Landlords: Advice Would Be Appreciated

[Hunter's Moon]

My husband and I are looking to move within the next few months, but we're new to the renting scene.

 

We're both in our young 20s, and our only rental experience is renting from family.

 

I would appreciate some advice on our specific situation and how we can prove ourselves to landlords.

 

1. I and my husband are self-employed -- our monthly income isn't consistent, but it stays above $1200/month. So, one month we may make $2000 while another we may make $1400. Our previous year's tax return is not indicative of our current income, and while we did make enough last year to pay our current rent ($440) and other such expenses, I know it will not meet most monthly income requirements. I do have bank statements to prove our current income and it goes all the way back to the beginning of the year.

 

2. We will have a roommate -- a close friend of my and my husband's is looking to move from his parent's house, and he makes a bit more than we do per month when our monthly earnings are on the higher end ($2000). He has no rental history, however, but he's been working his job for the past 1.5 years.

 

3. My husband and I have a savings account with a few months' worth of rent in it -- we're looking to rent a 2-bedroom place between $600 - $1,000, which is completely doable in our LCOL area. Our savings account has enough for 3 - 4 months of rent should anything happen to my work or our roommate's job. I believe the roommate has savings as well, but I have to double check.

 

4. I am willing to offer an extra month's rent as security in addition to the usual first and security deposit -- I know self-employed tenants can be a bit of a gamble, so I'm willing to work with the landlords to make them more comfortable.

 

5. None of us have a criminal record, and our average credit score is about 650.

 

My big question is, will all three of our incomes be combined since we'll all be on the lease, or will the landlord look to each of us to meet the minimum income requirement (about 3x rent per month)? Would you rent to tenants in our particular situation, or is the lack of rental history a red flag? Of course, my sister and BIL are willing to provide us with a reference, and while they share a different last name, I'd feel bad lying to the landlord and not mentioned my relation to them.

 

If any other information is required, I'd be happy to supply it.

 

[slackermom]

At your age, I would not be too concerned about a rental history, but you might be asked to have someone co-sign for your obligation on the lease, such as your sister.

 

I would assume they might do a credit check on you, your dh, and the roommate.

 

In my area, first and last month's rent is standard, along with a security deposit. There are probably local rules that govern what can be collected, and how it must be held.

 

eta

 

I would combine your incomes, and not expect each to be able to individually pay the full amount. 

 

 

Edited September 2, 2016 by slackermom

[Hunter's Moon]

At your age, I would not be too concerned about a rental history, but you might be asked to have someone co-sign for your obligation on the lease, such as your sister.

 

I would assume they might do a credit check on you, your dh, and the roommate.

 

In my area, first and last month's rent is standard, along with a security deposit. There are probably local rules that govern what can be collected, and how it must be held.

 

eta

 

I would combine your incomes, and not expect each to be able to individually pay the full amount. 

 

I do not have anyone who would be willing to co-sign for me. Perhaps my husband or roommate do, but my family wouldn't.

 

I've been looking around online, and it seems landlords are split on the combined income vs individual income requirements issue. I can completely see why a LL would feel more secure if each individual tenant made 2.5 - 3x the rent, but most people wouldn't be rooming together if they could do so individually.

 

I appreciate your reply!

[TranquilMind]

Leases always hold tenants joint and severally liable, meaning each or any tenant can be held responsible for the full amount of the rent, should someone not pay. You don't each have to meet it, but someone has to pay in full every month on or before the due date. Landlord does not care who that is, but there is none of this "Here is my 1/3 of the rent" stuff.

 

Here is how you will be evaluated:

 

Negatives are:

 

No rental history (family does not count, and if you fail to mention relationship, that will be an auto-reject. There are sites to check this stuff. Tell the potential landlord. Honesty is crucial. Personally, I will reject for the smallest falsehood, though some are more forgiving. )

 

Low credit score (why is relevant-are there unpaid bills, charge offs, unpaid utilities = bad. Medical expenses are not so bad).

 

Verifiable income? Income should be a minimum of 3x monthly rent.

 

Positives: money in the bank. Yes, an offer of extra security deposit will help.

 

For me, no pets and no smokers would be a plus too.

[idnib]

I would be willing to rent to people in this situation, although I would want to know the reason the credit scores are 650. Lack of credit? New to credit? Too much debt? Missed payments? That would make a difference to me. Which is not to say 650 is bad, but I'd want the details.

 

A lot of it will have to do with the market in your area. If a landlord wants to get a property filled and the market for tenants is slow, I think you could be fine. If there's a lot of competition for places, you might lost out to someone with more consistent income, rental history, and references.

 

Any lying about being related to the references would be a huge red flag. Just tell the truth, definitely.

Edited September 2, 2016 by idnib

[creekland]

My largest concern would be knowing if there have been late payments (for anything) in the past.  People who pay late think nothing of it and are a much higher risk than those who do everything possible to see that their bills are paid on time.

 

I'd also want to know that each party "could" pay the rent on their own at least for a month or two.  One never knows when a friendship will go awry and someone steams out.

