June 19, 2023
Last Updated
In this week’s episode, Podcast Host, Property Manager & Business Owner, Andrew Schultz, sits down with FCRA-Certified Screener, Chelsea Kline, of RentPrep to review what it takes to verify a renter’s income. We’ll also go over our income verification product here at RentPrep.
Tis the season for landscape maintenance. In this episode, we’ll also review who maintains a rental property lawn.
Last, but not least, we’ll chat about renting out to students and how to go about tenant screening for low-income renters and more! Listen to the podcast below.
Show Notes:
Andrew Schultz (00:00:18):
Hey everyone. Welcome to the April AMA session here at Rent Prep. I’m Andrew Schultz. I am the community manager here at Rent Prep. I am also a licensed real estate broker here in the state of New York with about 14 or 15 years of experience in the property management and rental property industries. As I mentioned, this is our May AMA session. If you’re watching us live on Facebook, feel free to say hello. We do have Josh monitoring the comments on the back end. We’re gonna go ahead and add him into the stream. How are you today, Josh?
Chelsea Kline (00:00:46):
I am doing well. It is, it is a beautiful day in Buffalo, New York. It
Andrew Schultz (00:00:50):
Is a beautiful day in Buffalo, New York. It’s actually, the weather here is finally seeming to have broken. We were dealing with some pretty nasty it, it just winter. Did not want to end here this year.
Chelsea Kline (00:01:01):
Yes, it, it has been good. I’ve been getting out there golfing. I actually went to the P G A championship this weekend, just so half in Rochester. Just so happened that it was the day that it rained. Seven and a half hours out of the eighth at the tournament was going on, but mm-hmm. <Affirmative> a little bit wet, but it was, it was a cool experience for anybody living in living in this area.
Andrew Schultz (00:01:23):
Did you see Josh Allen out there? I know he was out there.
Chelsea Kline (00:01:26):
I didn’t see him. The, the day that he was, he was there. Oh, darn. Would’ve been cool.
Andrew Schultz (00:01:31):
So I’m gonna go ahead and add our guest into the stream. This week we have, sorry. This month we only do these once a month. This month we have Chelsea Chelsea’s one of the screening. Actually she is the screening manager over@rentprep.com. She’s one of Josh’s coworkers and she’s right there in the bullpen Right along everybody else. Chelsea, how are you doing today? I’m
Speaker 3 (00:01:49):
Doing well. Thanks for having me.
Andrew Schultz (00:01:51):
Thanks for coming on. Looks like you might actually be in one of the meeting rooms and not out in the bullpen at the moment, which is nice. <Laugh>.
Chelsea Kline (00:01:57):
Yeah, <laugh>. I don’t know if we’d be able to, we’d be able to do the, if we’re out on the,
Andrew Schultz (00:02:02):
On the floor, we would get at the very least we’d get a copyright strike cuz you guys normally have music on the floor. So, yeah.
Chelsea Kline (00:02:10):
The fun work environment, but
Andrew Schultz (00:02:12):
It’s a good time. Everybody
Chelsea Kline (00:02:13):
Gets stuff done.
Andrew Schultz (00:02:14):
Well, and like, I don’t know if people realize I’m not in the rent prep offices. Like, I very seldom of over there, unless there’s a meeting or something like that. I do these from my office. And then Josh, I know you guys, you’re kind of on one side of the rent prep office and like, there’s two suites there and then Chelsea’s in probably one of the meeting rooms or something like that by the looks of things. But it’s a pretty substantial office. There’s how many people are, are working in the office now?
Chelsea Kline (00:02:39):
Hmm. Four. Are we, we up to 14? I think we’re 14. 14, yeah,
Speaker 3 (00:02:44):
Because we’re full. We’re full.
Chelsea Kline (00:02:46):
Right, right. Yeah. 14 in the office and then we’re all, we’re broken off into pods based on, based on your, your specialty or, or who you’re, what you’re kind of working on. So a little bit, you know, a nice collaborative environment to mm-hmm. <Affirmative> to get stuff done.
Andrew Schultz (00:03:00):
Well, it’s nice because I was, I’d been a rent prep customer for a long time and I don’t think people realize that either. Like, I met Steve, Steve, the c e o Steve and I met back when I was first getting into the real estate industry. When I was first getting into property management. We met at a bigger pockets meetup of all places. And I was a rent prep customer for a long time before I ever started doing anything with the podcast or with the AMA sessions or anything else. So it’s been an interesting path. It’s been cool to see how rent prep has grown kind of right alongside own Buffalo in some ways. And it’s just way bigger now than I think even Steve ever thought it was gonna be. But it’s been cool to watch the company grow over time.
Chelsea Kline (00:03:42):
For sure.
Andrew Schultz (00:03:43):
So, all right, Chelsea, tell us a little bit about you and then we’ll jump into questions here.
Speaker 3 (00:03:48):
Yeah. So I’m Chelsea, the screening manager. I have been with Rent Prep for three and a half years now. I’ve been the screening manager for two and a half years. I started the position not knowing anything about tenant screening or even the rental industry. And it’s actually, I find a lot of it very fascinating. So I’m super happy with what I do. I like helping landlords every day as well. So,
Andrew Schultz (00:04:16):
Did you say how long you’ve been with with rent prep?
Speaker 3 (00:04:19):
Yep. Three and a half years I’ve been here.
Andrew Schultz (00:04:21):
No, it’s a long time. Yeah.
Speaker 3 (00:04:22):
<Laugh> I started in February of 2020, so right before Covid hit.
Andrew Schultz (00:04:27):
Oh, wow.
Speaker 3 (00:04:28):
Yeah, so I actually did my training. I was the first person to ever train remote. Mm-Hmm. <Affirmative>. Cause I had only been there for like a month when we went home, so
Andrew Schultz (00:04:36):
That’s crazy. That’s, and I know there was a lot of, I remember talking to Steve during that whole thing and like, just the steps that they had to go through for not F D C P A fair Credit reporting. Is that what I’m looking for, Josh?
Chelsea Kline (00:04:51):
Yeah.
Andrew Schultz (00:04:51):
Yeah. Just the, because there’s, you know, there’s restrictions on where you can look at the data and how the data can be accessed and stuff like that with the, with the screening tools that you guys use and Yeah, I can remember Steve was telling me about that. It was pretty intense.
Chelsea Kline (00:05:03):
Yeah. We had to actually
Speaker 3 (00:05:04):
Remote.
Chelsea Kline (00:05:06):
Yeah.
Andrew Schultz (00:05:06):
Yeah. It was a whole process, so mm-hmm. <Affirmative>.
Chelsea Kline (00:05:09):
It’s crazy. Yeah. And yeah, now actually Chelsea Chelsea’s moved over to my pod now she’s said the, she’s had the honor and the pleasure of, of sitting across from me now for about <laugh>, I don’t know, what is it? Probably four months, maybe three months she’s been over here. Yeah. So yeah,
Speaker 3 (00:05:26):
I think towards the beginning of the year.
Andrew Schultz (00:05:28):
Nice. Yeah.
Chelsea Kline (00:05:29):
So it’s good. But I’m, I’m excited. I saw, I saw the agenda for today’s show. We’ve got, we’ve got Chelsea on to review a income report for us. We’ve got some really cool Facebook questions that I looked over that, that had come in. And then we’re gonna take obviously some live questions and some pre-submitted questions, so mm-hmm. <Affirmative>, why don’t we, why don’t we jump into it?
