What would you do in this situation? (Renting our house)

In My Humble Opinion
1

So last summer, I took a promotion in Virginia with my company. My husband, son, and I moved here, putting our house on the market in Ohio. With the way things have been going, we were trying to rent the house out, but had let my father-in-law take the lead, so it has been a very slow process. He has encouraged us to take a renter who can not pay even close to our asking rent - several times (my father-in-law and I do NOT get along, and a lot of this is a result of our move - but we had very valid reasons for moving, and don’t regret our decision at ALL. However, his behavior has pretty much resulted in my not trusting him further than I can throw him.)

This past week, we decided to take the house off of the market and take over the search for a renter - we will try to sell again in a few years when the market has bounced back. After several months of sluggish activity from a newspaper ad, I placed an ad on Craigslist this past Thursday and have received numerous replies. We’ve been weeding out the ones who aren’t an option, and have been doing pre-screenings with them. We did have one couple who seemed like a very good possibility, but apparently, they never showed up today for their second appt (they planned to do it yesterday, but the times were mixed up). We had a woman view it this evening, and she liked it, and will be bringing her fiance back to see it next Monday. However, we are uncomfortable with them because of several items we found on the county court website (this is public record - we wouldn’t have looked otherwise). I am still corresponding with a number of people regarding the house, and am waiting responses to several emails, and may have additional showings set up soon.

So - I received an email two days ago from a couple who is very interested in renting. I emailed her the list of pre-screening questions, and she wrote back with her replies - she was immediately very up-front and honest with us about their situation. Their house was foreclosed on almost 2 years ago, and they are currently in bankruptcy proceedings. They are in their mid-forties, and have two teenaged sons, in addition to several pets. However, she was VERY straightforward with me from the start - while her husband has been at his current position for 15 years, she lost several jobs in a row (laid off at both - considering the state of our town, I believe it), and was out of work for nearly a year, and things just snowballed from there. She is now employed, and has been for a year - funny thing is, she works for my old family doctor now, so I’m very familiar with her place of employment. Their income is definitely in a comfortable range for us, and they are willing to pay an additional deposit for their pets beyond what we were going to request. I suspect they have been living with her father-in-law for the last year and a half while trying to rebuild their finances because when I asked about references from their current landlord, she said that they didn’t have any, as they’d owned their own home for over 16 years, and hadn’t rented since before that.

We originally decided that we couldn’t take the risk, and I had planned to email her today. Honestly - I have been putting off the email because I really just felt terrible about saying no - we had been going back and forth and she sounds so sincere and basically devastated about being in their situation. I was going to suck it up and send the email tonight, but we received another email from her where she said that her father-in-law knows their situation, and is willing to co-sign their lease.

So we’ve actually opened the subject for discussion again. My husband IS very uncomfortable with the idea, but is willing to talk to the couple and to the father-in-law. Perhaps it’s the bleeding heart liberal in me, but her emails have just broken my heart. They want somewhere long-term, they want to get re-established, and it just seems like they just need someone to give them a chance. In this economy, it seems like this may be a common situation right now. She has even said that she didn’t expect to be in her mid-forties and essentially starting over.

We would obviously do credit and background checks on both the couple and the father-in-law as co-signer - provided his credit report and income are good, and the foreclosure and bankruptcy information are what they described, we would be much more comfortable with the idea of having them rent the house. In addition to the pet deposit, we were originally planning to ask for first month’s rent and the same amount as a security deposit; however, we would be more comfortable with something like 1 1/2 months rent as the security deposit. We have planned a call with them for tomorrow night to talk about things, and they have been very accommodating.

So…if you were in our shoes, would you even consider renting to them? We do have others interested in viewing the house, so it isn’t like we are looking at our last shot. Aside from the financial issues, they seem to be exactly what we are looking for in renters, and really just seem to have been dealt a bad hand for a couple of years. Their history before that seems very stable - but obviously, we don’t want something to happen where we are screwed, either. My instincts say that they aren’t out to screw us, and they really are as sincere as they are coming across. My husband is less convinced, but is also willing to speak with them and find out more.

Sorry this is so long. I really didn’t mean to ramble, but we are feeling very torn on this. :frowning:

2

She/they are in their forties, were living with the FIL - who said he would co-sign a lease?

Back away slowly, you just got a cash up-front deposit from someone else who is a friend of the family - don’t forget family first. :smiley:

Seriously, I would not rent to them. Too much risk it would seem. Go with your gut and say sorry, we went with someone else. You don’t need to say anything else.

3

She’s not living with your FIL, but her’s right? I’d probably do it if they have the cash to move in (security deposit, first & last, etc.) I would put somewhere in the contract that if they are more than 30 days late you can consider that in lieu of notice to vacate and change the locks. (I’m not a lawyer, but it sounds good - no legal hassle to get them out)

People with bad credit have to live somewhere, and as long as they can afford it, it’s better than not having a tenant. It’s not charity, it’s business.

