Top 5 Factors that Lead Landlords to Reject a Tenant
Every landlord knows that if you choose the wrong tenant, it could cost you more than just unpaid rent. A good renter who pays their rent on time and doesn't damage the apartment home is what all landlords, owners, and management companies strive for.
Avoiding the problematic renter is crucial in order to run a successful rental or apartment business. Here are the top 5 reasons why a landlord should deny an application.
Poor Credit Scores
Good credit is essential to obtain low mortgage rates and receive approval for credit cards. It also should apply in the apartment and home rental business too. Low scores usually indicate late payments or no payments. From credit card charge-offs to car repossessions, these can be pretty significant in damaging credit. We have also seen some management companies decline renters for not paying their cell phone bills. If you own a home or a duplex, it makes sense to pass on a potential tenant with questionable credit history.
Money is Owed to Another Community
The large apartment communities you see in big cities have a general rule they operate by. If someone owes money to a previous complex, then the renter will be immediately denied. This usually can come in 2 forms. This is known as either a judgment or a broken lease. The renter may have abided by their contract, however, there were damages or fines that exceeded the security deposit. The previous owner can then file a claim against the tenant and get awarded a judgment. This may start to show up on the residents' credit report. The broken lease is the worser of the two. This implies that the renter moved out without fulfilling the terms of the lease. In either case, an individual owing money to a previous community must be denied. However, if they do pay-off the amount owed, then they should be in good standing with future landlords and apartment complexes.
Not Enough Income
Many times applicants will apply for a home that is more costly than the income they earn. Approving an individual who doesn't have the income will most likely lead to an eviction or broken lease. A good rule of thumb is to require applicants make at least 3.5 times the monthly rent. After expenses like car payments, phone bills, and other debt, this should leave enough money to pay rent. Accepting anything less immediately is a disservice to the applicant, as they may be stretched too thin.
Information on the Application is Misleading
In other words, the potential tenant is lying. This normally means that they are trying to hide something. At this point rejecting the application is warranted. There are kinds of scams from tenants using the identification of another party or falsifying their income by other means. A seasoned landlord usually has a way of figuring out these tactics.
It's not against the law to deny a tenant because they have pets. Anyone who has ever had a pet living inside a home knows they can be destructive. Large dogs can soil carpet and scratch wood floors. Plus you have the stench of a pet that is so hard to get out of the home. You can charge extra for a pet deposit and even monthly pet rent, but is it really worth it. Renters also have been known to sneak in pets after they move-in. That is another trick that you will want to keep your eyes open for.