Screening Renters
I have a property that is in a low income area of town, the house rents for $500 a month, and is always rented by minorities that usually have no credit history. The renters stay an average of 6 months before they move. Is this the nature of the beast, or should I be more cautious when renting?
I love rentors with no credit history. They are by best tenants. But mine are not transient. Do they have SSNs or green cards? What is their occupation? If you are having trouble with turn over, you need to establish the cause. Is it the tenant's occupation, the neighborhood, etc?
Brenda
I have lower rent duplexs not far from you (Midlothian) and have had long term tenants. My longest tenant has been there for 7 years.
I don't worry about credit score much when qualifying a tenant, but verify employment/income. Are you evicting most tenants or are they moveing out. Raise deposit if too many are moveing out without fullfilling 1 year lease.
Is this a problem for you?
If your unit rents again very quickly and at an increase and the departing tenants have left things in good condition, is there a problem? You must be letting your units go for mo-mo lease, correct? Your market always dictates the basics w/a property. If you want longer term tenants, why not take a section 8 tenant there?
I would use the high turnover as a positive and raise the rent a little bit after every tenant leaves. I agree with the above response that says increase security deposit (if your local laws allow you to), this will help the tenants want to stay longer and if they don't - you can recover by taking the deposit to fix up/re-rent the place. A lot of landlords prefer shorter term leases like 6 month or even month to month leases... This gives them opportunities to raise rent and keep them at market value or even slightly higher (Assuming it's not a pain to find renters).
Good Luck to you!
[addsig]
You might want to offer to take weekly payments. Most low income people find it hard to save up for the rent, so taking weekly payments can be a plus for them.
And remember, right now you charge $500/mo but if you break it up to $125 a week your total take will actually be $541.66 a month on average. So you make a little extra dough ( $500 a year more). Just a thought.
[addsig]
I like your idea of collecting rent weekly. Your right that most lower wage jobs pay weekly.
I actually go to the tenants on the first to collect the rent. I always have to go back a few times between the first and fifth (when late fees start) before I have it from everybody. So basically the first week of the month I'm there daily, but not much for the rest of the month.
Collecting weekly would cause me to be at the units almost dailly?
How do you collect the rent without it being a PITA when you do it weekly?
Collecting weekly scares me as well unless you have an onsite mgr or something like an apt complex. I reccomend having a PO box where they send the checks thereby reducing your travel time.
Also, if you are new to low income rentals, I highly reccomend Robert Shemins book "Secrets of a millionaire landlord"