Would you rent to.......

[Ebbie]

Hello all,

I have a tenancy application for a near new IP. The tenant is an unemployed single mum receiving a weekly payment of $460 (I haven't been able to verify this yet). The asking rent is $240 per week and is in the mid to high range for the area with rents normally going for $150 - $260 p/w.

I've heard you should avoid renting to a tenant who is spending more than 30% of their net income on rent because they may be setting themselves up for a fall. In this case the tenant is quite happy to pay more than 50% of their income towards the rent! Is this realistic or unaffordable? It doesn't leave very much for other living expenses such as electricity, water usage, food etc.

Should I be the one to decide what the tenant can and can not afford? Especially if they have a good rental history from previous tenancies (in this case the tenant is only paying $150 currently so it will be a fair increase).

With the property being towards the higher end of the rental market for the area I didn't consider renting to an unemployed person as I didn't expect to see any applications. I don't want to discriminate against single non-working mums (even though a toddler and some of the quality fittings may mix very well ), and this person may turn out to be a good long term tenant.

I need to make a decision over the weekend so I thought I'd get some opinions and hopefully make it a bit easier!

 

[duncan_m]

Hello all,

I have a tenancy application for a near new IP. The tenant is an unemployed single mum receiving a weekly payment of $460 (I haven't been able to verify this yet). The asking rent is $240 per week and is in the mid to high range for the area with rents normally going for $150 - $260 p/w.

I've heard you should avoid renting to a tenant who is spending more than 30% of their net income on rent because they may be setting themselves up for a fall. In this case the tenant is quite happy to pay more than 50% of their income towards the rent! Is this realistic or unaffordable? It doesn't leave very much for other living expenses such as electricity, water usage, food etc.

Should I be the one to decide what the tenant can and can not afford? Especially if they have a good rental history from previous tenancies (in this case the tenant is only paying $150 currently so it will be a fair increase).

With the property being towards the higher end of the rental market for the area I didn't consider renting to an unemployed person as I didn't expect to see any applications. I don't want to discriminate against single non-working mums (even though a toddler and some of the quality fittings may mix very well ), and this person may turn out to be a good long term tenant.

I need to make a decision over the weekend so I thought I'd get some opinions and hopefully make it a bit easier!

"No" is my immediate reaction. But if she had solid, verifiable references showing a good history at a similar rent I'd be happy to rent to her. Perhaps she's receiving Child Support Payments from Dad?

 

[Ruby]

Does the $460 include Rent Assistance? That could make all the difference.

I wouldn't tend to discount her straight away until I had some further information.

http://www.centrelink.gov.au/internet/internet.nsf/payments/pay_how_ra.htm

Ruby

 

[Simon]

Some landlords I know swear by single mums. They feel they are the most reliable of all tenants.

All the best,

 

[duncan_m]

Some landlords I know swear by single mums. They feel they are the most reliable of all tenants.

All the best,

I'm in that camp : http://www.somersoft.com/forums/showthread.php?t=17714&highlight=single+mums+love


Older Single Mums are just great.. stable and reliable.

 

[Bill.L]

Hi all,

A couple of years ago we had 5 applications for a property within a couple of days. Sorting through them we rejected the single mums and went with the young family with the stable employment history and good references.
A few months later, after going through all the right channels to evict them for non payment of rent, we learnt of the drug dependancy.

When we reletted the property, there was not the same number of applications and we rented to a single mum. She has been there ever since.
apart from the usual maintenance issues (hot water playing up etc) there has been no problems. Occasionally she gets a little behind in the rent, but then catches up (I think with help from her wider family).

The rent for this property is lower than what you are asking (at $195 pw) so this could make a difference.

 

[geoffw]

That's a big percentage- I'd be careful at that level.

If you do accept her, get the rent deducted from her Centrelink payment, if that's possible

 

[Roger]

Hi Ebbie,

I have had a single mum for a tenant for the last 18 months. The rent is $220 p/w. Four months ago for the first time she missed rental payment. The agency was great and followed her up promptly. She paid the back payment and she has been on time since then. Now I just make sure I keep and eye on the payments so it is not delayed. Also, as a single mum she does have difficulty looking after the gardens and needs to be reminded to cut the lawn.

Having said this, she has been in the property for over 18 months with no major problems.

Cheers,
Roger.

 

[Kristine..]

Ebbie

It's all about the individual.

I have a single mother paying $370 per week, been there two years, very houseproud, this is a big exec house and I provide a gardener for pruning and the heavy garden work. She directs him and she mows the grass when she gets around to it.

I leave her alone, I would never dream of 'reminding' her to mow the grass. That's a bit like 'reminding' someone to do the dishes. It's her home and her standards are how she likes to live. She and her children are happy there, the rent is paid on time and I am sure she will be there for many years as the children go to local (private) school.

It's none of my business how she pays the rent or what arrangement she has with her ex-husband. Her references were impeccable and she has lived up to her reputation.

On the other hand, my daughter accepted a much older single mother who was nothing but trouble. Paid the bond and the first month's rent in advance as required but after that it was an endless bun fight. That was for a much cheaper property at $165 per week.

As with everything in life, we can do all the reference checking and due diligence we like, but at the end it is all still a leap of faith.

Good luck

Kristine

 

[Patosan]

G'day Ebbie,

One of my IP had a family which turned into a single mum situation.
The rent is 260pw ... was vey concerned initially but all has been well thus far.

It's great to read others' posts as I would've initially thought single mums a riskier proposition ... this would not seem to be the case.