Andrew Schultz (00:05:54):
Sounds good to me.
Chelsea Kline (00:05:56):
Let’s do it. Let’s take let’s do a question first. Let’s break the ice here.
Andrew Schultz (00:06:01):
Where do you wanna start?
Chelsea Kline (00:06:07):
Hold on. I got my, I got my handy dandy. You got your cheat sheet? Yeah, I got too many tabs open. You know me.
Andrew Schultz (00:06:15):
I understand.
Chelsea Kline (00:06:19):
Well do we have, where’s the one? There’s one relating to, oh, why don’t we do the question from Ted?
Andrew Schultz (00:06:26):
Okay. Let me grab Ted. There we go.
Chelsea Kline (00:06:29):
Okay. Question from Ted. Income verification. It’s, it seems a common practice is a minimum of 3.5 times the rent. Do you consider the gross or the net pay for this?
Speaker 3 (00:06:44):
Yeah, I can answer this one. So common practice is usually anywhere from 2.5 to 3.5 times the rent. For our income verification specifically, we use net pay because we are using applicants bank banking information. So that would be their net pay.
Chelsea Kline (00:07:03):
Gotcha.
Andrew Schultz (00:07:03):
Yeah. And on our end from like when we’re actually verifying tenant data, running an application for screening purposes, we’re looking for three times net as well. So kind of right in that same line, most people seem to go somewhere between two and a half and three and a half. Like like Chelsea had said there, and we’re going with three times net based on the fact that you net net, net income’s the only thing they have access to at the end of the day. So if you have a bunch of, you know, alimony payments, child support payments, back taxes, something like that, you know, even retirement and health insurance and stuff like that, that’s money that the applicant doesn’t have access to for the purposes of paying their rent. So we always go buy net income for that exact reason.
Chelsea Kline (00:07:48):
Has there ever been any special circumstances that you’ve, you’ve gone by a, a different multiplier? Are you, has it always been just stick to your gone stick with 3.5? Like normally that’s, that’s just a, a good safe bet.
Andrew Schultz (00:08:02):
So we’re using, we’re using three three, let me think here. I’m trying to remember what our old criteria was cuz we actually have changed criteria a few times. I think that we may have used to allow for two and a half times net. But you would have to pay like a first last in security. And since New York State no longer allows for first last in security, I think that’s when we went to three times total. And that was that’s where we’re at currently. And actually, since we’re talking about income verification, I’ll mention that we actually just changed on our income verification for, for us at own Buffalo, we used to look for three times net and that was just part of the points total. Cuz we use a points matrix when we’re, when we’re approving or denying applications, we’ve actually changed that now. So the income is a requirement at three x and then everything else is point-based after that. So that’s just a little change that we made internally here within the last couple of weeks. We’ll see how it pans out. But yeah, I’m looking forward to seeing how that, how that works out for us.
Chelsea Kline (00:09:01):
Yeah, I’m definitely, definitely curious about that. Mm-Hmm.
Andrew Schultz (00:09:04):
<Affirmative>.
Chelsea Kline (00:09:06):
Okay, cool. So since we’re talking to income income verification, why don’t we Chelsea, I know that we have, we have a sample REM prep income report. Why don’t we, why don’t we take a few minutes for our viewers and and run through that and review it.
Speaker 3 (00:09:24):
Okay.
Andrew Schultz (00:09:25):
Gimme one second. Let me get that pulled up on screen here. It should be able to pull just the tab. There we go. There we go. Perfect. And then Chelsea, I can move up and down the screen. Just let me know what you need.
Speaker 3 (00:09:39):
Okay. Yeah, so this is a sample report of our income verification report. This is actually one, probably my favorite product that we offer, just being that it is accurate. With the capabilities of technology nowadays there’s a major concern for fraud or someone giving fake pay stubs or bake bank statements. So this is a foolproof way to accurately assess your tenant’s income without, you know, with that security of knowing that it’s legitimate. Let’s see. So at the top here, it kind of gives you a breakdown. It does give you that net income to rent multiplier. It will tell you what your applicant is actually at compared to the rent. And, and whether or not they meet that 2.5 threshold or not. So to the right there you can see that they have the monthly rent, which is what as a landlord you would enter in. And then it takes the recurring monthly income from the report and it totals it up there at the bottom. So you can see that how this actually works is the applicant actually connects their online banking account and then goes through steps and data is actually pulled directly from the bank account and it’s actually deposit data. So you can see that net income that is coming in there
Speaker 3 (00:10:58):
For. And then this is the net income summary. So it just gives you a breakdown of how much money’s coming in over the past 12 and three months. And then it breaks it down by recurring versus non-recurring. Recurring is gonna be like direct deposit, anything that comes in on a scheduled basis. So it will give you the total breakdown there. And then non-recurring are just those random ones whether it’s they got a bonus or something like that, or even
Andrew Schultz (00:11:27):
Three on something like that.
Speaker 3 (00:11:28):
Yeah. Mm-hmm. <Affirmative>, even cash deposits anything like that. So it will break it down for you so you can see. And then count balance, oh,
Andrew Schultz (00:11:40):
Go ahead. Can I ask a question on the, on the net income summary? So if you’re looking to figure out what their monthly income is on a monthly basis, what number should we be looking at on this?
Speaker 3 (00:11:50):
Typically we recommend going by the recurring just because, you know, that’s coming in on a scheduled basis. Mm-Hmm. <affirmative> non-recurring could be at random. So if you want a more consistent answer using the recurring typically the three months since that’s the most recent data for you.
Chelsea Kline (00:12:07):
What if my, what if my applicant’s non-recurring is significantly higher than my applicant’s recurring? Does that, does that raise any, raise any red flags? Like if it still hits my, if it still hits my ratio, but still it, it’s, it doesn’t look as stable because I’m not seeing it in the recurring section. Is there anything to be worried about there?
Speaker 3 (00:12:32):
Yeah, so not necessarily red flags, that would more so just be a notification of like maybe they’re self-employed so their money is coming in, you know, not at a scheduled basis. They don’t give themselves direct deposit or anything. So you can kind of, you know, match those kinds of things up. If the applicant says they’re self-employed, if more money’s in non-reoccurring, that would make sense then.
Chelsea Kline (00:12:54):
Gotcha.
Andrew Schultz (00:12:56):
Okay. Yeah, that could also be something like if they recently sold a property and made a deposit of the proceeds from the sale, would that show up under non-reoccurring?
Speaker 3 (00:13:03):
Yeah. Yep. So any of just those one time payments? Exactly. Mm-hmm.
Andrew Schultz (00:13:07):
<Affirmative>. Okay. Very cool.
Speaker 3 (00:13:10):
And then the account balances summary. So these are the actual accounts that the applicant is gonna connect. So for example, this applicant connected a checking account and then also a savings account and it gives you the breakdown of what they currently have in their bank account, what’s available, the average and then the type. And then it’s really neat. It shows you the account holder name so you can actually see, you know, does that match my applicant’s name? Cuz that is being pulled right from the bank information. The applicant doesn’t enter that or anything that’s from the bank directly.
Andrew Schultz (00:13:43):
That’s interesting. I didn’t know that it did that. Yeah,
Speaker 3 (00:13:46):
Yeah, it’s pretty neat. And then just the institution is the banking, so you can see, you know, is it Citizens Bank or Bank of America? It’ll just show that in the institution.
