I have sold investment property for 26 years, I own a property management company, and my wife and I have owned investment real estate for many years. If you do this kind of real estate long enough you learn as you go and one thing I know is an 800 credit score is outstanding but does not make for the best tenant but not for the reasons you think. They will probably take outstanding care of your property but they will rarely go past a one year rental because an 800 credit score person is a homeowner first and foremost, and one thing I have learned is that increased vacancy will make your paper return go away. In fact, I have a couple out of San Francisco who won't rent to someone under 800 and the lady will reject a 790. That is their choice and we honor it in spite of our reasons to the contrary, that is our job.
I want to talk about three of our personal rental inventory tenants and why they were chosen and the advantages they have. First, I have one couple going into their 10th year who left their jobs and started a retail establishment and it failed pretty quickly. Up until then they were perfect but soured on the home owning process after a short sale I negotiated for them. They even take care of many of the repairs. I will lose them at the end of the year because of a house they will inherit but no vacancy for ten years? Count me in.
Another couple is starting their third year and their top credit score was 540. That sounds terrible doesn't it? That is what happens when you pay cash for everything, you have no credit. They also were in their previous place for 16 years but it was an apartment and they wanted more light for her painting. Now he has resumed painting and they send us their work by email and it is wonderful. We also drive buy and they have the garden looking better than ever. I hope they never leave.
My last example is an older couple who wanted to come back to Oklahoma City for his job he got and they are native Oklahomans. it was a 1400SF 3/2/2 my wife and I totally remodeled. Every month he had delivers a check to our mailbox and never misses. I have no idea about their credit score but there are times when you can recognize character when you see it and you also see the devotion and love between the two of them and they are starting their third year.
Life isn't perfect and decisions may not be always correct but setting standards for your tenants is as much art as it is science. Yes, a gut instinct is great but of course you still back that up with a background check. Give me these people over that 800 credit score almost anytime and I will show you a return on investment that matches the estimate you get on paper.
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