5 Questions Property Managers Should Ask Tenants With Bad Credit

Posted on: 7 November 2016

Many property management companies have specific criteria that potential tenants must meet when they want to rent an apartment or house. Oftentimes people with bad credit are automatically denied the opportunities that people with good credit have. The problem with this is that both the landlord and the aspiring tenant may miss out on a great situation because of the unfortunate credit history. Instead, if you're a property manager, you may want to ask these five questions to learn more about why the person has bad credit.

Question #1: Are you willing to provide a higher initial deposit?

Tenants with bad credit may be willing to provide a higher initial deposit on the home they want to rent. That can alleviate some of the worry on your part. You may have a lease agreement where the higher deposit automatically goes to the property owner if the tenant falls behind in rent. If a tenant has a higher deposit, the owner would still be financially protected while initiating eviction proceedings if necessary.

Question #2: What are the main causes of your bad credit?

Sometimes people who are financially responsible encounter a major tragedy that destroys their financial health. Whether it's suddenly losing a job, a health crisis, or some other major problem, there is often not much standing in between the average person and bad credit. When you ask someone to explain their credit, you may be surprised at the answers.

Question #3: How long have you been employed?

How long someone has been employed can reveal a lot about how reliable they are. Someone who is steadily employed is likely going to be able to pay rent each month. Even if they may have made bad decisions about taking on too much debt in the past, someone who has been employed for 20 years may be an excellent tenant.

Question #4: Can you verify your employment?

If someone has been employed for a long time, it's important to verify that employment. This may be something as simple as calling a business phone. If you do not trust that call, though, you may want to talk to the tenant about other ways to verify the employment, such as a letter on company stationery.

Question #5: Why do you think you would make a great tenant?

Listening to the answer to this question can let you in on how this tenant thinks about their responsibilities as a tenant. The tenant may volunteer references from past landlords and speak about how they have been an asset to land owners in the past. Pay attention and feel free to ask follow-up questions.

Finally, keep in mind that you can ask any or all of these questions without letting the tenant know that they are being considered for the home or apartment. After asking the potential tenant these questions, you may want to invite them to ask you questions because you can also learn a lot about someone by the things that they want to know about the home. Ultimately, it's important to trust your judgment when it comes to choosing tenants. For more information, contact a business such as Vintage Corporation.