Andrew Schultz (00:13:58):
So when it’s talking about average on the account balances, is that on a three month or a 12 month?
Speaker 3 (00:14:04):
This one is on the 12 month, so this is the total time that we’re seeing here.
Andrew Schultz (00:14:09):
Gotcha, okay. Yeah,
Speaker 3 (00:14:12):
Which is kind of scary, the negative 25.
Andrew Schultz (00:14:14):
I was just looking at that. Yeah, I mean I know it’s I know it’s a, you know, a generated report, so it’s something that we can, but that’s I wouldn’t wanna see that if I was, I was doing a tenant screening. Yes. I feel like we can’t just gloss over it. Yes.
Chelsea Kline (00:14:28):
<Laugh>
Speaker 3 (00:14:28):
Super helpful, but that’s a little scary.
Andrew Schultz (00:14:30):
<Laugh>. Yeah. Incredibly useful. Yeah. Well, and actually we have a question, let me see if I can pull this question up here. Let’s see. Is there a way to consider assets when someone has a lower income? This is a question that we were gonna jump into later. But actually Josh had kind of touched on, is there, you know, when somebody has income that’s comes in, in a weird way, it’s either a non-recurring or something, something from a sale or a lawsuit or a tax refund or whatever. One of the ways that we verify income for someone that doesn’t have a traditional employment situation is we look for 12 months of rent on average in their bank account for a period of 12 months. And if this is a 12 month average and they have, you know, a bunch of money sitting in their bank account, that would actually show up on this report. So you don’t have to do the manual verification of looking at 12 months of credit or excuse me, 12 months of bank statements to try to put that together. You have it right here on this format already, which is kind of handy. Mm-Hmm.
Speaker 3 (00:15:29):
<Affirmative>. Yeah, absolutely.
Chelsea Kline (00:15:32):
Yeah. And I think there was also another question that I think we, we may be able to just knock out while we’re here. I saw saw one from Rita and Rita’s. Rita has submitted a a few in the past. So hi Rita. She asked would a prospective tenant working for Uber’s income show up on the rent prep income verification report?
Speaker 3 (00:15:56):
Yeah. So as long as the applicant is receiving direct deposit from Uber into their bank account, it will show up since it is gonna pull any of that deposit information. I think Uber typically does direct deposit is their main source for payouts. I think they might have like a debit card or something that they use too, but that also is connected to like a bank account and they can always connect that account separately too.
Andrew Schultz (00:16:22):
It’s worth noting though, if you’re doing screening on anybody who has any of the gig economy stuff, whether it be Uber, Lyft, Uber Eats, DoorDash, Instacart, any of those, that’s always going to be a gross income number. There’s no deductions on that because anybody who’s doing the gig apps is considered an independent contractor. So, you know, trying to verify that income more often than not, you’re not gonna find the Uber drivers having profit and loss statements showing what their expenses are showing depreciation on their vehicle and things of that nature. So it can be a little bit difficult to truly verify what the income is on that. Like the net income is on that. So that’s just something to keep in mind is that if you’re doing a report like this and it does pull something from a gig economy, that’s gonna be gross income versus a regular pay stub, which is gonna be net income because that’s the money that’s physically hitting the bank account. And I think, I think I’m right by saying that, but Chelsea, can you confirm?
Speaker 3 (00:17:20):
No, I’m pre I’m pretty positive that you’re correct in that. Then it would just come at the end of your tax time where they would pay that back, so
Chelsea Kline (00:17:27):
Mm-Hmm.
Andrew Schultz (00:17:28):
<Affirmative>.
Chelsea Kline (00:17:31):
Cool.
Speaker 3 (00:17:32):
All right. And then net income sources, this is basically a breakdown of what, where the money’s coming from. So recurring, so that would be any type of payroll is the most common that we see here. So they have a recurring from payroll, it tells you how much in total has been deposited from this source. And when it, it says the total, it’s telling you the total by how much data was pulled. You can see up to a year’s worth of data on these reports. Some banks will only provide like nine months or something like that. Which it will tell you at the top of the report like what the dates are. Yeah, date range. So says, yeah, so this is a year, but some banking a lot of time like credit unions will limit the amount that they show. So they might only show nine months instead of 12.
Andrew Schultz (00:18:24):
That too.
Speaker 3 (00:18:25):
Yeah. Sorry.
Speaker 3 (00:18:27):
Okay. You’re good. So yeah, that’s only gonna be the total for the amount on the report and then monthly by source would just be how much they’re getting in every month from that source. So we can see this person is getting 3,956 and 4 cents a month from their payroll. So that’s helpful when comparing to the rent as well. And then basically the start and end date for the deposits, again, it is just considering the time that’s on the report. It, the start date is not the actual like hire date of the employee or anything. That’s just the first deposit on this report. And then the institution again is just the bank. And then same thing for non-reoccurring, it just li lists out all of those different sources of where they’re coming from. It’s common on, you know, not sample reports that you see multiple non-reoccurring, non-recurring listed just because they, there’s usually quite a few of ’em and they come in just singly.
Andrew Schultz (00:19:28):
I had a quick question on the net income sources this monthly by source for recurring, is that an average, say we have an eight month report, is that an average over that entire eight month period? Basically for as good as the, as you have to match your averages to the, to the dates on the report is basically what I’m driving at there. Okay. Yeah, exactly. I just wanted to make sure we were on the same page cuz that’s also going to impact you up here talking about your account balances summary. Again, that average is not necessarily a 12 month average, it’s an average based on however many months of data are in the report. Yes. So just gotta double check that.
Speaker 3 (00:20:01):
Yep.
Andrew Schultz (00:20:02):
Okay, cool.
Chelsea Kline (00:20:04):
Cool. It looks like a Facebook Live question came in, so gimme one second here. As I toggle back. Jennifer asks whatever percentage of net pay you use, 2.5 to 3.5, if one adult on the lease qualifies, do you allow the group to move in or do you require that all adults on the lease meet the minimum 2.5 to 3.5 requirement?
Andrew Schultz (00:20:31):
I think I’ll take that one. Yeah. <laugh>, we re basically look at three times net combined across all applicants. So if we have two applicants, we consider the income combined for both. If only one person in the household is working, we’re working off of that person’s income. We don’t require, we don’t require each person to have 2.5 or three simply because in a lot of instances that’s not feasible. For instance, if you have a household where one person goes to work, the other person is a stay-at-home parent or something like that, you, you’re never gonna be able to approve that application because that other parent is never going to have two and a half times income. They don’t have a job. Right. So we look for a total of three times net across all of the applicants and we combine the income for all applicants.
Chelsea Kline (00:21:23):
Yeah, that makes sense.
Speaker 3 (00:21:25):
Mm-Hmm. <affirmative>,
Chelsea Kline (00:21:27):
Cool. And then, and
Andrew Schultz (00:21:29):
Then go ahead.
Speaker 3 (00:21:31):
Just the last section on here. It’s just each individual deposit you can see it lays it out for you so you can see, you know, on 11,100 2022 there was $4,000 deposited from the closing back payroll. So these are just each individual one that you can go through just a very detailed view. And that’s for report
Chelsea Kline (00:21:56):
<Laugh> <laugh>. Well, cool. Thank you for that.
Speaker 3 (00:21:59):
Yeah, of course.
