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FIN 400 Chapter 7 Questions And Answers Latest Update
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FIN 400 Chapter 7 Questions And Answers Latest Update
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2024/2025FIN 400 Chapter 7 Questions And
Answers Latest Update
why i finding a good and happy tenant important ANS✔✔ -protect yourself and the property from
the very beginning. save you trouble in the future
-for residential properties, the state law is in favor of the tenant, so it is very important to identify
and avoid bad tenants from the beginning
-less turnover, and less operating cost
who is an ideal tenant ANS✔✔ always pays rent on time, never disturbs other or cause conflicts,
keeps the premises in good condition, happy to stay for a long time
step 1 select tenants - request rental application (residential) ANS✔✔ for residential rental
application for each and every occupant over 18 years old
step 1 select tenants - request rental application (commercial) ANS✔✔ -request from both the
institutional tenant and the owners or key officers of the institutional tenant
-the purpose is to seek personal guarantee from the owners or key officers, so that they are
personally liable for rental payment
-make sure the individual who signs a lease is the person authorized to do so
--->if the individual is not authorized, the lease is not binding
step 1: request rental application (cont) ANS✔✔ collecting an application fee and a credit check
fee
-->app fee is often refundable
-->credit check fee is often not refundable
, 2024/2025
requesting and photocopying a photo ID ANS✔✔ help verify the identity of an applicant
step 2 select tenants - check creditworthiness ANS✔✔ the three Cs of credit
capacity ANS✔✔ can the tenant pay the rent
-related to income
-for residential, check amount of income from current and past employers
-for commercial, check income statement
character ANS✔✔ will the tenant pay the rent
-for residential, this is related to consistency in employment history
collateral ANS✔✔ is the owner protected if the tenant does not pay the rent
-related to asset
-for residential, check bank or investment statements
-for commercial, check financial statements
the three Cs of credit ANS✔✔ capacity, character, collateral
character - residential ANS✔✔ check three things:
- pay record; from current and past landlord
- credit history; at three personal credit bureaus: equifax, experian, transunion
- credit scores; >=720: good tenants who always pay their bills on time, 620-720: considered to have
moderate credit risk, <620: high risk tenants
character - commercial ANS✔✔ related to number of times the tenant has relocated his or her
business
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