During these unsettled times with covid making the rounds and social issues taking center stage, the criteria and standards we landlords use to qualify our tenants may change. These changes may be dictated by the local government as in St. Paul, or we as individual business owners may determine change is needed due to shifting market and social conditions.
When rents are climbing and the market is tight, we landlords can almost pick and choose who we want to live in our properties. As the market loosens, and I think it very well might do so in the near future, we have to become more flexible. We are also not immune to social pressures. Housing is in fact a growing concern for many across the country and legislation forcing changes to our business models is a distinct possibility right now.
Even with all of these changes that are and could possibly occur, we still want to find tenants who will pay, stay and respect our properties. These three criteria are what we should always be aiming for. There are many ways to achieve this goal and what works in one area or market may not necessarily be what works in another.
Of course, every landlord has to begin their rental standards with the federal fair housing laws. These laws protect certain classes from housing discrimination. These classes are race, religion, color, national origin, familial status, age and gender. Disability, military/veteran status and sexual orientation are others that often (and should) make the list. From there however things change with location and market.
For example, in our business we rely heavily on credit history. We operate in a market where using that criteria works well. There are markets however where that criteria will not. There are markets where most applicants will have poor credit histories. Thus, other criteria should and can be utilized. What sorts of criteria could you use instead? Perhaps job and residential stability. Seek stability in terms of employment and living arrangements. Examine if your applicant changes jobs and addresses frequently. If so, than they may not be right for you even with the best of credit reports.
Evictions are another criteria that are often used and which is currently under attack for being used in many jurisdictions. But in some markets many of the applicants will have evictions on their records. It just comes with the territory. Should you ban people with any eviction in their past? Maybe. But perhaps a better strategy is to set a time limit and look for positive change in the applicant. When was their last eviction? Last week? Last year? Ten years ago? When can make a difference.
Whatever criteria or rental standards you use and however you decide to change them due to changing market and political conditions make sure you follow the law and make sure you WRITE THEM DOWN. Keep a list of your criteria and standards on a sheet of paper in your desk so you can do to things.
1. Follow them with every applicant.
2.Show them to anyone who asks.
Trust me, doing so will save you much future grief.
Are your rental standards changing these days? Please share with a comment.
Kevin Perk is the founder and publisher of Smarterlandlording.com. He is the author of Advice From Experience To New Real Estate Investors. Subscribe to Smarterlandlording here. Contact Kevin here.
