Potential Tenants

[EdRenkema]

I have 3 applicaitions for a townhouse in Hamilton, 2 of them are not keepers, first a couple with 3 kids and a big dog and shaky references, poor credit, every time I called them there is pandemonium in the background, second 3 young guys who`ve never lived together, one still lives at home, one full time smoker, good jobs, good references.
My best candidates are a family of 3 adults, currently paying just above my asking rent, credit not so good but stellar references from 2 previous landlords - moving from current rental due to landlord selling house. They declined to rent earlier in the week but she called back today asking for a break on last month`s rent deposit, here is her message to me:

Hi Ed: Well we would love to rent your unit. However some terrible chain of events have occured recently, first the death in the family and then I had purchased a money order for $1500 so I had it available to a new landlord for last months rent and a little reserve towards first. I had left my purse on a bench at a park went to go and get it about 15 minutes later to find my ID money and money order gone. So now I no longer have any way to obtain last month again by Saturday when we have to move out of our current residence and due to the fact we would be moving mid month would be looking to pay for half a month as we did not reside somewhere a whole month. So basically, I would need to negotiate last month rent with someone and I will be getting back last month from my current landlady and that won`t be until 30 days after the move out...not sure why she is doing it that way but really cause we lived there half a month for her to offer the full month back is generous so whatever it takes I guess. I am not sure if you would negotiate last month with us (extra payments) or be able to wait till we get the refund back and accept the 662.50 for half of June on friday June 12 and allow us to move on the 13th. I realize it is a lot to ask of anyone but we are potentially homeless as of Sunday June 14th.You seemed to be such a kind man and I hope we can work something out to be able to rent from you. Let me know your thoughts on it I can meet you anytime after 3 on Friday with the 662 cash payment. We can then sign a lease and move on saturday if you would give us the keys on friday.Again, I know it is a lot to ask let me know either way.

Now I can see some of you rolling your eyes but I need tenants, they seem sincere and I would like to help these people out. They have first month rent, how can I set up my lease to require them to pay the last month rent deposit once they receive the other back?
I have put out a call to the current landlord and am waiting for a call back.
Bear in mind if I can pull this off I will instill incredible loyalty in my tenants.

 

[mortgageman]

I have two thoughts:

1. Forget about these people and keep looking for better tenants. The story is BS. When was the last time you forgot your purse or wallet on a park bench - especially when you had a $1500 money order in it. Try asking some open questions like "Where in the park was the bench? What did the purse look like? What was going on that caused you to forget about your purse?" I`m sure you`ll get some pretty evasive, non-specific answers that will indicate it`s BS.

2. If you really want these people, tentatively accept them with an initial deposit but make them aware that you are going to keep looking at other applications until they come up with the full amount of money you require. Tell them if a strong applicant comes along with the money they`ll have 24 hours to come up with the balance or they`ll lose their position. Be honest with any other applicant by telling them they`ll have to wait 24 hours before you can confirm the place is theirs.
If the first people come up with the cash in 24 hours, problem solved. If not, you`ve got someone else lined up already.

Do not give these people the keys under any circumstances until you have all the money you`ve requested. If a person had to choose between homelessness and borrowing some money from friends/family to satisfy their new landlord`s requirements I`m sure most would come up with the cash. You`ll be amazed at how money will appear as they get closer to their June 14th deadline.

Frankly, I think these people are trying to play you, especially with the flattering "you seem like such a kind man" routine.
I`m sure you are a good guy, but business is business and these people have no track record with you. They haven`t earned any leeway yet.

Cutting them a break won`t instill loyalty. If anything it will teach them that they should always try to play you for a break.

I`ve been in a couple of different types of businesses and have dealt with many tenants over the years and it`s the people who asked for a break and a got a break who always ended up taking advantage of me and my business partners.

Good luck. Let us know how it works out.
Jason

 

[margaretcowan]

Hi Ed

Like me, you have a good heart so I can appreciate where you`re coming from. However in my experience of owning multiplexes, single family houses and rooming houses, I found people like those you`re describing usually cause a series of problems to the landlord because something is always happening to them in their chaotic lives.

You say they`re three adults. Are the other two adults working? What is their source of income? Why can`t they pay the deposit? You say their credit is "not so good". What is "not so good" about it? These two items strike me as red flags.

