Here at Empire, we have coined quite a few sayings/mottos over the years. There is the famous “All Roads Lead To Empire’ and of course, “We take the stress out of being a Landlord.” The more humorous ones, such as “Join Us, and We will bring balance to your Empire,” first sprung on a local marketing group by our Leasing Manager, Therese Waggoner as part of her marketing moment. As planned, it left the room in stitches. And of course, “It is better for your rental to be vacant, then for you to wish it was.”
Being a Landlord can be stressful even with the best of tenants installed in the home. Emergencies, water leaks, maintenance on the home, finding contractors to complete the maintenance, and the list continues on from there. That is with a perfect tenant. When you rent your home to a tenant who is merely good, or below that, being a landlord takes an interesting turn. And sometimes, that turn leads downhill.
A Rental Property is an Investment
We recognize this at Empire and understand that our owners are not the “upper-class oppressors” as they are commonly perceived by many, but are part of the working middle-class. Through years of hard labor, they have saved enough to buy their rental home. This investment, for many, is meant to support them in their retirement. They do not want to put that investment in danger by renting to anyone who is anything less than a perfect tenant.
What is a perfect tenant? In reality, the perfect tenant does not exist. At least insomuch as to make the tenancy without risk. To be a landlord is to take a risk. You never are completely sure of the outcome.
That being said, there are steps that can be taken to assuage some of that risk. First and foremost, screen your tenants properly. Empire was founded on the belief that a tenancy is built like a three-legged stool. Those legs are as follows: Rental History, Income, and Credit.
Being a good landlord is knowing when to take a risk, as every tenant, no matter how promising they may appear, is a risk.
The foundation on which all tenancies are built; Empire requires a minimum of three years of verifiable rental history. Weakness in this leg can be compensated for by increased deposit in a few cases, but if the leg is weak because of bad rental history, there is no cure.
Empire requires that the tenant make three times the rent amount, but weakness in this field can sometimes be rectified. An applicant that has stunning rental history but is slightly below the bar in income may be asked to pay an increased security deposit.
We allow a minimum credit score of 650. Anything below that is ground for denial. On occasion, we will raise the deposit to compensate for challenged credit. But once again, only for those with near perfect rental history.
The security deposit is never enough to be the foundation that the tenancy is built on, but sometimes it can be enough to save it. Being a Landlord is about knowing when to take a risk. The security deposit is there to alleviate some of that risk.
Empire charges a base deposit of 200 over the rent amount. The normal tenant that meets our standards will be required to pay that amount before the signing. Those who are a little light on income may be able to get a home with a slight increase in their deposit. Applicants with great rental history and no credit could be approvable with an increased security deposit.
When screening an applicant, always ask yourself “Do I want this person in my home for the next few years? How much risk is there?” Your answer determines if you will approve them, deny them, or approve them on condition that they pay a higher deposit.
How much do I raise the Security Deposit?
The hardest question to answer. How much risk is it? What will it take to alleviate it enough to make it possible? There is no one that can answer it without first knowing:
- The Property
- The Owner
- The Applicants
In the end, only you, the Owner, or a Property Manager can answer the question. It varies by home, by the applicant, and also by the market. In a hot rental market, you may not need to make exceptions to the rules. If things are running pretty slow and you’re not receiving much interest, it might be a good idea to take a second look at an application that wasn’t quite perfect but may be redeemable by an increased Security Deposit.
But always remember: It is better for your rental to be vacant, then for you to wish it was.
If you wish to work with a Property Manager who knows how to properly handle the risks, Join Us, and together We shall bring peace and order to your Empire.