Why rent to people with bad credit? - Landlord Forum thread 352355

Why rent to people with bad credit? by Anonymous (IL) on May 23, 2017 @21:09

I've rented out several condos to people for the past 15+ years. I always pick people with 720+ credit scores. On this forum it seems people are renting to people with much lower credit scores. Why take that personal risk if you are not a large apartment complex? Or is it that certain "class" of properties can only attract certain "class" of people with poor credit? For example, are there people who live in trailer parks or the ghetto who have 720+ credit scores

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Re: Why rent to people with bad credit? by Katiekate (New York ) on May 23, 2017 @21:52	[ Reply ]

I, myself will not take a risk on someone with a low credit score. I have know. People in the upstate investors club that rent to the bottom of the market. They get as much cash as they can, ignore the maintenance, and the tenant. They don't expect the tenant to stay long, and the tenant usually just want to stay below their radar. It seems that being a slum lord can be very profitable. Just, I have enough of a hard time getting a good night sleep....

Re: Why rent to people with bad credit? by Garry on May 23, 2017 @22:12	[ Reply ]

I've been a LL for 37 years, currently own 20 SFHs, 10 of which are totally paid for, and others close to it. 3/4 of my places are in low income areas. When I first became a LL, I could only afford to buy in those low income areas. I currently have 4 tenants that have been with me from 11 to 20 years, and another 4 Ts that have been with me 5-10 years. Yes, over the years, I have evicted about 40 people for nonpayment of rent, so I probably take on a lot bigger risk when renting to low income people, than you do, when you rent to middle income people. I already assume that most of the people applying at my properties, already have a low credit score. So I only do M2M leases, and deal in cash or money orders for 6 months, till a T proves they can give me a check that won't bounce. In my view, running a persons credit score is overrated. I have NEVER ran a person's credit IN MY LIFE. Don't know how, and don't care to. What I have found out is, there are a lot of good people out there, NO MATTER WHAT income or credit score they have. I just have to work a little harder as a LL to find them. I'm glad you are doing OK in your landlording business, and for the way I got into the LL business, I feel I am doing OK, too.

Re: Why rent to people with bad credit? by Nicole (PA) on May 24, 2017 @07:40	[ Reply ]

I also rent to low income folks. yes, my "class" of properties attract a certain demographic. there is no one with a 720 credit score would rent one of my places. they, and I, could not afford it. I am in no way a slumlord but people live a different lifestyle than middleclass America hoping to get ahead some day.

Re: Why rent to people with bad credit? by P-Bone (NY and OH) on May 24, 2017 @08:29	[ Reply ]

I think it all depends on the market. I owned a rental in the suburbs of Buffalo, NY and I generally had to stick to 650 or better, because many people with 720+ and 3 times the income, can easily manage purchase of a house that would meet their needs in some of the lower end suburbs/city. All of my tenants ended up having well over 700, because I found high quality people that respected the way I kept my property, but were either in between properties or just didn't want the liability of the possible large repairs and maintenance. In the Dayton, OH area, I tried to rent out my 3 bedroom ranch after moving out and I was clear about my screening criteria and I got nothing but people on housing assistance and people that had well under 600 credit scores. I chose to sell instead of continuing to look because again, those with 650 or better in this area or similar areas, can find $60-$90k houses they can afford with $40k a year in income and scores over 650. I think it all depends on your individual market.

Re: Why rent to people with bad credit? by Anonymous on May 24, 2017 @09:16	[ Reply ]

Everybody situation is not the same. Credit score doesn't tell the whole story. This is a business and more importantly it's a people business. As far as I am concerned you take a risk no matter whom you rent to. It's just a matter of minimizing your risk in screening. A good credit score doesn't guarantee anything to me based on my experience. I learned that valuable lesson early on. It's the credit REPORT that tells the story. Some people I'll take a risk on and some I won't. Bottom line, 720 credit score doesn't mean you'll be a good tenant to me.

Re: Why rent to people with bad credit?