I`ve rented to dubious people in a hurry to rent the unit only to have problems later, like having to call the bailiff to evict them. It`s less expensive in the long run to wait for a decent tenant.







QUOTE (EdRenkema @ Jun 6 2009, 12:41 PM) I have 3 applicaitions for a townhouse in Hamilton, 2 of them are not keepers, first a couple with 3 kids and a big dog and shaky references, poor credit, every time I called them there is pandemonium in the background, second 3 young guys who`ve never lived together, one still lives at home, one full time smoker, good jobs, good references.
My best candidates are a family of 3 adults, currently paying just above my asking rent, credit not so good but stellar references from 2 previous landlords - moving from current rental due to landlord selling house. They declined to rent earlier in the week but she called back today asking for a break on last month`s rent deposit, here is her message to me:

Hi Ed: Well we would love to rent your unit. However some terrible chain of events have occured recently, first the death in the family and then I had purchased a money order for $1500 so I had it available to a new landlord for last months rent and a little reserve towards first. I had left my purse on a bench at a park went to go and get it about 15 minutes later to find my ID money and money order gone. So now I no longer have any way to obtain last month again by Saturday when we have to move out of our current residence and due to the fact we would be moving mid month would be looking to pay for half a month as we did not reside somewhere a whole month. So basically, I would need to negotiate last month rent with someone and I will be getting back last month from my current landlady and that won`t be until 30 days after the move out...not sure why she is doing it that way but really cause we lived there half a month for her to offer the full month back is generous so whatever it takes I guess. I am not sure if you would negotiate last month with us (extra payments) or be able to wait till we get the refund back and accept the 662.50 for half of June on friday June 12 and allow us to move on the 13th. I realize it is a lot to ask of anyone but we are potentially homeless as of Sunday June 14th.You seemed to be such a kind man and I hope we can work something out to be able to rent from you. Let me know your thoughts on it I can meet you anytime after 3 on Friday with the 662 cash payment. We can then sign a lease and move on saturday if you would give us the keys on friday.Again, I know it is a lot to ask let me know either way.

Now I can see some of you rolling your eyes but I need tenants, they seem sincere and I would like to help these people out. They have first month rent, how can I set up my lease to require them to pay the last month rent deposit once they receive the other back?
I have put out a call to the current landlord and am waiting for a call back.
Bear in mind if I can pull this off I will instill incredible loyalty in my tenants.

 

[jwilbrin]

QUOTE (EdRenkema @ Jun 6 2009, 01:41 PM) I have 3 applicaitions for a townhouse in Hamilton, 2 of them are not keepers, first a couple with 3 kids and a big dog and shaky references, poor credit, every time I called them there is pandemonium in the background, second 3 young guys who`ve never lived together, one still lives at home, one full time smoker, good jobs, good references.
My best candidates are a family of 3 adults, currently paying just above my asking rent, credit not so good but stellar references from 2 previous landlords - moving from current rental due to landlord selling house. They declined to rent earlier in the week but she called back today asking for a break on last month`s rent deposit, here is her message to me:

Hi Ed: Well we would love to rent your unit. However some terrible chain of events have occured recently, first the death in the family and then I had purchased a money order for $1500 so I had it available to a new landlord for last months rent and a little reserve towards first. I had left my purse on a bench at a park went to go and get it about 15 minutes later to find my ID money and money order gone. So now I no longer have any way to obtain last month again by Saturday when we have to move out of our current residence and due to the fact we would be moving mid month would be looking to pay for half a month as we did not reside somewhere a whole month. So basically, I would need to negotiate last month rent with someone and I will be getting back last month from my current landlady and that won`t be until 30 days after the move out...not sure why she is doing it that way but really cause we lived there half a month for her to offer the full month back is generous so whatever it takes I guess. I am not sure if you would negotiate last month with us (extra payments) or be able to wait till we get the refund back and accept the 662.50 for half of June on friday June 12 and allow us to move on the 13th. I realize it is a lot to ask of anyone but we are potentially homeless as of Sunday June 14th.You seemed to be such a kind man and I hope we can work something out to be able to rent from you. Let me know your thoughts on it I can meet you anytime after 3 on Friday with the 662 cash payment. We can then sign a lease and move on saturday if you would give us the keys on friday.Again, I know it is a lot to ask let me know either way.

