Is My List of Renter Qualifiers Too Stringent? (tenant, negotiations, evicted)

[thrillobyte]

Got a 4+2 1500 sf. in the Glassell Park Los Angeles area to rent for $3K. Good area at the top of the hill. The area is red hot for renters, but everybody answering the ad is so underqualified I might never get it rented. Most everybody is self employed in the craziest kinds of jobs you ever heard of. One was a self-described "private clothes buyer to the stars". Wonder how secure his job is.

Here's part of my ad:

All applicants will have their backgrounds checked. Application fee $50; refunded to successful applicant.
The successful candidate will have
* valid SS number
* AGI of $6000+ (3x's AGI, that's the rule of thumb)
* FICO score of 700+
* verifiable address history for the last 5 years w/
clean rent payment record
* no prior criminal convictions
* no registration in the national sex offender registry
* no prior evictions
* no current/past judgements
* verfiable employment history for last 5 years
* DTI ratio of 35% or below
* security deposit of $6000

Nearly all of this is taken off tenant screening services sample reports so nothing is out of the ordinary. What am I doing wrong? Why aren't I getting quality applicants working around the corner in downtown Los Angeles who are positioned with good jobs?

[Electrician4you]

Nothing. I have about the same requirements. I only charge $35 because that's what Transunion (which I use) charges. I had the same issue as you on my latest rental. I got some advice from another member (you know who you are. Enjoy the coffee) and while I slightly lowered my credit score rating I kept everything else the same. I waited because while people met the credit rating they couldn't meet other guidelines which I wasn't willing to bend on. I dropped the price $100 and the difference was immense. I'm talking about 8-10 calls per day during the week and 20-25 on Friday Sat Sunday. Lots of the prospects I screened over the phone in about 5 minutes.
I did find a great tenant. It took about 30 days to find the renter that passed the qualifications. I'm glad I waited it out.
The advice I got from two other property managers was wait. The right tenant will come along. I had no issues "losing" a months rent if it meant not letting some desperado in the front door. Like you, you wouldn't believe some of the stories, excuses and "see here is the thing" start to conversations

[Rabrrita]

* FICO score of 700+ Why? Leave the number out and make a decision based on the actual information in the credit report, not some score.

* no prior criminal convictions Go carefully and make sure you can support why you are refusing to rent based on the conviction. You can refuse due to criminal convictions, but you need to make sure it;'s not unduly discriminatory. Your business attorney can explain how this plays out and advise you the best way to handle it.

* no prior evictions Is that successful or any filed?

* DTI ratio of 35% or below Geez they are renting not buying the place!

* security deposit of $6000 Cut it to one month only and see what happens.

Truthfully, your almost as bad as a mortgage lender. We have multiple luxury high rises and we are not that in your face with the requirements.

As far as the application fee, make sure it;s within the legal amount CA says you can charge and that you adhere to the accounting of the fee.

[rekab23]

It sounds reasonable to me, and is actually what most rental applications require. Although, in L.A, you're going to run into a few renters with creative and off beat occupations. Self employment can be a tricky one though.

[freemkt]

Originally Posted by Rabrrita

* FICO score of 700+ Why? Leave the number out and make a decision based on the actual information in the credit report, not some score.

* no prior criminal convictions Go carefully and make sure you can support why you are refusing to rent based on the conviction. You can refuse due to criminal convictions, but you need to make sure it;'s not unduly discriminatory. Your business attorney can explain how this plays out and advise you the best way to handle it.

* no prior evictions Is that successful or any filed?

* DTI ratio of 35% or below Geez they are renting not buying the place!

* security deposit of $6000 Cut it to one month only and see what happens.

Truthfully, your almost as bad as a mortgage lender. We have multiple luxury high rises and we are not that in your face with the requirements.

As far as the application fee, make sure it;s within the legal amount CA says you can charge and that you adhere to the accounting of the fee.

I never pay an application fee unless the screening criteria are explicitly stated. Just like a trial lawyer should never ask a question without already knowing the answer.

[Zippyman]

I don't think you need the fico requirement if you've got good landlord refs & no judgements/evictions. You can be in the 640 area & still have no major dings..

Also, the dti requirement would be confusing for many tenants - they aren't the type to read an entire paragraph & don't necessarily make the best financial decisions - if you require no debt & rock-star credit & huge income, those people don't need to rent, they'll be tenants for a year & buy a house of their own.

I might lower the security to one month's rent & perhaps 1.5 months with pets..

I'd personally include a blurb about picking the best tenant available from those that apply & specify who gets preference - I.e., longer rental history, higher gross income, or whatever you decide.

[freemkt]

Originally Posted by Zippyman

I don't think you need the fico requirement if you've got good landlord refs & no judgements/evictions. You can be in the 640 area & still have no major dings..

Also, the dti requirement would be confusing for many tenants - they aren't the type to read an entire paragraph & don't necessarily make the best financial decisions - if you require no debt & rock-star credit & huge income, those people don't need to rent, they'll be tenants for a year & buy a house of their own.

I might lower the security to one month's rent & perhaps 1.5 months with pets..

I'd personally include a blurb about picking the best tenant available from those that apply & specify who gets preference - I.e., longer rental history, higher gross income, or whatever you decide.

As a frugal poor person, I think the ability to manage limited resources should be considered more favorably than higher gross income poorly managed.

