By Gabriel Knight, Mortgage Fit, Chicago, IL
It’s no secret that the still-sputtering economy has made it a rough go for property managers. After all, one of their primary responsibilities is making sure that rental properties are rented, and with still so many unemployed and underemployed folks out there, renting has become a real problem – the pool of eligible renters is shrinking.
But while things are tough for the property managers out there, it pales in comparison to the hardships that potential renters are facing. Keep in mind that many prospective tenants were homeowners before the recession came along and forced them into short sales, default, and foreclosure. These people have little rental experience or history, if any, so property managers have to question whether or not they’ll be able to pay their rent. Ironic, given that these people once managed to pay a mortgage every month.
Many of these potential renters are dealing with bad credit because of tough decisions they were forced to make regarding their homes. Often they are considered higher risks, so they face tougher standards, higher deposits, or rejected applications.
While there isn’t much property managers can do beyond waiting for the economy to stabilize, there are things potential tenants can do to better their chances of approval. For one, having pay stubs from a current job can show that your employment is ongoing and steady. And a reference from a former landlord, if you have one, helps as well. You can also run a free credit check on yourself through various online services so that you have an idea of what the landlord is going to see when they pull your report, and you can explain any extenuating circumstances that drove your FICO score down.
Of course, the best policy is to have first and last month’s rent and a security deposit ready for the property manager. That probably goes without saying, but ultimately that’s what the property manager is going to look for if they give you a shot. Potential tenants can also check with their local government’s Housing and Urban Development (HUD) department for expert advice.
Renting these days is hard, but not impossible. Preparation is key!
- How Does a Lender Evaluate Your Borrowing Ability
- Your Credit Report is an Important Asset
- Are You Wasting Money Renting
Gabriel Knight has vast experience in the mortgage industry, and has been associated with the MortgageFit Community as a mentor. Not only does he provide suggestions in the community forums, but he also contributes various articles on mortgage, property, and finance. He is a guest contributor to the industry blog All Things Property Management by Buildium, a property management software company. For more information, visit http://www.mortgagefit.com.
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.