Who would you rent to?

[Marruss]

We have a 4 bedroom townhouse in Kitchener for rent. It is in great shape. Many updates & upgrades have been done to the townhouse since we`ve acquired it. It will be ready for tenants as of July 15th.

We have 3 prospective tenants who are all very interested in it.

Prospect #1
Family of 4 - mother, father & twin 2 year olds
They currently live in Edmonton and are relocating for her job. She manages a Red Lobster. I don`t know if he has a job lined up here yet.
Her parents came to check out the townhouse on their behalf. They are nice people, and the daughter (whom I`ve been corresponding with by email) also seems nice.
Their move in date is August 20th, and are unwilling / unable to change it to earlier in the month.

Prospect #2
Three grad students from the University of Waterloo. All 3 are doing their masters, one of which just got accepted to a 4 year PhD program.
They are looking to find a nice place for their entire masters / PhD program that is far away from the University. This townhouse is about a 15 minute drive from the University. The one who came by representing the others (who live out of town currently since the school year is out) was very mature and repsectful.
They were originally looking for a Sept. 1st move in date, but changed it to August 1st when I told them there were 2 other parties interested with earlier move in dates.

Prospect #3
Single mom, going through a separation, with 3 kids aged 11, 5, and 8 months. I`ve talked to her on the phone and she is very nice, and very honest. She said her credit isn`t perfect, but it`s not bad either. It sounds like her breakup from her ex is permanent as lawyers are now involved and papers have been served.
She makes enough money that rent is only about 40% of her total monthly expenses.
She can move in as early as July 15th.

Our next steps will be running credit checks on them, and calling their references and employers.

My question is - if all of their references & credit checks are similar, how do I decide which ones to choose? Should I be asking them more questions to find out what their intentions are (i.e. how long do you plan on renting) or will they just tell me what I want to hear anyway?

If we choose the grad students, do we get their parents involved an ask the parents to pay the rent or guarantee the rent? Anything else special with regards to grad students?

Thanks in advance for your help!

 

[REINteam]

I personally like renting to grad students (I know how I treated the place I was in and I know how others in the department treated theirs). Here is why:

1. Overall, most are responsible. In order to go through grad school you have to have a level of commitment to get there and to get through. They have already gone through the whole undergrad phase - for many this is the start of "real life".

2. Depending on the program they may have a stipend - meaning they get paid for the research they do...ie. guaranteed money coming in.

3. They can be a great source of future tenants due to new students to the same program.

4. Unlike your other prospects, grad students will look for roommates, probably from the same program and if someone needs to leave they have contact with new potential tenants that can split the rent. You are looking at 3 to 4 working individuals versus 1, maybe two with the other prospects.


Here are some questions I would want answered:

1. What program are you in and who is the director? You may want to know who the director is in case of non-payment - you can sound the horn to parents AND professors...this will make life very uncomfortable!
2. How long will it take to get your Masters? (most programs are 2 years)
3. Are you on a school stipend or scholarship? As mentioned above this can show where they money will come from AND if they are at a level where they received a scholarship or stipend it may show more responsibility
4. How big is the program you are enrolled in? think future tenants
5. Are you thinking of going further with your studies, PHD? And if so at the same institution? - if you get PhD students you could be looking at 3-4 years of renting


However, don`t think for a second that all grad students are clean and responsible. I was, the people I knew were, but this is no time to skimp on background checks. Talk to the parents, wouldn`t hurt to get them to co-sign, but definitely get their contact info. I would also talk to past landlords from their undergrad days. Also, make sure you have a great lease in place and are very clear with your stance on subletting. In the end you need to do your homework, but as I mentioned above, I like grad students...others on here may not!

Here are a few cons off the top of my head:

1. They are still young and they may change their mind about the program - so no guarantee they`ll be with you for the full 2 years
2. The other prospects you`ve listed may prove to be much longer lasting tenants - if they like the place and the landlord they might be with you for much longer than 2 years
3. They potentially will be making less money as grad students aren`t rich and if they are paid a stipend they aren`t huge.

Hope this helps.

Regards,

Ray Reuter
Real Estate Investment Network

 

[margaretcowan]

First, I wouldn`t rent to anyone I had not met face to face---all parties who will occupy the unit. I don`t care how nice one of the people seems on the phone. They or the other renters may be quite different in person. They should also see the unit before renting it. It may not be what they want when they see it. I`m thinking of the family and grad students who are out of town.

Ray has given a great reply for grad students. I`d want to know their income, how will they pay the rent, the past history of all of them with previous landlords including the ones before their present landlords. I agree with Ray`s idea of guarantors.

If the single mother checks out well income wise and credit wise and as you said, her separation looks final, she may be your best bet. She`s local, can view the townhouse and meet you to view it with her kids. She`s motivated to settle in a nice home and make a new life with her kids.

Good luck!
Margaret
www.italycookingschools.com

 

[housingrental]

1) Credit / income / references is unlikely to be the same. Screen before choosing. No need for prejudice.
2) Grad students are great tenants.
3) Yes you can ask to get guarantors signing on lease of grad students.
4) If you don`t rent to the grad students please send them my contact info as I have a number of high quality Kitchener rentals that have just come available that I`d be happy to take them through.

 

[invst4profit]

My choice would definitely be the grad students.

#1 is not stable as they are moving from out of provence, husbands employment is unknown and they have kids.
#3 I would never even consider. Rent at 40% of income is too high, three kids that will often be left alone in the home will do damage and being in transition as she is means instability. Too risky.

 

[InvestagainInc]

QUOTE (invst4profit @ Jul 6 2009, 10:07 AM) My choice would definitely be the grad students.

#1 is not stable as they are moving from out of provence, husbands employment is unknown and they have kids.
#3 I would never even consider. Rent at 40% of income is too high, three kids that will often be left alone in the home will do damage and being in transition as she is means instability. Too risky.

Agreed. with the grad students you know that they have budgeted for living and are mature enough to pay their bills. They will also be there for at least their term for school. There are too many variables with the other two candidates.

 

[CarrieKoch]

I`d choose grad students too.

I`ve had the pleasure of meeting 6 new students this week to rent several of our apartments and I would do it again and again. The parents are involved, willing to cosign and some even pay the rent for them! I just completed several inspections on apartments that are coming up on the one year and the tenants have given notice and I was pleasantly shocked and amazed at the condition of the apartments. Not a repair or touchup necessary. They all look brand new. And we also have a number of houses that have been rented but groups of friends and again...houses look exactly like the day they moved in and rent has never been late.

 

[lilbuffet]

Grad students for sure.....most of these people just finished their undergrad. They are most likely out of the crazy party phase and trying to focus on attaining their goals. They are very mature and can be highly responsible.