[Electrician4you]

Originally Posted by freemkt

As a frugal poor person, I think the ability to manage limited resources should be considered more favorably than higher gross income poorly managed.

Doesn't matter. You can be frugal, but either can be bad. You may be frugal but that means you on a tight budget, so you can easily and most likely more often run into a problem and NOT be able to dig your way out, where a higher gross income person can.

To OP.
My requirements are somewhat similar . My deposits are one month. I dont do two months (even though I was offered from people with bad credit) but I declined. I did look into it tried it and didn't work so I scratched that out. Because people had bad credit and the deposit doesn't guarantee I'm gonna get paid. But they offered. Tenants with good credit didn't have to offer that. Their income and credit spoke for them.

Two months is pretty hefty charges. (I did not register the 6k deposit you listed last. Sorry about that. ) Someone renting from you would need to come up with about 9,000 bucks then add in moving costs. Think about that. You're pretty hard hitting off the bat. At that point you're looking at a very narrow base of clients. Open that up a bit. If they have pets you can ask a bit more. If I was renting I would gave a hard time giving you 9k. I sometimes place myself in the tenants shoes and look at what I'm asking and what I'm willing to negotiate on. One thing I found out is everything is negotiable when it comes to money. I had tenants ask if there are discounts or negotiations. Sometimes I drop the price if the tenant is great and I want them. Remember I'm competing with other local tenants for the same customer. I dropped $100 on my rental because I undercut my nearest competitor by $50 and everyone else by another $50.


Trans Union doesn't show me their credit score anymore so I look at their payment history. That speaks volumes. When Transunion used to show credit scores I had a 700 credit score requirement. I used to take 700 and above but on my latest rental I dropped to 650 and higher. That opened up a larger base, and I can still deny on other things like payment history.. 650 isn't great but it's not terribly bad. There are other indicators of tenant worthiness. The tenant I got by looking at his report never missed a payment and his income was 4x rent amount.

35% DTI isn't out of the realm but most rental tenants carry higher debt ratios. I accept up to 40%. After that it gets iffy

As far as evictions it has to show up on the report. Most people who are about to or have been evicted have crappy payment history. If it's not there it's not there.

Criminal stuff? If it's recent yeah I tend to shy away. But traffic citations DUI stuff I don't care about. People screw up sometimes. It has to be convictions of major crime stuff. Child molester it's a no. I don't care if I get sued on that. My neighbors have kids.

Your monthly rent price isn't outrageous for the area, so thas good.

One thing I found out is over the years people tend to be very truthful about their situation when asked. Sure there are some liars out there but most are truthful. What I would do is pay attention to the history of payments, (the credit score follows payments and debt/credit. Trans union doesn't give me the SS numbers. I still need a application filled out though.

No matter what you do, it's a game of chance. I had tenants that look great on paper who were horrible people. And I had not the greatest on paper who paid everything and were great people.

[Scooby Snacks]

Originally Posted by thrillobyte

Got a 4+2 1500 sf. in the Glassell Park Los Angeles area to rent for $3K. Good area at the top of the hill. The area is red hot for renters, but everybody answering the ad is so underqualified I might never get it rented. Most everybody is self employed in the craziest kinds of jobs you ever heard of. One was a self-described "private clothes buyer to the stars". Wonder how secure his job is.

Here's part of my ad:

All applicants will have their backgrounds checked. Application fee $50; refunded to successful applicant.

(application fee is too expensive and the loser is flushing his/her money down the toilet. It looks like there are a lot of losers, too).

Originally Posted by thrillobyte

The successful candidate will have
* valid SS number

(reasonable)

Originally Posted by thrillobyte

* AGI of $6000+ (3x's AGI, that's the rule of thumb)

That's a high salary requirement, but up to you.

Originally Posted by thrillobyte

* FICO score of 700+

(Here we go again with credit score. And your requirement is over the top anyway.
If they make the $$$ and a clean background why are you hung up on credit score? There are numerous reasons a person can have bad credit, and if it's poor and they are in the process of improving it over time, a good rental history will help.

Originally Posted by thrillobyte

* verifiable address history for the last 5 years w/
clean rent payment record

(reasonable)

Originally Posted by thrillobyte

* no prior criminal convictions

(criminal as in what? Misdemeanor or felony? There's a big difference between the two).

Originally Posted by thrillobyte

* no registration in the national sex offender registry

(reasonable).

Originally Posted by thrillobyte

* no prior evictions

(way more important than credit score).

Originally Posted by thrillobyte

* no current/past judgements

(reasonable)

Originally Posted by thrillobyte

* verfiable employment history for last 5 years

(does that mean self employment is unacceptable? Just because someone is self employed doesn't make them a bum. If they pay their rent every month and are self employed they must be doing something right.)

Originally Posted by thrillobyte

* DTI ratio of 35% or below

(what's a DTI?)

Originally Posted by thrillobyte

* security deposit of $6000

(security deposit should be the standard one month rent).

Nearly all of this is taken off tenant screening services sample reports so nothing is out of the ordinary. What am I doing wrong? Why aren't I getting quality applicants working around the corner in downtown Los Angeles who are positioned with good jobs? [/quote]

Your requirements are too stringent. It's your property; you can require whatever you want as long as your requirements are legal. But I doubt you'll get many applicants, even. I suggest you lower your standards and you'll eventually find a good renter.

[Koale]

Hire a Professional company to handle this for you.
Koale