordingly. Not to be confused with "discrimination" 😁
Harden your heart. Sell your soul to Satan..And go make those big $$ ..
When I grow up I wanna be a slum lord
I wanted Weinsteen as my tenant.... i settled for Trump
"super high end quality tenants". You're the devil
Wow, the devil huh? Somebody wants to keep their place from getting wrecked makes them the devil?
@Joe Watts- Joe how would you have said it differently? To describe accurately what he was trying to convey to us?
Nobody has an income that's 3 times their rent. Nobody.
bandit957 many people do
I do, in fact, if I could have gotten a cheaper place that wasn't next to a crack house, train station, or shooting gallery, I would have. Why would this be so unbelievable for you?
Because I'm not from Beverly Hills or Midtown Manhattan.
Ha! You're funny. Honestly though, if you are paying more than 1/3 of your income to rent, you are living beyond you means. Get another job or a better job or settle for a cheaper place. You are going to run into major financial issues down the road when you are about to retire and don't have your mortgage paid off, or the savings you'll need to live decent.
bandit957:I'm paying $600 / month for rent and my income is just shy of $4k/month
Low end rental is bloodsucking on the poor!
Would you please elaborate.
It's giving higher income earners a chance to sock away more money in the bank.
I love people jumping on the "Poor min. wage earners! How dare you!" band wagon. I made minimum wage for years and was able to live fine while putting money away. A full time job will pay 1280 a month, so assuming you don't own a fancy car payment or alimony, that gives you 780$ a month to live off of.
8 dollars per hours is $48 per day and after taxes it is $37. Leaving you with little to nothing to pay rent with.
8$ an hour for 8 hour day is 64$ a day...not 48$