 

[willair]

Eddie,
i rent one of our properties out to a single Dad, he has a 8 year old son
plus i think he has been on the unemployment set up for 6 years,
the rental payment comes out of his payments each 2 weeks so far
in the past 6 years its never been a problem, but on the other hand
i have rented to a well to do Barrister whos idea of payment
was to slam the door in your face,not everything is always as it
seems up front.
good luck
willair..

 

[geoffw]

A lot of people have covered the reliability of single Mums and Dads as tenants. But my very big concern is the amount of rent being paid. My PM will not, as a rule, allow a rent above 30% of income. The 50% mentioned by Ebbie is very high. If there was rent assistance, I'd still make sure that she doesn't have to contribute much above that 30% level out of her non rent assistance income.

 

[ggumpshots]

Why is she renting near the extreame of the rental range.
This really concerns me. This person is living way beyond their means if they are unemployed
Is she contemplasting work in the near future.
If she has an unexpected expense.....eg car acciden, replace a fridge, medical operation will this impact on her abilty to keep payng rent?
Prior references are good so keep that in mind
I would likely decline the application unless the market is dead

 

[Ebbie]

Why is she renting near the extreame of the rental range.
This really concerns me. This person is living way beyond there means if they are unemployed
Is she contemplasting work in the near future.
If she has an unexpected expense.....eg car acciden, replace a fridge, medical operation will this impact on her abilty to keep payng rent?
Prior references are good so keep that in mind
I would likely decline the application unless the market is dead

Thanks everyone for some very interesting replies.

Unfortunately I don't know the answer to the above questions.

Ruby, I rang Centrelink and the $460 appears to include rental assistance.

As geoffw and ggumpshots suggested, the main thing concerning me now isn't so much the reliability of single mums (I've looked into Centrepay and I think it is a great idea and I'd be putting that in place if I accepted her application) - it's more the 'living beyond her means' and the percentage of income going towards rent. If there were any unexpected expenses like ggumpshots mentioned above it wouldn't take a lot for her to suffer "financial hardship" and I can see the odds being against me if I had to go to the Tribunal. Greedy 'rich' landlord VS poor single mum!

geoffw, I'm inclined to stick with your PM's rule of 30%. I'm comfortable with this and at least I won't feel like I'm allowing someone to get in over their head.

After reading some of the responses in this discussion I'd be quite happy to rent to a single mum - but in a lower rental range. Fortunately I have a few tenants lined up for an open inspection tomorrow. Now for the part I hate and delivering the bad news......

 

[Bill.L]

Hi all,

Ebbie,

"Now for the part I hate and delivering the bad news...... "

That's one of the reasons why you have a goood PM

bye

 

[crest133]

Hi Ebbie
A good PM should look at all the circumstances before making a decision to accept or decline an application. Some info is missing from your post like :
* why is she moving ?
* why is she willing to increase her rent so much ?
* does she have income from any other source, if so, how much ?
* check her bank statements, any surplus after paying $150 pw ?

Without the extra info, which would need to be all positive, it would appear on the info provided to be too risky to accept her application due to the rent being such a high percentage of income. Xmas is approaching too, always a drain on tenants' resources.

good luck.
cheers
crest133

 

[Ebbie]

That's one of the reasons why you have a goood PM

From experience with local real estate agents I am yet to be convinced this sort of creature exists. I was forced to withdraw the property from a previous PM so will continue self managing.

 

[crest133]

From experience with local real estate agents I am yet to be convinced this sort of creature exists. I was forced to withdraw the property from a previous PM so will continue self managing.

True Ebbie, while there are some good ones, there sure are some very ordinary ones out there too.
e.g. I was awaiting the end of a long settlement, and the purchaser asked me to put a tenant into the property. I was awaiting some indemnity paperwork from the purchaser to avoid settlement delays in case a tenancy went bad, and awaiting the agency agreement and I also required vetting rights over any tenancy application with the REA's PM. Next thing I hear a tenant has moved in. No signed agency agreement in place, & I hadn't vetted the tenant. Double eek
I had the tenant removed from the property immediately by the REA. The tenant was a total dud, weakest dodgiest application you've ever seen. The PM had to remove the tenant and make apologies for the REA not having any authority to approve the application, or sign a lease or handle the property in any way. Could've been very hot water for the REA if the tenant had decided to sue them. Biggest name agency, sales dept was great, but the PM was a liability. Anybody could've done it better.
cheers
crest133

 

[ggumpshots]

From experience with local real estate agents I am yet to be convinced this sort of creature exists. I was forced to withdraw the property from a previous PM so will continue self managing.

The ownwers of REA tend to be .......in a word ........great.
it is the PM /staff that drop the ball. Just so you dont give up hope Ebbie, I met one of these creatures back in 1989...so dont give up!!!!!!!!!!!!!!

 

[kathryn d]

A lot of people have covered the reliability of single Mums and Dads as tenants. But my very big concern is the amount of rent being paid. My PM will not, as a rule, allow a rent above 30% of income. The 50% mentioned by Ebbie is very high. If there was rent assistance, I'd still make sure that she doesn't have to contribute much above that 30% level out of her non rent assistance income.

I have to disagree. I don't think it is our place to say what a tenant can and cannot afford. This is probably because in my younger years I had bank managers saying the same thing to me when it came to getting a mortgage on my house.I wanted the higher payment at reduced years where they wanted me to take the loan for longer at a reduced payment. My lifestyle was and still is frugal.
I look at our own tenants and think to myself,what you are paying me for rent, you could be paying for something that is yours. I don't understand the mentality of renters.