Andrew Schultz (00:22:00):
Yeah, those reports are incredibly useful. The nice thing is the income reports can be tied in with your credit and background check reports as well. It basically just boils down to what type of, what type of information you’re looking to get as the property owner. And then making sure that you, I would recommend talking to somebody at Rent prep or going over to the rent prep website prior to even listing your apartment for rent so you know what your process is going to be. And just making sure that you understand what you’re gonna get with whatever package it is that you order. So mm-hmm. <Affirmative>. But yeah, that’s a really good breakdown of those income verification reports. And that’s, where does that information come from ultimately? I mean, not know it comes from the bank, but like is there like a backend service that handles this or how does this work?
Speaker 3 (00:22:41):
Yeah, so we use a third party partner called Pay Score. Mm-Hmm. <Affirmative>. So everything that the applicant receives is from pay Score directly. We just have a good partnership with them
Andrew Schultz (00:22:51):
And that used to be the closing docs I think. Right. So a lot of people are familiar with the closing docs. As long as it’s not, what is the, is it the workplace number or the workforce number, whatever that system is called? Work Work number, yes. They’re a train wreck. Like I used to, prior to getting into real estate, I worked at Best Buy and we had to go through work number for a lot of our HR stuff and it was always a nightmare and trying to get any sort of a work verification employment verification through them, they charge you like $50. It’s a nightmare. It’s yeah, I’ll give you very
Speaker 3 (00:23:23):
Little
Chelsea Kline (00:23:23):
Inform company.
Andrew Schultz (00:23:25):
Yeah, exactly. I feel really bad for anybody whose company uses them for HR purposes, but that’s another topic for another day. <Laugh>.
Chelsea Kline (00:23:34):
All right. Should we, should we move on to the other questions? Sure. All right. How about, all right, why don’t we do this question from Kathy. Question from Kathy in our rental agreement, the tenant is responsible for mowing the lawn. He’ll be moving out soon and two days ago asked us to get a mowing service to take care of the lawn. We agreed to do so. Is, is it appropriate for us to deduct the cost of the two or three times that mowing service will mow before he moves from his security deposit once he has moved out? We are in Boundary County, Idaho.
Andrew Schultz (00:24:18):
I would probably, so I’ll back up. Yes, you can charge this against his security deposit if he leaves the lawn uncut when he moves out because he’s responsible for the lawn care of the property. Right. If he wants a lawn service during the last little bit of time that he’s living in the property, my recommendation would be charge him on the front end for that, whatever the cost of the service is going to be, rather than trying to charge it against the security deposit at move out because the security deposit should be used for damages, not for recurring services. So if you walk in there and find that the, you know, refrigerator in the unit is destroyed, well that’s gonna eat a pretty substantial portion of the down payment, or excuse me, the security deposit. I, I’m gonna assume you might not have money left to cover the lawn care service after you look at all the damages inside the unit. So whenever there’s a recurring service like that, and we have a couple of these that we handle the lawn care service for a couple of our single family tenants cuz they just don’t wanna be bothered with it. But they pay that with their monthly rent so they know what the cost of that is. They pay that with their monthly rent on the front end so that we don’t have to worry about chasing them for money at the time of move out or something like that.
Chelsea Kline (00:25:25):
Yeah, that makes sense.
Andrew Schultz (00:25:28):
That said though, if the tenant leaves the yard looking like garbage when they move out, absolutely you can charge them for, for, you know, the lawn cutter whatever needs to be done to get the lawn ready, if that was part of their responsibility and it was in their lease.
Chelsea Kline (00:25:41):
Right. Cool. All right, onto the next one. Question from John. Hello from Wisconsin. Curious how y’all would handle this co applicants together they meet screening criteria but I’m stuck on the credit score. I require a minimum credit score of 600. He has 7 41. However, the co-applicant doesn’t have enough credit history to generate a credit report or credit score. He is curious how we would handle that <affirmative>. I think maybe Chelsea this would be should be one for you.
Speaker 3 (00:26:18):
Yeah, I have a little to weigh on, weigh in on this. Not having enough credit history to generate a score isn’t necessarily negative. It’s just simply they don’t have any history. It’s common to see with really young applicants. And even, you know, older individuals who maybe have paid off their loans for years. Or they just pay cash for everything. So it’s not necessarily a bad thing in regards to, you know, accepting them or not that. Andrew, I don’t know if you can chime in on that, what you guys do.
Andrew Schultz (00:26:52):
So with something like this, sorry I’m pulling the question up so I can look at it. They meet the criteria. One has a 7 41, the other doesn’t have a credit score. Kind of like what you had said Chelsea, I know a lot of times, especially when we had student rentals that we were managing, we would always tell students or really any applicant, we would rather see no credit than bad credit. Yeah. If somebody hasn’t established credit to me, it means that they’re either not in a position where they want to establish credit or something along those lines. Especially, you know, especially with college kids cuz they’re bombarded with credit card offers at this point. But realistically speaking, if they don’t have bad credit, that actually says a lot more to me than someone who has no credit. Cuz no credit could just be like you said, somebody that wants to live a cash-based life, doesn’t want a debt, things of that nature.
Andrew Schultz (00:27:39):
So how we handle that on our end is we look at the credit profile cuz you can still have a couple of records on your credit profile without having a score yet it takes time for that score to generate mm-hmm. <Affirmative>. So we look to see if there’s a positive or negative payment history and we kind of look at that to see if that’s going to give us some indication as to how they are one way or the other. The other thing we do is we assign a credit score of 500 for scoring purposes. And again, in this situation where you have two tenants, we would take those two tenants credit scores and average them together. So at this point it would be a 7 41 and a 500 average. Those together divide by two. Are you still coming out over top or over 600, which is, that’s our minimum threshold is 600 for credit score. That’s kind of what we’ve done when somebody doesn’t have a credit score is assign them a 500, which is low. Like, you know, we’re not trying to say it’s not low, but we’re not gonna give somebody a perfect credit score for having no established credit either. At least it gives us something to benchmark them against when it comes to trying to score someone for, for tenant placement purposes.
Andrew Schultz (00:28:49):
Josh, you’re muted.
Chelsea Kline (00:28:53):
Welcome
Andrew Schultz (00:28:54):
Back.
Chelsea Kline (00:28:54):
I dunno why, dunno why I’m muted, but All right, well let’s let’s move on to the next one here. All right, how about question from Navin if I’m saying that correctly. Hello? Any risks renting to international students sponsor his maternal uncle who gives money every month he lives in Dubai. Student can provide proof about the receipt of money from his uncle. Is that a red flag? I don’t see how one can run a background check and check the reliable source of income with no jobs. Couple recently came to the us Has anyone ever has anyone have dealt with a situation like this? Any information is appreciated.
Speaker 3 (00:29:42):
In regards to the background check portion there really isn’t a way to run a background check. There is international screenings offered in some places, but they are very costly and they can take up to like a month to two months to come back. So they’re very hard to run. We only run nationwide here, but yeah, you likely wouldn’t receive anything anyways if you were to run like a US nationwide search just because they don’t have any history here. Mm-Hmm <affirmative>.
