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No one said that you had to, or even should, allow a prospective tenant to do a credit check on you. Or that a tenant should allow a potential landlord to do one on them, though that is a much more common occurance. The argument is that a prospective tenant has the same right to ask it of you as you have to ask it of them. And in either case, the answer might be no. And if it's no, then they will have to decide whether it's important enough for them to walk away from this transaction.
Well then I say, the tenant can walk if they refuse but they will be hard pressed to find a place to rent if they don't want to submit to a credit check. I further say if they expect a landlord to agree to a check, they can walk again, and would again be hard pressed to find a landlord who will agree.
No one said that you had to, or even should, allow a prospective tenant to do a credit check on you. Or that a tenant should allow a potential landlord to do one on them, though that is a much more common occurance. The argument is that a prospective tenant has the same right to ask it of you as you have to ask it of them. And in either case, the answer might be no. And if it's no, then they will have to decide whether it's important enough for them to walk away from this transaction.
I could live with that answer. Of course, an applicant has every right to ask for anything they want but that doesn't mean they are "entitled" to what they ask for...
It's been pretty interesting reading the banter going back and forth on this subject I started, and pretty insightful.
I'll add some past experience in the mix. When I rented my first apartment, I was actually required to show that I was employed, and that my monthly income was at least 2.5X the monthly apartment rent. The owners wanted proof that the people moving in would have the financial means to pay rent during their lease. In the past, home prices have always gone up and it's generally been easy to sell a home, so I don't think that foreclosure has ever been a concern of a renter. Today, foreclosure on rental homes is common and I think it's a worry.
I think a prospective tenant should be able to request a mortgage payment stub showing the monthly payment, PITI (financial information blacked out) as well as something showing the source of any makeup income needed. I'd tell the landlord to black out any sensitive financial information they weren't comfortable sharing. Basically, if the mortgage (PITI) is $3000 a month and they are leasing for $1500 a month, and the landlord is unemployed, where's the extra $1500 a month coming from? I think that situation would be high risk at foreclosure.
I think the reason why I feel this way today is many people only rent their house after they've tried to sell it for six months and are getting close to running out of money, so they try to rent it as a last ditch effort to pay the mortgage. I wouldn't want to rent that house. On the other hand, there are people who purchased long ago and have no mortgage or only a little one, and they've rented the place for years. Maybe the amount of rent they charge is greater than the mortgage payment. In that case, I think the chance of foreclosure is much smaller.
It's been pretty interesting reading the banter going back and forth on this subject I started, and pretty insightful.
I'll add some past experience in the mix. When I rented my first apartment, I was actually required to show that I was employed, and that my monthly income was at least 2.5X the monthly apartment rent. The owners wanted proof that the people moving in would have the financial means to pay rent during their lease. In the past, home prices have always gone up and it's generally been easy to sell a home, so I don't think that foreclosure has ever been a concern of a renter. Today, foreclosure on rental homes is common and I think it's a worry.
I think a prospective tenant should be able to request a mortgage payment stub showing the monthly payment, PITI (financial information blacked out) as well as something showing the source of any makeup income needed. I'd tell the landlord to black out any sensitive financial information they weren't comfortable sharing. Basically, if the mortgage (PITI) is $3000 a month and they are leasing for $1500 a month, and the landlord is unemployed, where's the extra $1500 a month coming from? I think that situation would be high risk at foreclosure.
I think the reason why I feel this way today is many people only rent their house after they've tried to sell it for six months and are getting close to running out of money, so they try to rent it as a last ditch effort to pay the mortgage. I wouldn't want to rent that house. On the other hand, there are people who purchased long ago and have no mortgage or only a little one, and they've rented the place for years. Maybe the amount of rent they charge is greater than the mortgage payment. In that case, I think the chance of foreclosure is much smaller.
Any thoughts?
I think your suggestion is completely reasonable and tenants have legitimate concerns considering the volatile housing market. I would have the same concerns if I were a renter now and it would not be overly cautious to ask for reasonable proof of stability. I will ask applicants to black out bank account numbers - for their own comfort as I just want to know if they have money in the bank and people can be protective of their information - including landlords. I would look for landlords who have been in the business for a while as - to me - they are less likely to foreclose than say, someone who is a first-time landlord.
I am going to jump in here if you all don't mind...
I live in Wisconsin, and here we have all of our court documents on line. Yes we do. I'm not sure what other states have them available to the public, but its all there. Not the credit. But the court actions. The evictions...both ways. The small claims suits. The foreclosures. Its not a credit report, but you get a good idea of what is going on with the person or the business.
It is a bit unsettling for people what with drunk driving charges, and divorces, restraining orders, and all the juicy stuff.
And of course in the foreclosure suit, the borrower hasn't paid for quiet a while before it gets to court.
The typical answer from landlords in foreclosure is that they are handling it. Yes they are. They are handling it to the best of their advantage. Your guess as to what that is is as good as mine.