Now I can see some of you rolling your eyes but I need tenants, they seem sincere and I would like to help these people out. They have first month rent, how can I set up my lease to require them to pay the last month rent deposit once they receive the other back?
I have put out a call to the current landlord and am waiting for a call back.
Bear in mind if I can pull this off I will instill incredible loyalty in my tenants.

There are so many red flags on this one, I would without a question keep looking for a better tenant. Bad credit -- keep looking. Good references from previous landlords doesn`t mean much when the tenants are currently financially strapped. I`ve found most people who live pay cheque to pay cheque have a very difficult time recovering once they start to fall behind. I would be very wary about starting down this path. I have had wonderful tenants in the past who had rented from me for years and unfortunately for various reasons started to fall behind -- they never recovered. Finally after a few months of late payments and bounced cheques, I asked them to look for something cheaper to rent. I did get all my rent out of them since they were sincere individuals but unfortunately I am not a charity and neither are you. We are running a business and you have to treat it as such. Yes, there is a certain amount of compassion and flexibility that you can extend but starting off like this is not a good sign.

It sounds to me like they are playing on your kindness and good will. To have such a streak of bad luck is very fishy. It really could be a streak of bad luck or individuals who habitually make bad decisions.

My advice would be to keep looking. It`s better to have a vacancy than to have tenants that will cause you stress and frustration.

 

[Savard]

I stopped reading the "hard-luck" story in the second sentence. You are running a business.

Our analysis of tenants who don`t have a security deposit in full right away have a significantly lower representation in our "A" class of tenants.


If you are looking for advice? Do not start a business relationship with someone that does not have the money. If you want to give to charity than donate to charity i.e. give them money, mentor them, feed them, do something to help them etc.

 

[NeilUttamsingh]

QUOTE (EdRenkema @ Jun 6 2009, 03:41 PM) I have 3 applicaitions for a townhouse in Hamilton, 2 of them are not keepers, first a couple with 3 kids and a big dog and shaky references, poor credit, every time I called them there is pandemonium in the background, second 3 young guys who`ve never lived together, one still lives at home, one full time smoker, good jobs, good references.
My best candidates are a family of 3 adults, currently paying just above my asking rent, credit not so good but stellar references from 2 previous landlords - moving from current rental due to landlord selling house. They declined to rent earlier in the week but she called back today asking for a break on last month`s rent deposit, here is her message to me:

Hi Ed: Well we would love to rent your unit. However some terrible chain of events have occured recently, first the death in the family and then I had purchased a money order for $1500 so I had it available to a new landlord for last months rent and a little reserve towards first. I had left my purse on a bench at a park went to go and get it about 15 minutes later to find my ID money and money order gone. So now I no longer have any way to obtain last month again by Saturday when we have to move out of our current residence and due to the fact we would be moving mid month would be looking to pay for half a month as we did not reside somewhere a whole month. So basically, I would need to negotiate last month rent with someone and I will be getting back last month from my current landlady and that won`t be until 30 days after the move out...not sure why she is doing it that way but really cause we lived there half a month for her to offer the full month back is generous so whatever it takes I guess. I am not sure if you would negotiate last month with us (extra payments) or be able to wait till we get the refund back and accept the 662.50 for half of June on friday June 12 and allow us to move on the 13th. I realize it is a lot to ask of anyone but we are potentially homeless as of Sunday June 14th.You seemed to be such a kind man and I hope we can work something out to be able to rent from you. Let me know your thoughts on it I can meet you anytime after 3 on Friday with the 662 cash payment. We can then sign a lease and move on saturday if you would give us the keys on friday.Again, I know it is a lot to ask let me know either way.

Now I can see some of you rolling your eyes but I need tenants, they seem sincere and I would like to help these people out. They have first month rent, how can I set up my lease to require them to pay the last month rent deposit once they receive the other back?
I have put out a call to the current landlord and am waiting for a call back.
Bear in mind if I can pull this off I will instill incredible loyalty in my tenants.

Ed,

I am just heading out the door now...but just read your post, and I am very glad that I did.

