Landlord Question and Answer Forum

I have a rental application from a family with the usual story: husband lost job, they were foreclosed on, now they're looking for a rental lease. The wife is a teacher and makes only so-so money. Is this a case of being sympathetic to a family in hardship, or setting myself up for non-payment of rent and a lengthy, expensive eviction process in a few months?

Is the husband working now? How long was he unemployed? It's one thing to be unemployed for 6 months, it's another to be unemployed for 2 years. What did he do beforehand, was he in a relatively strong industry, or in an industry that's floundering? Finally, I'd look at the rest of their credit history, and see if they have a habit of ignoring their bills, or if this was a one-time thing.

Posted by Gregory T, CA on Wednesday, September 29, 2010

The Question that needs answered is, based on the current household income do they make enough to cover the rent. It seems that the question you want to ask is "Does foreclosure automatically make someone a credit risk?" It would be truely disturbing to learn that after foreclosure no one would rent you an apartment. that would be an awful world to live in

Posted by Robert W, DC on Thursday, September 30, 2010

Cashflow. It's all about whether or not they both have enough income to cover their rent and monthly personal expenses. 30% to 40% of income is where I try to estimate my maximum amount of rent to income to see if they can afford it. For example, if a family makes $4000 a month, and rent is $1200 per month, then the ratio of rent to income is 30% which would fall within my personal standards. If they were making only $3000 a month the ratio would go up to 40% and I would NOT rent to them -- CASHFLOW!!! Hope this helps. :)

Posted by Raj N, IL on Thursday, September 30, 2010