Friday, July 10, 2015

“Should I rent to someone with a foreclosure?”

Answer: probably not.

 Please be aware that I am sensitive to anyone who is going through a foreclosure.  I am giving this advice from the vantage point of a real estate investor.

Foreclosed applicants on average have a 24% lower credit scores.  They also have four times as many 30 or more day delinquents or derogatory.

What that means, is history has a way of repeating itself.  A person is who is foreclosed on, has a poor history of paying obligations on time.  Do you really want to risk your investment to someone like that? Take the chance that they will not pay or pay late?  Evictions are not a fun ordeal.

It’s not only tempting, but some times feels necessary to fill a vacancy quickly.  Never let your feelings of disparity cause you to give up your standards.  Create your standards for tenant screening and stick to them. 

Hint on tenant screening.  Renting Authority provides a free Applicant Rating Report with every credit report.  Use the drop down menu next to the credit score and select the “Applicant Rating Report.”  This report shows you how an applicant compares to other applicants across the country.

Please contact me with any questions regarding this topic.

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