Their story is major BS. I just declined them today. Apparently, I am the `other landlord` that they had a money order for $1500 for.

...that is pretty funny, because that is the first I heard of it. ($1500)

She was giving me a BS story that she was not getting her last months back from her landlord until 5 days after she moved out. Her story was too sketchy, so I cut them loose today.

I will have to say though that she is a extremely good actor. She almost had me fooled, but then I dug deep and reminded myself that I had to treat things like a business and remove all emotions from this decision.

She is major bad news.

Regards,
Neil.

 

[HeatherBrandt]

Sounds like Neil has the winning post of the day. But pretending you didn`t have this information:

I agree with the other posts. Odds are you`ll regret this renter.

As Jason said, get a few more details that may influence your decision:
-ask for a copy of the police report, if not reported, tell her to report it now and give you a copy.
-suggest borrowing from family, friends, explain borrowing money causes severe inequality in a business relationship. Tell her best to start off on equal footing.
-suggest she get an advance from her credit card.
-buy something from her worth more than $1500 in exchange for last months rent. Then she`ll have some skin in the game.

We too have had renters who once behind the eight ball, had no ability to get out of the way.

I also note that the email is well written. This is by effort and/or education.

Admitted, I have walked away from my purse in a public place. Never with a large sum in it, (hopefully by design rather than luck) and never asking for more than empathy for my stupidity.

Good luck,

 

[EdRenkema]

Thanks everyone, I admit it I`m a sucker for a good story, I so much want to believe people.

My first tenants in Hamilton bounced their first rent cheque and then she claimed she couldn`t deposit the cash since she got hit by a bus on her bike. I was out of town and 7 days later collected the cash - all true she was actually pretty beat up. She remains my best tenant, always calls if the cheque may not clear and gets me the funds in another way. I just signed her to another year, and my place looks great.

 

[JoefromTO]

QUOTE (EdRenkema @ Jun 6 2009, 03:41 PM) I have 3 applicaitions for a townhouse in Hamilton, 2 of them are not keepers, first a couple with 3 kids and a big dog and shaky references, poor credit, every time I called them there is pandemonium in the background, second 3 young guys who`ve never lived together, one still lives at home, one full time smoker, good jobs, good references.
My best candidates are a family of 3 adults, currently paying just above my asking rent, credit not so good but stellar references from 2 previous landlords - moving from current rental due to landlord selling house. They declined to rent earlier in the week but she called back today asking for a break on last month`s rent deposit, here is her message to me:

Hi Ed: Well we would love to rent your unit. However some terrible chain of events have occured recently, first the death in the family and then I had purchased a money order for $1500 so I had it available to a new landlord for last months rent and a little reserve towards first. I had left my purse on a bench at a park went to go and get it about 15 minutes later to find my ID money and money order gone. So now I no longer have any way to obtain last month again by Saturday when we have to move out of our current residence and due to the fact we would be moving mid month would be looking to pay for half a month as we did not reside somewhere a whole month. So basically, I would need to negotiate last month rent with someone and I will be getting back last month from my current landlady and that won`t be until 30 days after the move out...not sure why she is doing it that way but really cause we lived there half a month for her to offer the full month back is generous so whatever it takes I guess. I am not sure if you would negotiate last month with us (extra payments) or be able to wait till we get the refund back and accept the 662.50 for half of June on friday June 12 and allow us to move on the 13th. I realize it is a lot to ask of anyone but we are potentially homeless as of Sunday June 14th.You seemed to be such a kind man and I hope we can work something out to be able to rent from you. Let me know your thoughts on it I can meet you anytime after 3 on Friday with the 662 cash payment. We can then sign a lease and move on saturday if you would give us the keys on friday.Again, I know it is a lot to ask let me know either way.

Now I can see some of you rolling your eyes but I need tenants, they seem sincere and I would like to help these people out. They have first month rent, how can I set up my lease to require them to pay the last month rent deposit once they receive the other back?
I have put out a call to the current landlord and am waiting for a call back.
Bear in mind if I can pull this off I will instill incredible loyalty in my tenants.