 

Beyond that, we're pretty lenient and like helping folks out.  We understand that folks need to start out in life.  One extra month security deposit would probably seal the deal, but not if payments (for anything) have been late regularly before.  Once might be forgivable.

[vonfirmath]

We have managed to rent before with NO current income.  (We had just moved and did not have a job in the new place yet).  It was a larger apartment complex and they were willing to accept proof of money in the bank in lieu of current income.  We did, however, have a rental history and slightly better credit (700)

[blackjackoaktree]

I think you should be okay. We've rented for over 20 years all over the place and have found something under similar parameters.

 

I will say there would be very few people in our area that would make 3x the amount of rent though. The jobs available don't even support that compared to what the going rate for a two bedroom is around here. Most renters are paying over half their income in rent and there are tons of applicants. We were one of something like 45 it it was def. not our income or credit score that helped, it was my husband's job as something traditionally low paying but generally well respected and long term.

[barnwife]

 it it was def. not our income or credit score that helped, it was my husband's job as something traditionally low paying but generally well respected and long term.

 

That counts a lot.  Somebody who has a job and keeps a job even when it's rough, is a much better risk than somebody who just got the job that they love, and pays more.  The landlord doesn't care as much what you get paid, as what they'll get paid. 

 

Low credit score because of short history is irrelevant here, you've already made it perfectly clear you have no history.  I'm not saying 650 is low, I have never done credit checks on renters, figuring most won't have good enough credit for it to be a valid measure.  But I should probably rethink that, especially in cases where somebody doesn't have the traditional landlord and employer references.  

 

Family can count somewhat as a rental reference IF you can show checks for that time that the rent has been paid.  Being married is a good sign of stability if it's been even only a few years at your age. Showing that you've been in the same address, paying the same bills for however long it's been, will help even if the landlord doesn't trust the family reference.   Depending on a NEW roommate is a negative, no history together.

 

 

My experience this last month, it's a renter's market, like it hasn't been in the last ten years. I've rented decent places, even very attractive places, to people I wouldn't have considered last year, and that was the best of many applicants.  As long as you have your head on straight and explain your situation reasonably, I don't think you'll have a problem.  DON'T show up with an expensive, destructive/high energy dog.  Don't ask the landlord to work with you on the security deposit.  

[Hunter's Moon]

I really appreciate the responses!

 

I think my husband and I have officially decided to wait 9 - 12 more months and build up our credit as we wait.

 

We do have credit history, but it's not in the best shape. We have no late payments on credit cards or our cell phone bill, but he has a few collections that we need to handle from when he was newly-18. We also want to get our credit utilization under 30% and work on increasing our monthly income as well.

[Hunter's Moon]

Oh, and a quick question - we pay our rent in cash each month. Even though it's family, would it look a bit better to have a paper trail (check or money order) to prove we pay monthly? Or maybe a direct deposit into their bank account each month straight from ours?

[idnib]

Low credit score because of short history is irrelevant here, you've already made it perfectly clear you have no history.  I'm not saying 650 is low, I have never done credit checks on renters, figuring most won't have good enough credit for it to be a valid measure.  But I should probably rethink that, especially in cases where somebody doesn't have the traditional landlord and employer references.  

 

I agree with re-thinking that. You can also see if they have any civil judgements against them for damages to previous properties.

 

 

Oh, and a quick question - we pay our rent in cash each month. Even though it's family, would it look a bit better to have a paper trail (check or money order) to prove we pay monthly? Or maybe a direct deposit into their bank account each month straight from ours?

 

 

Yes, it would be better to have a paper trail.

[TranquilMind]

Oh, and a quick question - we pay our rent in cash each month. Even though it's family, would it look a bit better to have a paper trail (check or money order) to prove we pay monthly? Or maybe a direct deposit into their bank account each month straight from ours?

 

Yes, you absolutely want a paper trail. 

 

[ktgrok]

checks would be a lot easier to track and prove compared to direct deposit. Put "rent" in the memo line as well. 

[Alicia64]

Print this info. out and tape it where you'll read it often. Thread-stealing for just a second: when you do sign a lease, read the lease carefully, keep it somewhere safe -- and take tons of pictures of the house/apartment before you move in.

 

See gutters crammed with leaves? Take a photo. Flower beds in front yard? Photo. Every bedroom, fireplace, floor, tub, sink, fridge, back deck, fence, everything. . .  take a photo. If you haven't taken 25 to 50 photos, you're not finished taking photos.

 

Not all, but plenty of landlords make extra money by not giving deposits back at the end. They claim this, that and the other. Photos protect you.

 

Alley

[idnib]

To tag onto Alley's post, more general advice: Get renters insurance! It's very important not just for protecting your belongings, which btw are not covered by the landlord's insurance. It can also cover you to stay elsewhere if the property is damaged and very importantly, can give you liability coverage. It's quite reasonably priced and very worth it. If you have auto insurance, check with your agent. Sometimes rates are lower if you have multiple policies with the same place.