Andrew Schultz (00:30:15):
Yeah and we had, we had this actually pop up last year. We had a international student, actually I think they were from Dubai now that I’m thinking about it. They had an international student last year that they were trying to get an apartment and wanted to know how we actually go about screening for that on our end. And directly, I’m actually pulling this directly from my screening criteria, which is basically the guide that we use when we’re screening international students engaged in a program in the US must provide the affidavit of support, either the sponsor or student’s bank account statement, photocopy of the student’s passport, photocopy of the student’s most recent US visa photocopy of the I 94 photocopy of most recent US port of entry stamp, photocopy of current and all previous I 20 forms and or changes of status approval. And we’ll need a co-signer who can meet all of the co-signer requirements and all of our co-signers have to be able to show four and a half times the rent in income and they have to be in the United States.
Andrew Schultz (00:31:14):
So essentially, I I understand that was a mouthful. There’s a lot going on there <laugh>, but really what it boils down to at the end of the day is we’re not going to accept an international co-signer because we have absolutely zero way to do anything in the event that the tenant defaults. So if they are gonna have a co-signer, which is pretty much gonna be required for any international student who’s over here that doesn’t have some sort of employment they’re gonna have to have some sort of a state side co-signer that shows the income requirement that we require. And short of that, it’s, it’s kind of difficult to screen somebody who’s just arriving or anything along those lines. A lot of times, cuz we’ve had engineers from India and stuff like that come over as well, usually we can get them through with an offer letter from their employer as long as the offer letter shows the pertinent information.
Andrew Schultz (00:32:06):
And again, I’m looking at my documents here. Official company letterhead must be legally registered in the state where the property’s located. The employer must be letter must have a date. The offer was extended, the start date of employment, the base income for the position. And we must be able to validate the letter with the employer. So we take the offer letter that the tenant brings us or the applicant brings us, and then we’re calling the HR department or the supervisor of that employee to make sure that they actually do have a legitimate job offer there and that it’s not just something that they printed off on the internet.
Chelsea Kline (00:32:39):
We gotcha. Cool. All right. Let’s do this next one from Becky. Becky’s asking, during a tenant screening, what do you do if you can’t get ahold of the previous landlords? The one is a management company and the other is an apartment complex.
Speaker 3 (00:33:03):
What I would recommend here is trying to obtain either an email address or a fax number to the company. You can do that either by Google search and find it that way. I’ve done that a few times and try to reach out to them through email or fax. That is the common practice for a lot of property management companies is to do it through email and they want to see the signed consent as well that it’s okay for you to obtain this information. So I think you’d have better luck if you went and tried that route.
Andrew Schultz (00:33:34):
And then on our side, we’ve actually, and believe it or not, we’ve stopped doing landlord verifications. For the most part we don’t do phone call landlord verifications anymore for a period of time. Rent prep was doing ’em for us. I don’t think rent prep’s even offering that as a service to, to outside clients anymore. I don’t know if that’s something that I was an experiment on or whatever, but I know that it’s not something that rent prep’s offering as far as doing the outbound landlord verification calls. And realistically speaking like the laws changed here in New York State to the point where we realized that doing landlord verification calls didn’t necessarily net us any result of value. And the reason I say that is because it used to be that you could take a phone number and run a reverse search on it and see, okay, this phone number comes back to this person who lives at this address or this business at this address.
Andrew Schultz (00:34:25):
Now everybody uses cell phones and you can’t just do a reverse search by phone number anymore. So now what do you do? All right, well we can try to compare the tax record the name on the tax record to the name on the application, but again, you’re calling a phone number that may or may not actually be that person. Blah blah blah, blah blah. So we’ve stopped doing landlord verifications. What we do now is we look for 12 months of on-time rent payments and the tenant applicant has to provide that to us. And if they can’t provide that, we do offer a form that they can take to their landlord and their landlord has to take that form and get it signed in the presence of a notary, believe it or not. Because literally that’s the only way that we know that the person who filled out the form was actually the person who’s tied to the tax record who, you know, it’s, it’s in the interest of not getting lied to.
Andrew Schultz (00:35:14):
And I honestly think that that’s probably what happens in a lot of tenant verification calls landlord verification calls. I think most of it’s lies cuz if you have a good landlord, they don’t wanna lose the tenant. And if you have a bad landlord, they’re gonna say whatever’s necessary to get rid of that tenant. Yeah, I, I’m rambling a little bit here. I’ve actually posted a much longer response to this question on a different Facebook thread. But we’ve stopped doing tenant verification calls because we felt that the results weren’t, the juice wasn’t worth the squeeze. Like the amount of time that we were putting into those calls versus the responses we were getting just wasn’t worth it. So now we tell the tenant, Hey, you’ve gotta verify that you paid your run on time. Show me canceled checks, show me money order receipts, show me a ledger from your online account that’s been, that’s been verified by your landlord.
Andrew Schultz (00:36:02):
Or go get that letter verified, you know notarized by your landlord to prove that you did pay where you said you were and everything else. And that’s, that’s how we’re doing it. Now that said, I will mention that you can absolutely qualify for an apartment through own Buffalo without having a landlord verification. Our criteria is set up in such a way that, you know, if you’re, say you’re living at home, this is, you’re gonna be your first apartment or something, you can still qualify. You are selling a house, don’t have a landlord history, you can still qualify. So there’s, you know, there is a path to getting through. But for most people it’s boils down to you need to prove that you’ve made your rent payments on time. And especially after Covid, we’re, we’re taking that really, really seriously.
Speaker 4 (00:36:44):
Mm-Hmm. <affirmative>
Chelsea Kline (00:36:48):
Got it. Oh, I was muted again. I don’t know why. I don’t know why. I don’t know how that keeps happening, but All right. Let’s let’s move on to the next one here. All right, this is a long one. We got one from question from Kimberly regarding source of income and rental subsidy. When it’s not Section eight, can anything be called a rent rental subsidy? Question mark. Can I ask for proof that the rental subsidy has a history of being paid in an amount close to what is needed to pay the current rent? I I recently had a couple who ran their own 5 0 3 [inaudible] nonprofit claiming that it would cover the remainder of the rent that their income didn’t cover, but our rent was 1300 higher, all in bold or all in capitals than the current rent. Can people start claiming relatives or go FundMe will pay for part of their rent as rental subsidy? Can I make the nonprofit prove it has three x the subsidy in income? Could I have rejected them on the basis that their nonprofit was on social media asking for donations to cover our security deposit and asking for more repeating donations to cover there soon to be higher rent since that isn’t illegal and therefore a legal source of income? Question mark, what if the nonprofit has a religious base? So there’s a, there’s a, there’s
Andrew Schultz (00:38:21):
So many questions here. There’s,
Chelsea Kline (00:38:22):
I think there’s seven questions within that one. All I can
Andrew Schultz (00:38:26):
Make questions, I can make it real simple and just say, deny this application. I mean, it’s, it’s that straightforward. At the end of the day the applicant has not proven that they have the income to qualify for the apartment. And I would struggle to call this five oh five oh three c I think it’s probably 5 0 1 [inaudible] [inaudible] I would struggle to call this organization a organization that offers rental subsidy. It’s not like if you look here in Western New York, there are agencies outside of Section eight that offer rental subsidies, salvation Army, Catholic Charities women, women and children’s services. In like domestic violence type situations, there are agencies that provide assistance beyond just the Section eight agencies and Department of Social Services. But that’s the business that they’re in. This sounds to me like they set up a 5 0 1 [inaudible] [inaudible] for some reason. Whatever the reason is, I have no idea.