The only comment I want to make about this is the first months rent thing. Note where I highlighted in red. In Ontario, (correct me if I`m wrong here but I don`t think I am) a landlord CANNOT evict a tenant for not paying last months rent. Infact, they can`t even serve a notice because tenically last months rent cannot be in arrears. So...if the monthly rent is $1,000.00 and an applicant has $1,000.00 on them...that goes to last months rent NOT first! This way, when the day comes for them to move in, provided they were accepted, if they don`t show up without the other $1,000.00...they do not get the appartment AND I usually just return the last months rent and decline renting to them flat out...because I no longer trust them....but that`s just me.

Also, I read the entire post and saw that another member seemed to have come accross the same people. I`m glad to see that their BS story was uncovered. Iv`e had very similar stories presented to me as well and I too may start to "feel". But Iv`e been burnt before by letting my emotions make my decisions for me and have vowed not to allow that to happen again. Once the tenants are in...its very hard to get them out, not to mention they way you feel while trying to get them out.

 

[invst4profit]

Ontario!!!!!!!!

Your being played by profesional tenants.

 

[Goodstuff]

Very likely these people are professional renters.Once they`re in they won`t pay the rent and it will be months and months before you can ever get them out.
I knew of one previous landlord who fought with these type of people for almost a year. Never got his rent. Took him that long to get them out of his place.

He gave up on real estate and vowed never to return.

If these people need help that badly there are hundreds of charities - private and government - that will help them in their "time of need".

DON`T BE A SUCKER.

 

[TodorYordanov]

This entire post is GOLD. Thanks Ed, Neil and everyone else for the education.
One comment: loyalty may have time limits - 24hrs, 1 week, 15 years. Who knows...

T.

 

[dburg]

Instead of "run forest run", I suggest "run Ed run". There are better tenants than this, keep a positive attitude and before you know it you will have proper tenants. Sounds like the BS meter is running high on this one Ed.

Dean

 

[housingrental]

Others posts above have covered your question but one thing is being overlooked re you don`t want:
, second 3 young guys who`ve never lived together, one still lives at home, one full time smoker, good jobs, good references.

You have applicants that have good jobs and good references. Whats the problem with them?
There young guys? You aren`t saying you don`t want them because there male or young are you?
One smokes? Similar probability as anyone else you`ll rent to and if the other two don`t smoke low likelihood of him smoking in your unit.
You should reassess these applicants unless there some other issues.

 

[EdRenkema]

QUOTE (housingrental @ Jun 7 2009, 10:18 AM) Others posts above have covered your question but one thing is being overlooked re you don`t want:
, second 3 young guys who`ve never lived together, one still lives at home, one full time smoker, good jobs, good references.

You have applicants that have good jobs and good references. Whats the problem with them?
There young guys? You aren`t saying you don`t want them because there male or young are you?
One smokes? Similar probability as anyone else you`ll rent to and if the other two don`t smoke low likelihood of him smoking in your unit.
You should reassess these applicants unless there some other issues.


Yes Adam I have reconsidered, the smoker was smoking outside when I got there and carelessly left his butt on the driveway. The others commented they were `part time` smokers - only after a few beers

and by the way would it be OK if they smoked in the garage? You get the picture, it will become a party house in a quiet family oriented neighbourhood, NO THANKS!!
And one still living at home?? like a first year university student and I`m sure you`ve seen that first hand, as you know I like clean well maintained units, even if I have to wait a bit to get the right tenants.

 

[invst4profit]

QUOTE ( @ Jun 7 2009, 03:20 PM) Yes Adam I have reconsidered, the smoker was smoking outside when I got there and carelessly left his butt on the driveway. The others commented they were `part time` smokers - only after a few beers

and by the way would it be OK if they smoked in the garage? You get the picture, it will become a party house in a quiet family oriented neighbourhood, NO THANKS!!And one still living at home?? like a first year university student and I`m sure you`ve seen that first hand, as you know I like clean well maintained units, even if I have to wait a bit to get the right tenants.

That`s the only way to do it. Better safe than sorry in Ontario where it is nearly impossible to get rid of a bad tenant.

 

[housingrental]

Ohh I see Ed
One smoker and two embarrassed to admit their smokers smokers
Surprisingly smoking smell can linger in some garages long time after smokers are done with it.


