Who would you rent to?

[BDFI]

Hello,

I have a couple of party`s interested in renting a main floor of a 1/2 duplex from me and would like opinions on who you would rent to. The property is located in Cochrane, AB, is approx. 1100 sq`, legal accesory suite is located below (with long term tennant) and I pay utilities (I know I will take some hits for that!).

Applicant #1 - is a young couple that is expecting their first child in October. They have indicated that they would like to rent long term (>1 year) and would be paying $1375/month. I have not run credit checks on them yet but one of them let me know that he went through a bankrupcy approx. 2 years ago.

Applicant #2 - is a 60 year old single male. He is a friend of the basement tenant, I have met him before, he has excellent refrences and appears to be a quality tenant. He has also indicated that he would like to rent long term but only would like to pay $1250/month.

Each applicant has their pros and cons - who would you rent to???

Thanks,
Bart

 

[Nir]

I would rent to the 60 yrs old no doubt. $125 gap is less than the expected cost renting to the couple + ..

 

[realfortin]

QUOTE (investmart @ Mar 7 2009, 07:52 PM) I would rent to the 60 yrs old no doubt. $125 gap is less than the expected cost renting the couple + ..
I agree. The couple with incoming babies will use up more power, water, sewage, add more wear and tear and just generally cost you more. The older gentleman is more likely to fix things on his own and have less demands on you. The oder gentleman knows he can pay the rent but the young couple will have many more extra expense surprises.

2cents

 

[lanedry77]

I agree - the 60 year old is a clear winner in my mind.

One of the biggest problems with suites is personality issues between the tenants. If the 60 year old is already friends with the basement tenant - and good enough friend that they`re willing to live in the same property - you are very unlikely to have issues with them.

Add to that the fact that you pay for utilities (I`ll go easy on that one

) - the 60 year old will use way less water, electricity, and gas (older folks like it colder, younger folks like it warmer) as the young couple, as Real pointed out.

Also, the young couple may say they want to stay for a long time, but maybe that`s just their sales pitch to you. on the other hand, if the 60 year old is renting now, what are the changes he`s going to be buying anytime soon, and at 60 years old he probably realizes that `bailing` on a landlord isn`t worth it. (just as his references have attested to).

And if you like your current basement tenant, think about how he`ll like a crying baby upstairs.

And finally, think about the neighbors. Two 60-ish guys, or one older guy plus a young couple with child. who would you rather live beside, or better yet, who would you like representing your property.

there`s no contest in my mind.

Maybe see if the 60 year old can pay a bit more than $1250/month. you said "would like to pay", but it`s your property - you pick the price.


David.

 

[lbazzani]

I have to agree with everyone as well. Older tenants are best tenants in my experience. One of my properties, a house, is rented to an older couple and the place looks better now than when they moved in.

As far as the the rent goes, I would suggest that you tell him you`ll make him a "deal" by giving him the unit at that price but he`s got to look after the minor repairs himself. The catch is, if your paying the utilities you`ll want to inspect the place occasionally to make sure it`s not being neglected. Also, if he`s not doing any of the necessary repairs as promised, I would threaten a rental increase and then deliver on it if nothing is sill done.

 

[BDFI]

Thanks Everyone! David - I have tried getting him to come up in price but he is a tough negotiator and won`t budge on the $1250. I do like lbazzani`s idea of having him look after the minor things that will come up in the unit.

Thanks again,
Bart

 

[realfortin]

QUOTE (BDFI @ Mar 8 2009, 09:21 AM) Thanks Everyone! David - I have tried getting him to come up in price but he is a tough negotiator and won`t budge on the $1250. I do like lbazzani`s idea of having him look after the minor things that will come up in the unit.

Thanks again,
Bart
I wouldn`t have him pay any more. You would probably save that much in water/sewage, heat and electricity. I`m sure with him and his other friend, downstairs you would even be allowed to put in a thermostat that reduces the heat a few degrees at night to save on heat. A family with babies wouldn`t but a mature individual usually prefers it slightly colder at night.