Andrew Schultz (00:39:29):
And it sounds like they’re basically trying to use this as a way to either hide income or, I’m trying to be very cautious with the words that I use here. It, I’m not gonna go too deep into this, but something stinks. And when you’re dealing with like this 5 0 1 [inaudible] [inaudible] or whatever the situation is, generally speaking, if it’s an agency that’s providing long-term housing support, there’s going to be paperwork that would go along with that. They’re going to want the landlord to do a W nine. They’re gonna want the landlord to sign some sort of a, an agreement that this company’s going to pay this amount on a monthly basis for these tenants. And realistically speaking, the agency should be engaged in long-term support. I’ve seen situations where perhaps a church or something like that will help subsidize someone’s rent. Generally speaking that’s short term for a month or two or helping with a security deposit or something like that. I don’t know of a lot of organizations that are not full-time in the business of providing housing assistance that are offering a situation. Kind of like what we’re talking about here. This just feels to me from top to bottom, like there’s some sort of a scam going on behind the scenes. Yeah, I would deny this application simply because the applicant can’t prove that they have sufficient income.
Andrew Schultz (00:40:55):
Let me look at this again. <Laugh> people start claiming relatives or GoFundMe will pay part of their rent as a rental subsidy. No, because that’s not verifiable income. It’s a lawful source of income. Getting money from someone else is a lawful source of income. But not, if it’s not consistent, I would just deny the application and move on. To be honest with you, I feel like this is one of those situations where someone’s just trying to find you. Yeah. I would say be cautious. I would tell Kimberly to follow every single rule when it comes to issuing out your adverse action letters and stuff like that, because this just feels like one of those type of situations where someone is trying to take advantage. Right. And I might be completely wrong, wouldn’t be the first time, but this reads to me like this reads to me like the start of a bad eviction case.
Chelsea Kline (00:41:48):
Yeah, no, for sure. All right. Onto the next one. We have a question from Kelly here. This is a, this is another longer one, so, so bear with me as I, as I read through, talk to me about credit scores for tenant screening. I have my first unit up for rent C class neighborhood. Every single person that has filled out my pre screener or Zillow application does not meet my credit score. Minimum six 40. I know I should stick to my requirements to avoid issues down the road. Is it even possible to find tenants with credit scores at six 40 or above in C class neighborhoods? Are they unit unicorns or should I have a lower credit score requirement? Would love to hear your thoughts and opinions. The property is in a low income classified neighborhood, but not part, but not part of the section eight program because I am hearing how bad our local offices to work with. Otherwise I’d absolutely consider accepting a voucher.
Speaker 3 (00:42:56):
For this one. So obviously credit scores are important to look at and everything, but what I would recommend here is looking at the report a little bit deeper and trying to understand, you know, why their score is the way it is. There’s a lot of factors that are taken in when configuring a a credit score. It could be things just, you know, how long of a credit history they have. You know, if they only have a couple years of history that could negatively impact their score, but they could have, you know, a perfect payment history for those three years. So I’d look a little deeper at the report and see what’s their payment history like, have they had any late payments, do they have anything in collections? Just trying to get a deeper understanding of that individual beyond just that number.
Andrew Schultz (00:43:44):
I actually sat in a lunch and learn session a couple weeks ago and the guy was talking about how credit works and things of that nature and he mentioned that there are 27 different criteria that can impact your credit score. Mm-Hmm. <affirmative> and payment history is one one of 27 criteria. So credit score can be impacted by so many different things and none of us know what the secret sauce is. Fair Isaac keeps that pretty close to the chest. Mm-Hmm. <affirmative>. The one thing I will say though is a good way to look at where you should have your criteria set is to look at other buildings in your area. So for instance, if you go look at the descriptions on apartments that are in the same neighborhood as yours and you see that they have a credit score requirement of 600, which is what we use for most of our buildings you may find that you do need to make adjustments to your criteria based on what you’re going to find in the area.
Andrew Schultz (00:44:40):
That said, if six 40 is the lowest that you possibly want to go, then you may just have a situation where you have to wait for the right person to come along. And that might wind up taking longer than you would hope. The one thing that I always tell my clients when we’re doing tenant placement is two things I always tell them is that tenant screening is a snapshot in time. There’s nothing that says that we don’t approve this tenant and they move in June 1st and June 2nd, they lose their job. Mm-Hmm. <Affirmative>. So tenant screening is a snapshot on time. And the other thing that I mentioned to them is that when you are screening tenants I would rather let your apartment sit vacant for an extra 30 days than put in a tenant that doesn’t meet our criteria because our criteria meet fair housing guidelines and our criteria lead to a low eviction rate.
Andrew Schultz (00:45:26):
So yes, it might suck to eat that extra month of vacancy, but I understand that the cost of a vacancy is a lot less than the cost of lost rents plus court costs, plus service of notice plus set out plus <laugh> turnover costs, blah blah blah, blah, blah, blah, blah, blah, blah. I would much rather let it sit for an extra 30 days than have to go than rush and put a bad tenet in. Cuz ultimately it’s, I’m the one eating that. I don’t wanna put a bad tenet in because at the end of the day I would rather not cause you more pain simply because we had to rush a process. So that’s what I always tell my clients is know your criteria. Once you’ve got your criteria, stick with them and just wait for that right person to come along because eventually they will. And actually, I guess it’s also worth mentioning if you have a building in a class C neighborhood, maybe your rent’s a little bit higher, maybe your credit score requirement’s a little bit higher than others in the same neighborhood, your unit has to justify that extra cost. So if you have the grossest unit on the block, but you want more than everybody else, it’s never gonna rent.
Chelsea Kline (00:46:30):
Yeah. Good. All right. On to the next one here. Question from Max lease with husband and wife expired a year ago After that they both signed an extension for a month to month and during the past year they separated. Now only one adult is in the house. Can I just have the one person sign the extension to continue month to month with the increased rent question mark?
Andrew Schultz (00:46:58):
I would not do it that way. I would actually,
Chelsea Kline (00:47:01):
Do you have to redo? Would you have to redo that agreement?
Andrew Schultz (00:47:04):
I would do a fresh lease anyway, to be honest with you. And typically we do fresh leases on a yearly basis anyway because we actually have our lease reviewed and updated by an attorney on a yearly basis. So generally speaking there’s language changes, so we want a fresh lease on every lease renewal anyway. That said in this particular instance you have a situation where there was house, a husband and a wife, there were potentially two incomes coming into that household. Correct. You may want to rescreen this application to make sure that the person who is still remaining in the home has sufficient income to cover the costs. Correct. If they broke up and split apart, you know, two months into the lease renewal and you’ve not had a single later missed payment or anything like that between then and now, maybe you can skip the, the re the rescreen. But realistically speaking, in a situation like this, you’re almost dealing with a brand new tenancy. So what I would probably do would be if one of the parties has moved out, you should probably try to get a signature from that party that they’re no longer living there. And really what I would like to do is get a new lease with just the people who are living in the unit on that lease. So it’s crystal clear as to who’s living there and who’s not.