StG

4

I don’t see the huge risk, personally. It sounds like they got foreclosed on before because she got laid off - well, that could happen to anybody, and it could happen to anybody else you rent to as well. The important issues are - do they have enough money to make rent? (yes) and are they stable,honest and responsible people (again yes)

On the friend of the family issue … I know this is against received wisdom but in my family we have some long LONG histories of renting to and from family, family friends, family friends kids, all sorts of combinations - I can think of a dozen instances in the last decade or so without half trying, none of which have ended with any negative situations at all. Clear expectations, a good lease, and good will will carry you over almost any situation.

Also, they will be highly motivated to give you a good impression of them, because it’s going to matter a lot to them to either a) be able to continue to rent your house, or b) get a good rental reference off you if they move.

I would rent to them.

ETA: Re-reading the OP “my old family doctor” isn’t exactly an enormously close “family friend” connection anyway, so I’d say who cares!

5

Actually, my gut said to give them a chance when I first received the email - my husband wasn’t fond of the idea :). She did say that her father-in-law would co-sign, so he hasn’t said it directly to us, but we would definitely be having him fill out the application as well, do the credit check, and the background check. Once we spoke with them, we would want to call him to ask him ourselves (and my in-laws, as much as I loathe letting them do anything, would meet with him to verify all information.

Honestly, the fact that she’s given me so much information that would be very difficult to fake (the town is tiny - and we all know even the small businesses, and the history behind them) has made us want to reconsider them and at least explore the option. If she hadn’t been so open and honest from the beginning, we would still say no. And we would not commit to anything until we’d looked at everything.

I’m trying to separate my emotions from my common sense, and look at this from a purely business aspect, but it’s a lot more difficult than I thought.

6

Aspidistra, you make a good point - they will want to make a good impression for future landlords. We want someone who will take care of our house, and who WILL make it home.

We’ll see how we feel after talking to them tomorrow night - that will definitely help us get a better feel for them.

7

Huh?

What’s your risk really? Put them on a short renewable lease and enjoy. You are going to need a short term lease anyway if you want to sell the house eventually free and clear.

If your town is depressed, then who do you think your renters are going to be other than folks like that? Someone who just got a promotion while everyone else was getting laid off and now wants to move up to a place like yours?

8

Well, that’s my point to my husband. Not sure what’s difficult to understand. The town is depressed, and on paper, they may have a crappy history for a couple of years, but overall, they seem very stable, and want to build their credit back up. In this economy, it really is a situation that could happen to a lot of people so if they’re sincere, it’s worth giving them that chance. And if they want to stay there for a couple of years, or longer, even better.

As I said earlier, we do have a few other potential renters who have been very nice, and no one’s credit is spotless (we have one couple who will be back to look at the house in a week, and their credit isn’t perfect, either), so our main concern is having renters who will keep the house in good condition and pay their rent on time so that eventually, we can sell it. I know my husband is concerned, but they sound like a nice family who has to start over.

9

Two teenage sons and pets? Make sure there’s a monthly property inspection clause in the contract.

That being said, I’d go with them long before I would someone with “several items we found on the county court website”.

If the only significant strikes are the foreclosure and bankruptcy several years ago and nothing since, I’d consider renting to them in your place.

But this is your property we’re talking about so don’t do anything you’re not comfortable with.

Let us know what you decide.

10

I guess the questions you need to ask yourself about any renter are:

  1. Can they pay their rent on time?
  2. Will they treat the property with respect?
  3. Are they better than other candidates available, or, barring that, are they better than having nobody at all in the house?

To me, it seems the answer to these three are “yes.” But that’s up to you to decide.

11

If your father-in-law is out of the picture then who will take care of little repairs and maintenance? Are you going to get a management company or do you expect the tenant to deal with all that while you are in another state? If the latter, then why would someone with good credit and good income want to put up with the hassle? In a slow market they can have their pick of rentals. And if they are choosing to rent rather than buy then I presume there’s a reason why, either they won’t be in the area long (and don’t need your reference) or they’re just not homeowner-types ('nuf said).

I have never been a landlord and you don’t have to answer my questions, this is just what jumps out at me as someone who rented for 10 years with both good credit and good income. It sounds like your husband wants to hold out for (a) good credit (b) good income and © wants to take care of someone else’s house. I wish you luck but I have to wonder if you’ll find 3/3 in a slow market. (if you prove me wrong them please let us know!)

12

Granted, California most certainly may be different, but we just had to put one of our rentals up for new tenants. We put a cheap ad in the paper (2 lines) and I stuck one on Craigslist.

No joke: we’ve gotten 35-40 calls a day for the last 5 days. We had our pick of the folks and went with a young professional family with two kids, who were more than happy to pay the first month and deposit same day. Perfect credit. Secure jobs. No pets.

This isn’t some fancy pants house- it’s old and definitely needs work. Not in a bad neighborhood or anything, just nothing fancy. Not huge, either: 1000 square feet (3 small bed rooms, 1.25 baths), but a decent yard.

Keep looking. You’ll be fine. I think your father in law was just dropping the ball.

