How Do We Qualify Tenants?
Our process is based on three basic criteria.
“Show Me The Money!!”
The tenant must have a NET income of three times the rent or more from stable sources. For perspective, the federal housing guideline for a loan to buy is that the payment would be no more than three times the GROSS income. The federal government is 22 trillion in debt. “Don’t take financial advice from broke people” – Dave Ramsey. This is play out of the Dave Ramsey theory which suggests that you shouldn’t have a payment more than 25% of your NET income. Dave is little more conservative and some say crazy…he doesn’t mind though…he is loaded.
Credit Check? Check!
If there is evidence on the credit report of financial irresponsibility in the last three years we will deny the application regardless of the amount of income the applicant makes. Sometimes folks don’t have a money problem, they have a spending problem and that can be a problem for us. (Late car payments, collections from jewelers, phones and utilities sent to collections or charged off)
Rental History Verification
If the last couple of places the prospect has lived report proper payments, no rule violations, compliance with the lease, and a few other details….That’s a good thing.
This process has worked for us so many times. In fact we have only had 3 evictions in over 9 years of business in over 780+ transactions.