monthly fee marginal app
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monthly fee marginal app (by David [MI]) Oct 15, 2020 5:57 PM
       monthly fee marginal app (by S i d [MO]) Oct 16, 2020 8:03 AM
       monthly fee marginal app (by David [MI]) Oct 16, 2020 8:28 AM
       monthly fee marginal app (by 6x6 [TN]) Oct 16, 2020 9:14 AM
       monthly fee marginal app (by David [MI]) Oct 16, 2020 9:29 AM
       monthly fee marginal app (by 6x6 [TN]) Oct 16, 2020 1:34 PM
       monthly fee marginal app (by BRAD 20,000 [IN]) Oct 17, 2020 1:52 AM
       monthly fee marginal app (by David [MI]) Oct 17, 2020 8:55 AM
       monthly fee marginal app (by BRAD 20,000 [IN]) Oct 17, 2020 10:35 AM

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monthly fee marginal app (by David [MI]) Posted on: Oct 15, 2020 5:57 PM
Message:

First, I want to thank the poster who, a while back, started a thread asking if they could advertise different rental rates based on credit score. I don't remember who you are so apologies that I can't thank you by name. I thought it was easily comparable to how car loans and mortgages are advertised "offer requires A-tier credit , not all buyers qualify, blah blah" but most LLs here didn't find it workable

Generally if an application is marginal and right above the accept criteria, most LL will charge higher deposit. I always charge my state max, 1.5 months for two reasons

1) to protect myself from damage and lost rent

2) I use it as a screening tool to make sure applicants have 2.5 months cash on hand

So I don't have the option to charge a higher deposit. I could only ACCEPT or DENY. Now what? Well, thanks to that posters suggestion, I came up with the following FEE

If a tenant just barely meets my criteria, I charge them a monthly fee of $50. Based on what other LLs here have mentioned as part of their criteria , these could be reasons why they would charge this fee:

- none of the applicants meet income req individually, only when combined

- applicants have not lived/rented together

- applicants have not rented before

- applicant rental history not verifiable due to sold prop/change of mgt/owner not reachable etc . but no evictions on court records

- applicant has been at current job less than 1yr

I used it for the first time a few months back. Applicants were in their early 20s, two brothers and a friend. They had excellent credit scores, full time jobs, but not enough rental history. I told them their "applications are conditionally approved, subject to $50 monthly fee for insufficient rental history". They were ok with it and have paid ontime since, no trouble. --50.4.xxx.x




monthly fee marginal app (by S i d [MO]) Posted on: Oct 16, 2020 8:03 AM
Message:

Interesting thought. I like the creativity behind it.

My concerns are probably things you've already considered, but I'll list a few anyway in case a new investor see this and thinks about trying it.

1) Concise, clear, upfront, WRITTEN definition of to whom this applies, so as to avoid any APPEARANCE of discrimination or false advertising. You have a good list of criteria started.

2) Is the added fee perpetual? For example, After a year, does the extra rent drop off? Do you have to reverify their status to see if they've job hopped or stayed for 1 year? Would their year of solid rental history with you be sufficient to make the rent go down?

The Government, in their effort to "help" people, has made things more difficult in some ways. Fortunately, in Missouri I can have up to 2x the monthly rent as deposit, and honestly that's about as much as I would ever consider as a "Safeguard" since I already screen diligently. Anyone who requires more than that probably should be a "NO GO".

One problem, though, is when people want to pay rent in advance: does that count toward the max deposit? My thought is it does not, and I haven't seen anything in the state LL/T laws indicating it does. Still, it's a gray area. I wish Govt would treat us like adult who can figure things out for ourselves. Security deposits are not a terribly complex issue: a tenant either has the money and wants to pay it, or he doesn't have the money or doesn't want to pay it and can go rent from someone else. There are no LL cartels keeping poor folks from renting by insisting on security deposits equal to 5x the rent! The law was made for a problem that doesn't exist.

Anyway, good luck with it. I'd like to hear you follow up with us here on how it goes! --107.216.xxx.xxx




monthly fee marginal app (by David [MI]) Posted on: Oct 16, 2020 8:28 AM
Message:

Sid 1) is easy. The LL's criteria does NOT change. merely if the applicant is right at that line (or maybe a teeny tad below it). I gave some examples of LL criteria that might not be a true autoreject.

Then instead of saying "Due to (specific problem) on your application, we are not able to approve", all you have to say is "Due to (specific problem) on your application, we can only approve your application conditionally with an additional fee of $50 a month"

2) cmon Sid, I know you better than this. Their rent will not "go down" after a year, it will simply stay the same and not go up!

We can discuss security deposit laws and prepaid rents until the cows come home, but the difference is that you're not supposed (wink) to make profit from those. But you do make profit from fees. --50.4.xxx.x




monthly fee marginal app (by 6x6 [TN]) Posted on: Oct 16, 2020 9:14 AM
Message:

Thank you for sharing this David.

After reading Sid's response I was going to suggest that the rent would not be reduced gut just not increase after a year but then you mentioned it.

Is there anything written anywhere on you add or a pre-screening form or app in regards to the fee and any stipulations?

Sid has a point about the discrimination appearance if it is not written down. --73.120.xx.xxx




monthly fee marginal app (by David [MI]) Posted on: Oct 16, 2020 9:29 AM
Message:

6x6

I have specific written criteria, both phone screening and application screening. I do NOT make it public, either on the ad or on the app.

I don't really care if an applicant cries discrimination. I can point to a reasonable problem with their application. If they complain about the FEE then I just say, too bad, "Your application is denied due to (specific problem) " --50.4.xxx.x




monthly fee marginal app (by 6x6 [TN]) Posted on: Oct 16, 2020 1:34 PM
Message:

Thank you David. --73.120.xx.xxx




monthly fee marginal app (by BRAD 20,000 [IN]) Posted on: Oct 17, 2020 1:52 AM
Message:

I like the concept but MY Fair Housing office would eat your lunch AND dinner.

They have no sense of humor or flexibility. EVERYONE gets the same criteria (better be able to prove it) and the same price.

I'm not worried about the res crying discrimination - they got the home. It's the others, SJWs, and the FH office who would cause a ruckus...that I get to pay for.

BRAD --73.102.xxx.xxx




monthly fee marginal app (by David [MI]) Posted on: Oct 17, 2020 8:55 AM
Message:

Brad, simple solution. Don't advertise this fee in your ad and app. Then the only people who will know about are the tenants who the fee applies to (don't even need to tell well-qualified tenants that don't pay the fee) --50.4.xxx.x




monthly fee marginal app (by BRAD 20,000 [IN]) Posted on: Oct 17, 2020 10:35 AM
Message:

I'm not against the concept but it needs refinement to comply with the law.

Maybe the way to do it IS to publicize it - make it available for everyone.

Banks do it. Our rate depends on our credit score.

We can also pay extra (points) for a better rate.

So they have found a way to do it. Let's find a legit way.

Fair Housing law is about what we DO. What we SAY or advertise is just a part of what we do.

Giving one person a deal or letting them slide past the rules we hold over other people is discrimination.

And people talk. My renters will complain to their friends and someone will declare "He can't do that! Report his ___ to Fair Housing!".

BRAD

--73.102.xxx.xxx



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