Im just saying that there are a lot of ways to find out about the financial situation of people that you may enter into an agreement with.
I have to say, that my landlord was kind of creepy, but the townhouse was perfect. So, I was blinded. I did do a property tax search before I gave him my deposit because I wanted to be sure he actually owned the property!
And if you think that is silly, google it and you will see that people are posing as owners and renting property to unsuspecting people taking first and last months rent, and as much as they can get away with.
It's been pretty interesting reading the banter going back and forth on this subject I started, and pretty insightful.
I'll add some past experience in the mix. When I rented my first apartment, I was actually required to show that I was employed, and that my monthly income was at least 2.5X the monthly apartment rent. The owners wanted proof that the people moving in would have the financial means to pay rent during their lease. In the past, home prices have always gone up and it's generally been easy to sell a home, so I don't think that foreclosure has ever been a concern of a renter. Today, foreclosure on rental homes is common and I think it's a worry.
I think a prospective tenant should be able to request a mortgage payment stub showing the monthly payment, PITI (financial information blacked out) as well as something showing the source of any makeup income needed. I'd tell the landlord to black out any sensitive financial information they weren't comfortable sharing. Basically, if the mortgage (PITI) is $3000 a month and they are leasing for $1500 a month, and the landlord is unemployed, where's the extra $1500 a month coming from? I think that situation would be high risk at foreclosure.
?
We have gone from being landlords to renting ourselves this past year and a half.
As a landlord, I would be ok with providing a statement from my bank saying that I am up to date on payments, but would not allow a tenant to either do a credit check on me, or to see my pay stubs and PITI information. Absolutely not.
The risk of a transaction going wrong is much higher to the landlord. A tenant who does not pay, or causes damage can seriously affect a homes's value; cost countless thousands in damage, or even lead to a loss of that home altogether.
A tenant who has a landlord who doesn't pay the mortgage, has a valid complaint for sure. It would be inconvenient in the extreme - but there is a finite amount of money that can be lost. The deposit - which they can go to small claims court to recoup, and moving costs. Plus the inconvenience factor.
If our landlord came to us tomorrow and told us we had to move out, I would be pissed. Absolutely. But it's not the end of the world. We would just find something else.
A landlord who has a tenant who doesn't pay, could face disaster. They may not be able to get said tenant out until foreclosure proceedings are already underway, and not have the funds to make up the short fall of a dead beat tenant.
To me it is absolutely fair and necessary for a landlord to ask for a credit check and references from me as a tenant, but not for me to ask it of them. I don't like a landlord asking for emplyment info, but again, I can see why some do, and as we have nothing to hide and I recognize that they are taking a far bigger risk having us as a tenant, than we are by having them as a landlord, I would be ok with it.
Having the deposit in a seperate account is as someone mentioned legally required in NJ, and probably should be everywhere.
... but would not allow a tenant to either do a credit check on me, or to see my pay stubs and PITI information.
Why wouldn't you let the tenant see what the monthly mortgage payment is on the house (PITI information)? It's public record anyway, so I can go down to the county courthouse and look it up. The only thing I can't look up is the insurance cost, but this is usually small compared to the rest of the payment.
For you, it might not be disaster if you have to pick up and move tomorrow. For many other people, it is. It's disaster is you don't have first month, last month, and deposit saved up to rent a replacement place and cannot get a bridge loan to cover these costs. Your other option is to live in a motel, which many people do but is basically disaster for them.
... or causes damage can seriously affect a homes's value; cost countless thousands in damage, or even lead to a loss of that home altogether.
How does the fact that the tenant has a job or has a good credit score indicate they will not damage the home while they are living in it I don't see an obvious correlation between the two.
I know people who destroy every rental they are in, yet they have reasonable credit and stable jobs.
Why wouldn't you let the tenant see what the monthly mortgage payment is on the house (PITI information)? It's public record anyway, so I can go down to the county courthouse and look it up. The only thing I can't look up is the insurance cost, but this is usually small compared to the rest of the payment.
Well if they want that information, then they can go to city hall to get it then.
Quote:
Originally Posted by bigtrees
How does the fact that the tenant has a job or has a good credit score indicate they will not damage the home while they are living in it I don't see an obvious correlation between the two.
I know people who destroy every rental they are in, yet they have reasonable credit and stable jobs.
This is true for the most part, but credit checks show that at least the person is likely to pay the rent. It does not show that they won't destroy the home - that is what references are for.
Honestly, I understand that it is a riskier time for tenants now than before, but a tenant who makes these kinds of demands doesn't sound like the kind of tenant I would like to have in a place that I own. It sounds like trouble, and sets my alarm bells ringing. I have never had a problem either with one of my tenants or with a landlord while I have been the tenant, and I prefer to keep it that way. A tenant who is this demanding before they have even moved in, is just not for me.
You may be better off renting from a corporation with a management company because they have people paid to deal with stuff like this.
Good luck!
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