I’m Bob Cain, and I discriminate. Yes, I do. I am a habitual discriminator. I am also biased, and I show my bias daily, maybe even hourly. I am proud of that. It is good business.
I bet you discriminate, too. I would also venture to guess that you are biased, probably in many of the same ways I am.
Since this is a column about rental property management, here are my discrimination targets in rental property.
I discriminate, and I am biased. It’s good business. But what you will notice as you read this article is that none of the ways I discriminate has anything to do with race, religion, color, national origin, sex, familial status, handicap or any other way in which someone might become a legally protected class. It doesn’t matter a whit to me the color of someone’s skin or his or her religion, national origin, or any of those other things. What matters to me are the criteria I use to discriminate. Those are both legal and good business practice.
Above all else, I discriminate against bad tenants. Those are the people who have demonstrated that they don’t deserve to live in anyone’s rental property. They come in various gradations of “bad,” but the most egregious of them don’t pay rent on time or at all, are bad neighbors who have no consideration about getting along or acting considerately of the people who live around them, and take poor care of their homes, leaving trash, damaging fixtures, and apparently believing that cleanliness is inconvenient.
I eagerly discriminate against them. Those people have a history of bad behavior that disqualifies them from renting.
Related: The Five Keys to Tenant Screening
I also discriminate against people who don’t believe that timely rent payment is imperative. They might fall under the heading of “bad tenant,” but they deserve a special category because they might be and often are nice people who get along with the neighbors and take good care of their homes. They just can’t seem to manage money well. They always have an excuse why they don’t or can’t pay the rent.
Several years ago, one of my readers invited me to watch a sheriff’s deputy serve an eviction order on a tenant who could never manage to pay the rent, often at all. The rental unit was spotless. This tenant had planted flowers in the front flower bed and the unit looked charming and well-maintained. The floors were clean, swept and vacuumed. The stove and refrigerator looked as if they had never been used. That was possibly the case because this woman got all of her meals from McDonald’s. She may not have even known how to cook.
That money that could have gone to pay the rent went to McDonald’s and buying flowers for the front yard instead. She lacked a sense of priority about the rent coming first. It’s good business to discriminate against people who don’t pay the rent because if we don’t have rent, we don’t have a business.
Third, I discriminate against people who don’t earn enough money to pay the rent. Every property is different, but as landlords, we can use historical models to determine sufficient income to rent a specific property. The obvious first choice to discriminate against is the person who doesn’t have a job or any other source of verifiable income. That ought to be the first thing we look at on a rental application or require in our rental policies and standards, verifiable source of income.
They also must have sufficient income. That means their monthly income is enough not only to pay the rent but also to pay utilities, buy food, make car and credit card payments, and pay any other monthly bills that could affect having enough money to pay the rent.
A corollary is adequate time receiving that verifiable income. Last hired, first fired. Someone who has had a job only a couple of months is more likely to lose that job than the person who has worked somewhere three years. Public assistance and disability payments are likely to be stable, but maybe not. They can go away for a variety of reasons. It is up to the applicant to prove that income is stable and dependable, not up to us to prove it isn’t. If income is undependable, it can disappear overnight and the tenant can end up with insufficient income. It is good business to discriminate against people whose income is unverifiable, insufficient, or unstable. No or spotty income means we lose our businesses.
Related: Finding the Right Tenants, One Reason to Hire a Property Manager
Both good tenants and bad tenants come in all colors, races, creeds, religions and all those other criteria. Our job is to concentrate of what makes a tenant someone who will be a good tenant, not some irrelevant condition such as the color of his or her skin.