As s landlord, I am often asked the question...should I rent to tenants with a foreclosure or a bankruptcy?

And often times people are shocked at my response...

Every tenant should be looked at on an individual basis. What is the reason for the bankruptcy or the foreclosure? Did they get caught up in the sub prime mortgage mess and their taxes, insurance and interest rate adjusted up? I know many people that were comfortable and able to pay their mortgage payments until their payments went through the ceiling.

I am a landlord and have been since 1996. I have no problem with renting to tenants that have credit blemishes. The right ones make good long term tenants. What was their previous payment history on their last rental? How long have they been at their job? I know many good hard working people that go to work everyday, but they just don't earn enough money to cover all of their expenses, every month. Or some people just have poor spending habits. Often times they are unable to make their credit card payments. I am indifferent to that. The good ones understand they must pay their rent every month to keep a roof over their heads. Many of them make great long term tenants. I have had tenants with me for over 10 years that pay their rent every month, that came to me with credit problems and they still have credit blemishes.

I will not consider an applicant that has been evicted or has a repossession. Once evicted, often times it's habitual.

In the last 4 months, I have rented to 3 people that are going into foreclosure due to interest rate adjustments.

But be aware, renting your primary residence is different than placing a tenant in a house that you have never lived in and have specifically purchased to use as a rental. I have never gotten a house back from a tenant in better condition than I gave it to them in. And in 2001  when I bought another primary residence, I chose to put my previous house on the market, rather than turn it into a rental.

Do your homework and be very careful. If you pick the wrong tenant, you will be faced with filing an eviction.