What To Do When Elon Musk & Bill Gates Both Apply for Your Nice Rental House

In this month’s edition, we have a riveting property management fairy tale!  Once upon a time in a nice, far-off place called “Charlotte, NC”, a nice landlord put a nice, vacant rental house on the market.  Now the market was not too hot, not too cold, but just right… 

 

The next day, a nice rental application was submitted for it.  And the day after that, another nice rental application was submitted.  The nice landlord dutifully ran the applications and found that both applicants looked to be fully qualified:

 

Tenant #1:

Elon Musk

802 credit score

Criminal record: 3 traffic tickets in last 3 years

Employed: CEO of X, SpaceX, & Tesla, Inc.

$221.4B net worth

Homeowner: no recent personal landlord history

No pets

Move-in date: 35 days from today

Length of lease desired: 2 years

 

Tenant #2:

William (“Bill”) Gates III

814 credit score

Criminal record: None

Employed: CEO of Bill & Melinda Gates Foundation

$127.3B net worth

Homeowner: no recent personal landlord history

Pets: 1 cat (10 pounds) & 1 border collie (60 pounds)- aware of non-refundable pet fees

Move-in date: immediate upon acceptance

Length of lease desired: 1 year

 

The nice landlord has a very nice problem!  Two well-heeled applicants want his rental property.  They have 800+ credit scores, no criminal background issues, plenty of income, and no landlord issues.  That is great!

 

But outside of the nice fairy tale, is it really great?  How would a regular landlord pick a winner and a loser?  He may have to be not so nice?

 

The Musk application has many positive aspects with it having no pets and wanting to lock into the property longer with a 2-year lease request.  But there is a 35-day wait for occupancy (each vacant day costs money!) and there is a criminal record (frequent speeding tickets can signal risky behavior).

 

On the other hand, Gates wants to move in right away (cha-ching!) and has a higher credit score than Musk.  But he does have a lower net worth and who knows the damage the 2 pets could do to the house especially if he leaves after the initial lease ends.

 

So under normal circumstances and with no one else involved, both tenants would easily be approved for the property.  But there is only one home.  And they probably don’t want to share it.  So what to do?

 

It’s a tough one and it happens every so often.  Unfortunately, the non-approved person usually gets upset.  But a decision has to be made. 

 

I don’t think there is perfect methodology for this.  Some landlords use tactics such as:

 

1. First application in gets first dibs on the house: I like this one due to its simplicity and it seems to have the “get in line” logic that most adults can appreciate.  Its major flaw is that a property manager really needs to pick the best available applicant for the owner client, regardless of who was first.  If a marginal candidate applied first and then Bill Gates submitted an application, should I be married to the marginal candidate?  I don’t think so.
2. Make the applicants give their “highest & best” offer: The rent is listed at $2K/month.  “How much rent are you willing to pay if we let you have the house- $2,500/month?  Will you sign a 3-year lease?  Move-in right away?”  We’ve done this on occasion and it’s a lot of effort and most people don’t want to play (I’m not sure I would either).  Due to the bad feelings it creates, I largely tend to shy away from doing this.
3. Have some sort of points system based on all quantifiable application information.  Add up the points and whoever has the highest score wins the house.  This does not take into account any non-quantifiable information (or “soft skills” for lack of a better term) which tend to matter a lot with tenant relations.

 

Trying to make a choice between great tenants can be a good problem to have if handled properly (in and out of fantasyland).  But I think I’d go with Musk application on this one.  It’s very nice!

 

Happy Landlording!