Real Estate Rookie 184: Rookie Reply: Should You Rent to a Bankrupt Tenant?
This week’s question comes from Andrew on the Real Estate Rookie Facebook Group. Andrew is asking: How would you handle a prospective tenant that has a bankruptcy on their record?
Tenant screening is almost as important as rental property screening. A bad tenant can not only cost you potential rent but cause thousands or tens of thousands in damages if not handled correctly. This is why landlords are so strict when evaluating tenants, as a good tenant can mean next-to-nothing maintenance and a bad tenant can mean habitual headaches. It’s up to you whether or not a potential tenant meets your criteria. When evaluating, remember to stay within your legal limits!
Got a tenant with some questionable financial history? Here’s how to proceed:
Speak with the applicant and get their side of the story while trusting your gut
Verify the applicant is truthful by running a credit check and background check
Use a property management software that allows you to report a tenant’s monthly payments to credit bureaus
Look at the applicant’s job history, debt-to-income ratio, and if they have any repossessions
Know that people who have filed bankruptcy may only have the option to rent (for a while)
And more in the episode…
If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE).
Links from the Show
Real Estate Rookie Youtube Channel
Real Estate Rookie Facebook Group
Check the full show notes here: https://www.biggerpockets.com/blog/rookie-184
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