Chelsea Kline (00:48:11):
Yeah. So I came across a question that was almost similar to this when I was looking through the Facebook group today, and it was very similar setup. I believe it was still a month to month, but it was a woman that had been living in the property who, or maybe it was a year lease, a woman that had been living in the property, but her son was going to move into the property with her and they were asking should they do an addendum to the current lease that was in play or should they do a completely new lease? And it looked like the son, there wasn’t an age on there, but it did seem like the sun was in their, either in their twenties or thirties mm-hmm. <Affirmative>. So yeah, they were asking just does it make sense to do an addendum? Should I, should I do a completely new lease? Like I guess you would kind of take into consideration some of those factors as well with the income, but mm-hmm. <Affirmative>, I guess maybe if you don’t know the age of, if you don’t know the age of the, of the son, it might be, you know, are they younger? I’m, I’m not
Andrew Schultz (00:49:08):
Sure. Yeah, I mean if they’re, if they’re under 18, they can’t sign the lease legally anyway, so they would just be considered an additional occupant. But if they’re over the age of 18 at that point I would say they should probably have a credit and background check run and be, be run through a screening process just the same as anybody else.
Chelsea Kline (00:49:23):
Yeah. And then you think it would matter, does it matter to do an addendum to that lease or just do a complete, you might as well just do a completely new one with at that point, right?
Andrew Schultz (00:49:31):
I is it the end of a lease term or what are they doing? I missed,
Chelsea Kline (00:49:33):
I think it was towards, again, I, I glossed over it. It, I think it was a coming up on the end. There may have been a couple more months left in the lease term.
Andrew Schultz (00:49:41):
I’d probably just do a new lease at that point.
Chelsea Kline (00:49:43):
Yeah.
Andrew Schultz (00:49:44):
Kind of the same thing we do. Like if we have somebody that’s sub-leasing an apartment out which doesn’t happen super frequently, but every once in a while if there’s less than six months in the lease term remaining, more often than not we want the person who’s going to be sub-leasing to just, let’s just sign a new 12 month lease. We’ll let the other person go. You can take over, you know, effective whatever date. And then that other person is kind of off the hook, they can move on with their life and we just have one tenant that we’re dealing with instead of the tenant and then the subtenant.
Chelsea Kline (00:50:15):
Yeah. Back in it was actually only a couple years ago before I had, I had my house, but back I had two buddies. There was one, one vacant room in this apartment they were renting and I needed, like, I needed one more year of living in an apartment and I, it was a cheaper option than getting my own place. So I ended up moving into this apartment in this, in the final room that was available. And we were three months out, they were three months out from finishing off their lease mm-hmm. <Affirmative> and, and rather than just making an addendum to the lease, the landlord just sent it up. We just rewrote, we rewrote the lease agreement and, and just said another year from that date and I was on the lease.
Andrew Schultz (00:50:54):
Well, and not for nothing from the landlord perspective, that’s the ultimate like, cuz now you know that you have a new lease for the next 12 months. Right. So that’s a really good situation. You know, you’re, you’re bringing your lease dates forward a little bit, but if you know that you have a lease that’s locked in for the next 12 months as a landlord, that’s not necessarily a bad position to be in.
Chelsea Kline (00:51:14):
No, and they, you know, they did all their due diligence too. They, they they did credit checks and income verifications. They, they did all that too to, to make sure I was, I was a good, good tenant. But yeah, they just ended up scrapping the last three months and well, redoing the lease to to be another year
Andrew Schultz (00:51:34):
Works out.
Chelsea Kline (00:51:35):
Yeah, for sure. Okay. we kind of already covered this one. We have, we had a question from Ronnie, just I’m gonna rephrase this a little bit, but Ronnie asked, what are the potential consequences for landlords of renting to tenants with in insufficient income? And I think really the, the model of today’s, today’s AMA has been make sure you’re checking income mm-hmm. <Affirmative>, but I think maybe the question, Andrew, if you have, maybe you have like a story or something of, of somebody getting burned because they haven’t, haven’t gone through with, with an income verification or, or anything like that.
Andrew Schultz (00:52:18):
I can’t think of anything specific tied to that necessarily. But I can tell you like anytime have a written set of criteria, whatever your criteria are, and there’s a million different places that you can figure out what your criteria should. We’ve talked about pretty much every criteria that I use in this, in this ama You could probably figure out my selection criteria just from, from watching this, but whatever your selection criteria are, make sure that you’re sticking to them. And when you have something I talked about income for instance, income used to be either a two points or a zero points on our scoring rubric if you will. And we realized that income can’t be part of the equation. Income needs to be either a, you meet this requirement or you don’t meet this requirement because it’s so critical, especially with rents going up that the income piece is in play.
Andrew Schultz (00:53:14):
Because without the income piece, none of the rest of it really matters. If somebody doesn’t have enough money on a monthly basis to pay the rent, they’re never going to be able to afford that apartment. So if you’re renting to someone that has $500 a month in income more than what your rent is, you’re evicting that tenant. I guarantee it. I guarantee it. That’s why we always harp on net income as another thing. A lot of people use gross income. They’re getting that pay stub looking at the top line number and just running with it. And you can’t use that top line number because there are so many things that can be deducted from your paycheck. Not even just your taxes and your insurances, but like I mentioned, alimony, child support. Trying to think of other things that can be pulled out. You could have money that’s being skimmed and moved to a savings account or something that’s used to pay back a, you know, a loan against a retirement account or something.
Andrew Schultz (00:54:07):
Like there are a lot of deductions that can come off as somebody’s gross income before they get to that net number. And if you’re not working from the net number, you’re not working with a true equation, you really don’t know how much that tenant has to work with, that applicant has to work with which can cost you thousands in evictions. So I guess as far as potential consequences, I would say the potential consequences you don’t get paid, which obviously nobody wants. And I think that the simplest way around that is to make sure that you’re doing your tenant screening the way that you should.
Chelsea Kline (00:54:36):
Right. Well that is, that’s good. All right. What do we got? 1 55? We probably got time for one more here. I’m gonna go, we just had one come through through the Facebook group here. And this one is a question from Katie. Question from Katie. I have a small situation I would like and this one’s not in the this one’s not in the deck. Gotcha. Andrews, this one’s gonna be off the, off the top here. I have a small situation I would like advice on. I have tenants in a home in Oregon who have a lease ending June 11th. They confirmed mid-April that they wanted to extend their lease another year, and I sent them a revised lease to fill out. They have not signed yet. They told me they have just been busy and need to review it. In addition, their rent is currently 10 days overdue. They advised it would be a little overdue as
Andrew Schultz (00:55:33):
You could stop right there. You could stop right there. Start the eviction. Is the answer to the question.
Chelsea Kline (00:55:38):
Go.
Andrew Schultz (00:55:39):
The answer to the question is to start the eviction. The
Chelsea Kline (00:55:40):
End, the end of the question is at this point, would you proceed with the eviction? Yeah. If they pay tomorrow and sign the lease renewals, should I also sign or serve them a 30 day notice?
Andrew Schultz (00:55:51):
So, all right, so we’re missing a little bit of information there on like what the tenant’s payment history is. Is it the first time they’ve been late or whatever the case may be. But from, honestly, from where I’m sitting, so here in the state of New York, the laws changed a couple years ago with how eviction process works and things like that. And essentially the tenant has up to the day of set out to bring their rent account current and completely disregard that eviction proceeding. So you can literally go through the court and get your eviction awarded to you and show up the morning of with the Marshall service for the set out. And if the tenant has certified funds or cash for the amount that’s due on their balance, you have to accept it and you have to set that eviction aside because of that, because the timeframe is so long, and also it’s taking longer than ever to get into courts.