QUOTE (EdRenkema @ Jun 7 2009, 03:20 PM) Yes Adam I have reconsidered, the smoker was smoking outside when I got there and carelessly left his butt on the driveway. The others commented they were `part time` smokers - only after a few beers

and by the way would it be OK if they smoked in the garage? You get the picture, it will become a party house in a quiet family oriented neighbourhood, NO THANKS!!
And one still living at home?? like a first year university student and I`m sure you`ve seen that first hand, as you know I like clean well maintained units, even if I have to wait a bit to get the right tenants.

 

[AndyLuchies]

what an excellent series of posts here. This is what MYREINSPACE is all about. Great learning experience for me as i have a soft heart for those in need, especially the realization that its more emotionally difficult to evict a person who can`t pay, than to let someone in who can`t pay.

Glad I took the time to read it.

 

[JoefromTO]

I want to add another comment to this post. Forgive me for saying this, but I`d say that most people who say they have a soft heart are also saying they lack experience. When I refer to experience, there is good and there is bad. If all experience to be had as a landlord were good, everyone would do it. But like any business, there`s lot of bad experiences as well. It`s those bad experience that ultimately change your business strategies and make investors more aware of the BS that so many professional tenants have to offer.

When a person decides to buy a rental property, they become a business person. There are a whole different set of rules than buying a primary residence. They are now an investor who invests either their own money and/or someone elses. They worked hard for years to save in order to take this expensive step in their lives. If they invest other peoples money, then they are responsible to those other peoples hard earned money.

The investor does all the research and math involved to try and make the best possible purchasing decision. So much goes into the figures to ensure the place will at least carry itself with all expenses including vacancies. I can speak from experience when I say that I made a mistake renting the wrong person once, because the apartment was going to be vacant on the 1st of the month. I never made that mistake again. We factor in vacancies for that precise reason, so as long as we purchase the property correctly, then there shouldn`t be a strain on the cashflow to force us to rent to the wrong person.

So to address the "I have a soft heart" issue, please understand that when I say DON`T give into that emotion, its because the bad tenants don`t deserve that level of respect.

To be honest, I have a soft heart for the responsible investors who truly become the victim...especially in Ontario!

Why the heck can`t we charge security deposits anyway! Who`s the intelligent renter friendly politician who promoted that idea?

 

[NeilUttamsingh]

QUOTE (JoefromTO @ Jun 7 2009, 09:18 PM) I want to add another comment to this post. Forgive me for saying this, but I`d say that most people who say they have a soft heart are also saying they lack experience. When I refer to experience, there is good and there is bad. If all experience to be had as a landlord were good, everyone would do it. But like any business, there`s lot of bad experiences as well. It`s those bad experience that ultimately change your business strategies and make investors more aware of the BS that so many professional tenants have to offer.

When a person decides to buy a rental property, they become a business person. There are a whole different set of rules than buying a primary residence. They are now an investor who invests either their own money and/or someone elses. They worked hard for years to save in order to take this expensive step in their lives. If they invest other peoples money, then they are responsible to those other peoples hard earned money.

The investor does all the research and math involved to try and make the best possible purchasing decision. So much goes into the figures to ensure the place will at least carry itself with all expenses including vacancies. I can speak from experience when I say that I made a mistake renting the wrong person once, because the apartment was going to be vacant on the 1st of the month. I never made that mistake again. We factor in vacancies for that precise reason, so as long as we purchase the property correctly, then there shouldn`t be a strain on the cashflow to force us to rent to the wrong person.

So to address the "I have a soft heart" issue, please understand that when I say DON`T give into that emotion, its because the bad tenants don`t deserve that level of respect.

To be honest, I have a soft heart for the responsible investors who truly become the victim...especially in Ontario!

Why the heck can`t we charge security deposits anyway! Who`s the intelligent renter friendly politician who promoted that idea?

Joe,

Excellent post!

The real lesson that I took away here was, to COMPLETELY remove all emotion from the decision making process.

To your point, when people lack experience as landlords, generally, they feel `bad` for the hard luck professional tenant actors. Agreed.

To those new landlords reading this post, my advice to you would be to remove all your emotions for the process of selecting tenants. Treat your real estate investing like a business. You are not running a charity. Don`t be fooled. Do your due diligence and always trust your gut feeling.