Finding lease option tenants
When it comes to finding lease option tenants you need to decide what are reasonable and what are unreasonable expectations.
For example, many of my tenants have pets, and most of them smoke. For this reason I never say, "No smoking" and "No pets" because I wouldn't have many tenants. Smoking and pets don't make people bad prospective rent to own tenants. However, here are some things to look for on their application that are potential smoking guns for bad tenants:
- Why did they move? When prospective lease option buyers say they had a "bad landlord" before, it puts up a red flag for me. I know there are bad landlords out there, but the red flag it raises is that they are blaming someone else for their problems. So I look further to see if there are other instances of blaming. If their business went into foreclosure are they blaming their accountant? If they have tax liens are they blaming the IRS? Be especially watchful for the blame game.
- How long have they had their current job, and how long did they have their previous jobs? What salary are they currently making? If they haven't been employed very long in their current situation, call their current employer to get an employment verification. Do not get the verification from the receptionist!
There are a lot of rent to own buyers out there right now who have gone through recent foreclosure. This does not automatically exclude them in my book. You need to determine if they are in the process of turning their life back around or if they are still in a downward spiral. Rent to own tenants who have gone through foreclosure can be great buyers because they still have a homeowner mentality instead of just a tenant mentality. BUT - you need to make sure they'll be able to get a mortgage when the time comes.
Tags: Lease Option, Lease Option training, Lease Options, Rent-To-Own, Rent-to-Own training, Wendy Patton