Andrew Schultz (00:56:38):
So because the timeline is so long and because the tenant has so many options to stop the process at any time just by bringing their account current, we don’t delay on starting the process In New York. We have the five and the 14 day notice now that goes out as soon as rent is late. We’re starting that process as soon as rent is late because the ball is in the tenant’s court to bring their account current and stop the process at any time. It’s up to the tenant to do that. Yeah. Now going back to the situation with the outstanding lease in that kind of a situation, what is, they said that they presented the lease like mid-April and now the lease ends at the end of June.
Chelsea Kline (00:57:23):
Yeah, let’s see. They, I have tenants in a home in Oregon who have a lease ending in on June 11th. Mm-Hmm. <Affirmative>, they confirmed mid-April that they wanted to extend their lease another year, and I sent them the revised. Yeah. So they sent them the revised lease, it looks like mid-April.
Andrew Schultz (00:57:42):
Okay. I probably would not have waited that long, to be honest with you. And again, that boils down to the laws here in New York State, you have to give 30, 60 or 90 days notice depending on how long the tenant has lived in the property and things of that nature. So from where I’m sitting, it would be a situation where I would probably want to get that ball rolling sooner rather than later. If I presented you with a new lease and you haven’t signed it, I’m giving you termination of tenancy notice before that 30, 60 or 90 day timeframe begins. Again, doesn’t mean you can’t sign your lease and renew your lease for another year, but I need to do what I need to do on my end to make sure that at the end of the day, I can continue to operate the property the way that it needs to be operated. And if you’re not going to commit, you know, even if you tell me you need month to month mm-hmm. <Affirmative>, like, but if you’re not communicating at all, and if I’m sending paperwork and you’re ignoring it, you’re gonna get that, that termination a tendency notice and then it’s on you to step up and actually do what you need to do to make sure that you still maintain your apartment.
Chelsea Kline (00:58:40):
Yeah. So it does look like it looks like Katie she stated in here, I’m going to talk with them and an attorney tomorrow. This is the first time they have been late on the late to pay rent, but it does make me nervous about the lease renewal, so mm-hmm. <Affirmative>. Yeah.
Andrew Schultz (00:58:56):
Yeah. I mean, we, one late rent payment is not enough to stop us from renewing a lease. I think our, I think our criteria is now more than two. So if you’ve had more than two late rent payments in a 12 month period, at that point, I think you become eligible for non-renewal.
Chelsea Kline (00:59:14):
Yeah.
Andrew Schultz (00:59:16):
One, one late rent payment. We can even in our, hang on a second, let me pull my selection criteria up here while we’re, while we’re chatting. Let’s see. And even on my scoring criteria, one or two late rent or mortgage payments within a 12 month period. So yeah, we do, we do offer a little bit of a break that way. So if somebody does have a couple of late rent payments, it’s not gonna, it you, I understand that everybody has things that pop up. It’s happened to all of us. Sometimes you literally just forget to throw a check in the mail or something like that, one or two times in a 12 month period. Okay. Mm-hmm. <Affirmative>, if it’s more than that, now we have kind of a, you know, we have kind of a theme, if you will, A
Chelsea Kline (00:59:57):
Repeatable pattern. Yeah.
Andrew Schultz (00:59:58):
A pattern. Yeah. There we go. Yeah. Pattern was the word I was looking for. Pattern.
Chelsea Kline (01:00:01):
I gotcha. No, that, that makes sense. I
Andrew Schultz (01:00:05):
Think that’s it, but that’s where we would be at on that.
Chelsea Kline (01:00:08):
Cool. Well, it looks like we are at 2:00 PM Eastern. Perfect.
Andrew Schultz (01:00:13):
Okay. All right. Well, we’ll go ahead and wrap things up here today. Josh and Chelsea, thank you so much for joining me. I really appreciate it. These AMA sessions are always so much easier when we have good people on to join me. And honestly, Chelsea, the review that you did on the income verification report was fantastic. There’s a lot of data there. It’s a nice report to be able to pull, and that is one of the services that Rent Prep does offer as part of their tenant and screening packages. All of that information’s available over@rentprep.com. Either of you guys have anything that you want to pop in, you know, last notes here.
Speaker 3 (01:00:47):
No, thank you so much for having me on though.
Andrew Schultz (01:00:49):
Thank you for joining me.
Chelsea Kline (01:00:51):
I would say good job, Andrew, for getting it posted right to Facebook Facebook Live, so we aren’t 20 minutes, we aren’t turning minutes into the show, and we realized we didn’t have it going on Facebook.
Andrew Schultz (01:01:04):
I felt so bad about that last month. Yeah. But no, we’re good. This month I made sure that Facebook was going and it showed live before we even started doing the the broadcast. So we’re in good shape that way.
Chelsea Kline (01:01:14):
And I think we’ll do more of this kind of structure. I think last, last month we had Katie on who’s our senior screener to review a TransUnion full credit report. And then obviously we’ve got the income report Chelsea just reviewed. So I think you know, these, these guys are the experts. And, and this is I think this is valuable content. So hopefully, hopefully next month or the month after, we’ll we’ll get another rent prep screening team member on to, to review some more information or, or a tool.
Andrew Schultz (01:01:45):
Mm-Hmm. <affirmative>. Absolutely. Yeah. And actually, I’m gonna pull up the YouTube page real quick cause I feel like we should pimp some of our recent YouTube videos in case everybody’s <laugh> not aware. Gimme one second. I’m just gonna do a quick share screen here and we’ll do the rent prep YouTube page. And I’m gonna go ahead and close that. So actually, we had a video, the chat, G p t video. I am really, really happy with this one. If you guys haven’t had a chance to check this video out yet, let’s get a little bit different. That was a terrible, terrible thought point.
Chelsea Kline (01:02:19):
<Laugh> that starting face you had. Yeah.
Andrew Schultz (01:02:21):
If you guys haven’t had a chance to watch this video on chat G P T yet, l it’s so in interesting what, what AI can do in the landlording and property management space. I run through a listing description for a vacant apartment. I run through a handyman help, wanted add, I run through a driving for dollars letter, and then I think I had a noise complaint letter or something like that, that we did. It’s amazing what AI can do in the real estate space. There are a lot of people in the property management space that are talking about AI and what it can do and how it’s gonna change the industry. That video was literally a very, very surface scratch into what chat G p T can do. But if you guys haven’t had a chance to check that out, check that out over@rentprep.com. Nope. youtube.com/rent prep. Yes, youtube.com/rent prep. And there’s a ton of video content over there. We’re dropping a new video once every, every other week, I think.
Chelsea Kline (01:03:13):
Yes. Yep. We are. And then yeah, don’t forget e two. We’ve got, we’ve got the landlord form bundle. We’ve got, we’ve got that available on the rent prep site, which has over, I think it’s 62 forms mm-hmm. <Affirmative> that are common templates that landlords in any area can use. Now none of them are state specific, but you can, you know, in hand in hand you can use those forms with, you know, chat g p t, get them to customize what we already have built out. Mm-Hmm. <Affirmative>, there’s a million different things you can do. But yeah, check check the videos out. The YouTube videos have been really interesting lately for, for rep prep and obviously head on over to our site for more information on, on anything regarding tenant screening or even just landlord information.
Andrew Schultz (01:04:03):
Very cool. Thank you guys so much for joining me today. We’ll see you guys again next month for our June ama. I’m Andrew Schultz, for Chelsea and Josh and everyone over@rentprep.com. Thank you all so much for joining us and we’ll talk to you all soon.