Let Me Count the Ways- an in depth look at our resident selection criteria

Experienced landlords have a perspicacity honed over years of interviewing potential tenants. Ill-fated choices will result in uncollectable rent, high tenant turnover, trashed homes, and nuisance phone calls. Lack of discernment makes landlording a costly and frustrating venture.

While there’s no substitute for experience, we endeavored to systematize this intuition. We developed an applicant rating form, so even a new person on our team can quickly assess the potential for success of a prospective resident. Like any good system, when applied consistently, this standard can be measured, evaluated, and improved over time.

We sell our homes, so we want the applicant to eventually own their home free and clear. Since most of our applicants have blemished credit, our applicant rating form looks at other factors to assess their ability to succeed in this contractual relationship. The applicant rating form is a scorecard, each criterion is assigned a weighted numerical value. The applicant is rated based upon how well they fulfill the criteria.

Most of the information needed is gleaned from the resident application form. The first step is to verify the information provided on the application. A copy of each adult applicant’s driver license and social security card proves identity. Copies of recent pay stubs or W2 satisfy proof of income. Phone calls may be made to employers, previous landlords, references, and creditors for verification.

Ideally, we want an applicant to be currently paying rent slightly greater than what their total payment (note plus lot fee) will be on the home they’ve selected. When this is the case, we assign 4 points. If their current rent is equal to what their payment to us will be, they receive 3 points. Fewer points are assigned if their new payment will be higher than their current rent. If they are living with friends or family, 0 points are given. Folks who aren’t accustomed to handling the responsibility of paying rent will have the opportunity to learn with another landlord. We don’t want to be their first.

A person’s ability to pay rent is severely compromised when they’re unemployed. So demonstration of their ability to hold a job is important. Length of time on current and former job is rated and carries significant weight. Permanent fixed income, like social security or disability is given the maximum number of points.

Resident turnover is detrimental to both the fabric of the community and the bottom line. While we don’t expect everyone who signs a 15 year note to pay it off, buying a home from us is a long term commitment and we want folks to treat it with more seriousness than an apartment lease. Therefore, we rate length of time at their current and previous address.

If the home is being purchased based on two incomes, we are interested in assessing the stability of the relationship. Most of the time when a breakup occurs, the individual left behind cannot afford to keep the home. We view couples that have been together for a long time less risky than fiancées. Single people who aren’t depending on another adult’s financial contribution are also lower risk. Its important to know local laws, in some states it is illegal to discriminate based on marital status.

The previous landlord is interviewed and points are assigned based on the answers given to questions like: how many times they paid late in the past year, were there any suspicious activities, were they quiet, did they maintain a clean place, were they cooperative tenants. In some cases, a home visit is scheduled.

The character of a community is a major consideration for most people when choosing where to live. Our motto is, good housing for good folks. Applicants with a history of violent crimes or drug offenses are automatically disqualified. Other felonies are assessed a major point penalty. Misdemeanor offenses are penalized to a lesser extent. Points are granted for having a perfectly clean record.

After assessing all these variables, the points are added up. If the point total exceeds our threshold, the applicant moves on to the next step in our selection process. A meeting of the Resident Selection Committee is convened as the final step in the process. Upon their recommendation, the applicant signs on the dotted line, and becomes a resident of Madison Woods.

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