First of all, remember, that most of your competition are not in ideal situations either. Let's face it, people in ideal financial situations usually are homeowners and are not looking to rent. In the current economy, most prospective renters have some combination of a bankruptcy, foreclosure, bad credit, poor rental history or employment issues. So don't worry but there are some things you can keep in mind that will give you a competitive advantage.
1. Income (you will usually need at least 2.5 times the amount of the rent)
2. Stability and logevity of employment. If you have been on the same job for a
number of years this is an area that will stand out for you.
3. Favorable credit history prior to bankruptcy and after bankruptcy
4. Bankruptcy has been discharged
5. The landlord will most likely pull your credit report. You will want your current monthly obligations to be as little as possible. This will look good in two ways. First, it will make your debt to income ration lower, thus making it look like like you are able to afford the rent more easily. Secondly, running up debt immediately after a bankruptcy might show a potential landlord that you are headed back down the same road to financial difficulty. 6. Extra cash on hand for an increased deposit
7. Solid references
If you have everything on this list in your favor, you are not going to have any problem. That is not to say that you won't come across a property manager who simply will not rent to you because of your bankruptcy. Logically though, if most or all of your debts have been discharged in your bankruptcy and your income is solid, you will probably be viewed as a pretty low risk by the property manager or owner.
If you have some of the above items that are not in your favor or if you are getting some resistance on a specific property you would really like to rent, I suggest the following:
1. Try to meet in person with the property manager or owner. It much easier for him/her to feel comfortable with you and much more difficult to say no in person.
2. Be prepared to present all of the positives of your current situation.
3. Be prepared to offer an increased security deposit.
Be sure to bring up your bankruptcy in your first conversation with a property manager or owner. Make it clear that you are willing to provide any information about your bankruptcy and be perfectly honest and up front about your situation. This will be extremely important if you bankruptcy has not been discharged yet. You volunteering this information up front will help to build a level of trust with the property manager or owner. If your bankruptcy was due to a one time circumstance, make sure that the landlord or property manager is clearly made aware of that. If the bankruptcy was do to irresponsible financial behavior, be prepared to explain with specifics how you have made changes to how you approach and live your financial life.
In the process of going through foreclosure as part of your bankruptcy?
This is where some strategy and good planning is in order.
1. Stay in your house as long as possible. Who knows how long the bank will take to getting around to taking back your house. Even after a Notice of Default the bank can easily take over a year to take back possession of your home. Don't bail too soon. Stay as long as you can payment free!
2. Stockpile cash. When renting after a bankruptcy, it will not hurt you to have a war chest of cash in reserve. If you encounter problems renting a place you really, really want, an increased deposit or an offer to prepay a couple of months rent in advance might be the clincher for you.
- Be smart, organized and prepared and you will be moving into your new place in no time.