The rental market in the Phoenix area is out of control lately. Our inventory which is normally in the 8500 range is currently under 3200 and decreasing rapidly. Because we took such a hard hit with foreclosures and are still very high in short sales, all of the owners of those homes still need to find a place to live but can no longer qualify to purchase a home. Thus, we have a high demand for rentals.
This is great news for Landlords, but they have a tough decision to make. When you look at a credit report what parts are most important? It is really tough. Most of the applicants' credit scores are very low due to the short sale or foreclosure. So, I tell my landlords, those don't really mean that much in this market. But what they should look at is their employment history, security in that job, debt to income ratio if available and late payments on other accounts. I am looking for someone that is going to be in their job for the long term and can make their rent payment monthly if they end up losing that job. So, money in the bank and low monthly bills. Also, calling past landlords or driving by the house they foreclosed on may help tell you how they took care of the house. I really want someone who is going to respect the house.
Some landlords may or may not care about certain things, so it is always important to ask what they are looking for most in a tenant then try to find one that fits that criteria. And as we are finding out, credit doesn't mean everything.