13

Let 'em have it. They sound so cute.

14

Actually, we have a good friend in the area who is willing to be on-call as a point-of-contact for repairs and any other issues. We’re going to pay him on per visit basis. And for repairs that are beyond his scope, we will hire someone. So that’s covered. If we try it for a month or two, and it’s not working out - we’ll bite the bullet and hire a property management company instead.

And I agree with you about my husband - that’s actually his approach to a lot of things, and believe me, it gets frustrating. My primary concern is exactly what Enderw24 has stated, and anything else is icing. I think he’s beginning to realize that spotless credit in this economy is not going to be the big difference in the long run when it comes to renting the house out. Hopefully, talking to the couple tonight will help. Luckily, we are getting a lot of responses just from one posting on Craiglist (I will probably repost after a week), and it seems like 1 out of 3 has potential. The rental market in the area isn’t necessarily slow - there are a lot of homes for sale or rent-to-own, but I’ve been watching the paper and Craigslist, and rentals seem to be moving along. I think we’ll be okay, and even if we’re not in the area, we obviously want to maintain a positive relationship with whoever rents our house (we love that house - it’s where our son was born), and we want to be good landlords who respect our tenants - same as we want our landlord to treat us (we’ll be looking for a rental house here until we decide to buy again).

Diosa, good to know! I think my FIL was dropping the ball, too, but I will admit, I am very, very biased when it comes to him, mainly because he has tried to control many aspects of our life. Now that we’re taking control of screening applicants and using a different method to try and rent the house, it’s good to know that things aren’t as hopeless as they seemed. Glad you got your house rented! Craigslist has been fantastic. I know so many people who have either found their house there or rented their house using it - and for the most part, they have all had good luck.

Definitely. I appreciate all of the advice in the thread. We’re new at this, so I knew I could get some good advice on the Dope :smiley: .

15

Now you have me saying give it to them. :slight_smile: I was skeptical before but these folks seem like the economy has them by the straps. I’d rent to them.

16

I used to be on the board of a credit union, and this sort of situation used to come up with loan approvals.

There are more or less two sorts of people with bad credit. There are people who have always been irresponsible with a long history of delinquencies regardless of income, and there are people who are very responsible, have a Bad Thing happen that dumps them in the crapper for a couple years, after which they are very responsible again.

You do not want to rent to the first group. The second group, however, may be very good tenants at this point in time. We used to give loans to group number 2 and their default rate was no worse than people with perfect credit histories.

If a person had a good record prior to the Bad Thing (foreclosure, bankruptcy, lay-off, illness, accident, whatever) and a good record since, and they have the resources to pay the bills right now, then I don’t see such a person as a bad risk. They are a person something bad happened to, not a bad person. Once the Bad Thing is over they’ll go back to being responsible and paying their bills on time.

Now that I’ve said all that, it’s YOUR decision what to do.

17

Philosphr, we’ve been skeptical, but I am shocked at my husband’s reaction after talking to them on the phone tonight - he REALLY likes them. And Broomstick, it really does seem like they fall into the second group - they owned their home for 17 years before this, and with my husband being unemployed for 9 months in the same area 3 years ago, it can happen.

We talked to them about an hour ago, and the details did NOT change. She just emailed me their companies, contacts for HR, and phone numbers so that we can do an employment verification tomorrow, as well as the contact info for her FIL so that we can verify that he is willing to co-sign. And I just did some research on him, and I’ve heard of his company (in fact, they were right down the road from my old office). He was the owner, and has retired, but must still have a stake in it, since he still goes in every day. We are both feeling very positive about this now. (And honestly, we’re so used to things going wrong for us that it feels weird to have something possibly going right.)

And here’s the part where I get to laugh at how small our town is :). Aside from the previous mentioned connections, she asked for the address tonight (which I thought I had already given her). When I said it, she said “Really? Did you guys just have it on the market?”. When we said yes, she said “Okay, this must be karma or something. When the house was sold about 20 years ago, my mother was the real estate agent on it, and we went through it at one of the open houses. I told her that it was the house I would love to have, but it wasn’t in our range then.” The house WAS sold in 1989, from the second owners who had been there for about 40 years. So she has already been through the house 20 years ago, and there have been some upgrades done, but she already knows what it looks like inside :).

I am feeling very good about this. It scared the hell out of us in the beginning, but I think they are just good people who have had a run of bad luck, and it has the potential to be something very good.

18

Can I suggest letting them rent it with the option to buy it in X years. You would put aside a certain amount of the rent as a down payment on the house at fair market value. If they decline to buy the house then that money that was set aside is forfeited to you.

19

When I rented a house out ,i asked for the last 2 places they lived. If they are bad the guy renting to them now will say anything to get rid of them. The guy who rented before that is likely to give you the truth.

20

Actually, I have a feeling that may be an option in several years. It’s definitely a thought, and something we’d have to explore further. It’s not something we want to push right now, but if they bring it up, we’d be happy to look into it with them. I think they want to take a few years and rebuild their credit first, though.