Everyone deserves a second chance. Maybe not always a third and fourth opportunity, but people make mistakes or forces beyond their control wreak havoc on their lives and soon the financial dominoes begin to fall. As a real estate investor, should you consider renting to someone with ahelping those who need help “checkered” past?

The first response might very well be, “No, why put me in that situation?” and that would the correct call. But sometimes a property is marketed to rent for too long. You can lower the rent but if the rent is lower than your mortgage payment and associated expenses it becomes a monthly liability instead of a profit center.  But what if someone wants to rent from you but has poor credit?

Bad things happen to good people all the time. That’s just the way life goes. If you pull a credit report and there are current or recent negative items, find out why. And not only find out why but document the reasons. For example, someone has been paying rent on time every time for a few years then gets laid off. The rent is still being paid from savings but soon that runs out too. The renter pays the rent first and credit card second. What can that tell you?

By reviewing a credit report and asking as few questions you can determine exactly when the potential renter was laid off. That’s easily discovered with evidence from the renter, either by a layoff notice or unemployment checks. Now compare the layoff date with the negative credit. If the layoff occurred well before the late payments and good credit was established well before the unemployment event, then you may have a candidate. If the renter has found another full time job in a similar line of work, you may have just found someone who has had bad things happen to them and needs another shot.