Young couples = job changes, babies, layoffs and other surprises.

 

[Ken15]

Don`t forget...

Babies = Noise!!!

Could disturb exsisting tenants!!!

 

[mortgageman]

Hands down the older fellow.
He`s likely to stay there for many years, will definitely be easier on the property and may even do pro-active maintenance.
Little kids will create all sorts of smears on your walls. Count on at least a totally new paint job once the family moves on.
If the older fellow pays $100 less a month than the family, how many months would it be before the potential maintenance costs of having the family there equal out?
I agree that if he knows the upstairs tenant then your biggest potential source of frustrations - inter-tenant relations - are greatly reduced.

 

[mortgageman]

double post

 

[invst4profit]

I would offer to split the difference on the rent with the old guy. If he passed on that I would drop them both and continue the search. As soon as you tell the old guy you are definitely passing on him you will see how bad he wants the place.
The art of negotiating is invaluable.

 

[realfortin]

QUOTE (BDFI @ Mar 7 2009, 06:32 PM) Applicant #2 - is a 60 year old single male. He is a friend of the basement tenant, I have met him before, he has excellent refrences and appears to be a quality tenant. He has also indicated that he would like to rent long term but only would like to pay $1250/month.

Will it still cash flow with the older guy?
I`m still strong on going for the older guy at 1250$. The basement one is a long term tenant and since they are friends, they will likely both stay there a lot longer. There is also a chance that as a duo, they may even want to take on small improvement projects. I think it is a win/win situation. You improve the quality of life for your existing tenant while still providing a good income for yourself. Isn`t that what it is all about?

RF

 

[BDFI]

QUOTE (realfortin @ Mar 9 2009, 07:45 AM) Will it still cash flow with the older guy?
I`m still strong on going for the older guy at 1250$. The basement one is a long term tenant and since they are friends, they will likely both stay there a lot longer. There is also a chance that as a duo, they may even want to take on small improvement projects. I think it is a win/win situation. You improve the quality of life for your existing tenant while still providing a good income for yourself. Isn`t that what it is all about?

RF

It will negative cashflow at $1250. I have rented it to the older gentleman and did explain to him he was getting a deal and part of the deal would be him looking after the small issues/improvement projects. Although not ideal I would rather chip in a small amount every month and have the tenants get along and hopefully stay awhile (reducing turnover/advertising costs/my time showing). Ideally a win-win situation for the tenants and myself. If I rented to the other couple I am sure the basement tenant would move out as soon as the baby kept him up at night. Since I self manage this property and still have a job I also took into consideration the time/wages lost dealing with little things that this gentleman will deal with that a younger couple may have need assistance with.

Thanks all for your input!
Bart

 

[Luong98]

QUOTE (BDFI @ Mar 7 2009, 07:32 PM) Hello,

I have a couple of party`s interested in renting a main floor of a 1/2 duplex from me and would like opinions on who you would rent to. The property is located in Cochrane, AB, is approx. 1100 sq`, legal accesory suite is located below (with long term tennant) and I pay utilities (I know I will take some hits for that!).

Applicant #1 - is a young couple that is expecting their first child in October. They have indicated that they would like to rent long term (>1 year) and would be paying $1375/month. I have not run credit checks on them yet but one of them let me know that he went through a bankrupcy approx. 2 years ago.

Applicant #2 - is a 60 year old single male. He is a friend of the basement tenant, I have met him before, he has excellent refrences and appears to be a quality tenant. He has also indicated that he would like to rent long term but only would like to pay $1250/month.

Each applicant has their pros and cons - who would you rent to???

Thanks,
Bart

Hello Bart,

If a $100 less isn`t going to affect you that much, I would definitely rent to the older gentlemen. One of the problems with renting a property with seperate main floor and basement suites are making sure the tenants get along. Considering that the applicant is already friends with your basement tenant is a bonus. Good luck.