Finances And Your New Roommate
At what point do I ask for a credit check from a prospective roommate?
Credit check is done after you have sat down with the person in your house. They've already checked out your apartment, where the room you have for rent is. You would say you'll get a deposit from them - cash. You'll give them a receipt. You tell them that you will let them know if they are the right person after you've run the credit check. They've already come to your house; you already feel comfortable with them. You can't run a credit check on them before they've checked out your place, because they might not like it. You're wasting their time, and your time.
What kind of information can I expect from a credit report?
You are limited as to the amount of information you will be given on a credit check, because of privacy law - the new privacy law. One of the things that you might want to do is have the person run their own credit report, and bring it with them. That's one of the things you can ask - I want your latest credit report, and the latest being last week, or maybe a month ago, but not more than a month ago because they could have done all kinds of things in a month. Most landlords belong to a tenant/lord network, where they know if these people have filed for bankruptcy, or whether they have evictions on their record. The prospective roommates credit report should tell you that.
What if my roommate candidate can't pay their entire deposit?
If your roomate can't give you the entire deposit up front, that's a red flag financially. You can talk to this person and find out why they can't. If they've got a real, legitimate reason, you might go ahead and say, Okay, give me half now and give me half next month, with the stipulation that if they don't give you the other half next month, you give them a thirty day notice after which they have to leave.
Can I request to see bank statements?
That is getting too personal. You shouldn't need to, because your credit report that you've ran should tell you if this person is stable, and has good credit. I can't think of any reason why you would ask for the bank statement.
What is the best way to approach shared finances with your new roommate?
It depends on who you have. Some of the roommates don't want to share any of the expenses, such as food. If they don't want to share for paper products, they have got to buy their own toilet paper for the bathroom, and paper towels for the kitchen. I've never had a major problem about this. I'm up front about it. We share the utilities, and utilities include the housekeeper that comes once a month, a gardener. The utilities are divided equally, whether you use the cable or not, you're going to pay for it. Whether you use the housekeeper in your room, you're going to pay for it anyway. Don't try bargaining with me it's not going to happen - the utilities are set. They change every month. Sometimes they're practically nothing, in the summertime. Electricity and gas is way down, and water is way up. You're upfront - you've already said, We're sharing utilities - this is not a bargaining point.
How can I make sure my new roommate will uphold their financial obligations?
How do you enforce the rules? Hopefully you don't have to! Hopefully you have picked the right person, and they're mature and responsible. If they don't follow the rules, I had them sign a month-to-month agreement, and I give them a three day notice that you're going to cease-and-desist this activity. Let's say it's smoking for instance - if they don't, I give them a thirty day notice, and they're out of here. Period. No ifs, ands, or buts! Everybody signed this agreement, all of us in the household! It's not just me and the roommate, it's me, the roommate and the other roommate! It's a team, and you have to work together.
Should I use a financial tracking program to help us pay bills?
I have never felt the necessity for it because I am very conservative when it comes to finances, and I worked in a bank for fourteen years. I know how to handle finances. If you are sharing an apartment with four girls, and none of them are really up to date on how to do things, they might find it really helpful because it helps you track what you spend on utilities, food products, or paper products. You can put anything in them technically. I have Quicken on my computer - it is my financial program and I have never had a necessity to use it. One of these financial programs is listed on my website, under my roommate services.
What legal action can I take if my roommate refuses to pay the bills?
If your roommate refuses to pay the bills, and you've discussed it with them and they're still refusing, you give them an option. Tell them you're going to give them a 30-day written notice to leave, and that they have to leave in that period of time. This will not appear on their credit report. It's just between you and your roommate. But, if they don't leave after the 30-day notice, then you go to an eviction service and have them evicted through an eviction service. Their credit rating is now toast. This eviction is going to appear on their credit report. They won't be able to find another place to live. All landlords use these credit reports to see if you're going to be a good, reliable tenant.
