Sometimes, life just happens, and you find yourself dealing with a bankruptcy. Even so, you still need a roof above your head and a place to live. The question now is, can you rent a house after filing bankruptcy in Texas? Landlords can reject applications because of a bankruptcy here, but you still have ways to prove you can pay the rent, like proof of income, offering to give a bigger security deposit, and other techniques. Renting after a bankruptcy is possible. Read below to learn more.
Key Takeaways
- Bankruptcy affects–but doesn’t eliminate–your chances of renting in Texas. Landlords can reject you because of a bankruptcy here (with some exceptions), but many landlords and property managers look at more than just your bankruptcy when assessing your ability to pay the rent.
- Tenants renting after a bankruptcy can strengthen their applications by providing proof of steady income, offering larger security deposits, getting co-signers or guarantors, and more.
Can You Rent a House after Filing Bankruptcy?
As Austin property managers, we’ll tell you that, yes, you can still typically rent after a bankruptcy in Texas, however some landlords may reject you because of it.
To be more specific, although some state and local Fair Housing Laws list source of income as a protected class, Texas does not. Because of this, a landlord in Texas can lawfully reject your application because of a bankruptcy. The only times they cannot do this are if they are using bankruptcies as a pretext to discriminate against you because of a protected class you belong to, or if you’re seeking public housing assistance.
Besides that, when you apply for a rental, landlords will typically have criteria regarding your income and credit history. In turn, if they look at those factors, that will involve finding a record of your bankruptcy for years. That said, landlords are legally mandated by Texas Property Code 92.3515 to explain their criteria upfront before they accept your application fee. So, you can see upfront what boxes you’d have to check to meet the landlord’s standards for renting.
But as we’ve mentioned earlier, filing for bankruptcy in Texas does not necessarily mean you will get rejected everywhere. Do not lose hope. Yes, some landlords do use it as the deciding factor. However, for many other landlords (and especially property managers), bankruptcy is only one of the factors they look at. They typically also look at your current income, your rental history, your employment situation, and other factors. In the end, what they want to see is that you are able to consistently pay the rent, so you should strive to show that you can do that.
What is It Like to Rent after a Bankruptcy with Private Landlords vs Property Management Companies?
We can tell you that when you’re looking to rent after a bankruptcy, you mainly have two options: opt for a private landlord or leverage property management companies. There is a significant difference between the two, and your choice can greatly influence your experience.
Let’s start with private landlords first. When we say private landlords, these are individual homeowners who rent out a handful of properties as a means to generate passive rental income. Now, the benefit of renting after a bankruptcy with an individual landlord is that they may be more flexible with their tenant screening process. They could make judgements about renters’ qualifications on a case-by-case basis.
For example, they may not care that you filed for bankruptcy a year ago, as long as you can prove that you’re in a good enough and stable position to pay rent consistently. This flexibility also gives you the leeway to negotiate terms with the landlord, such as suggesting a larger security deposit or getting into a month-to-month lease contract.
On the other hand, you have property management companies that handle numerous rental properties and generally use standardized tenant screening methods, equally, on all applicants. Because they have to judge everyone’s qualifications in a one-size-fits-all way, they tend to have to use stricter criteria. So, your bankruptcy record may play a more significant role in determining your eligibility. Typically, property management companies utilize automated tools or an established point-based screening process, which allows for a more consistent, accurate, and transparent screening process.
Under such circumstances, having a low credit score due to your bankruptcy can appear as a red flag in your rental application. However, you still have the opportunity to counter this by providing supporting documentation, offering a larger deposit, or getting a co-signer or a guarantor for your lease agreement.
However, the beauty of property management companies is that they take pride in their ability to screen and vet applicants equitably. Their internal policies and processes are specifically designed to be clear, consistent, and fair, since decisions are based on data and not on personal stories and rapport. So, as long as you can provide the supporting documents to boost your chances despite the bankruptcy record, you’re putting yourself in a better position to secure the rental property.
Here’s a summary to provide a better overview of the difference between the two:
| Private Landlords | Property Management Companies |
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Tips to Improve Your Chances of Renting After a Bankruptcy
Knowing if you can rent after a bankruptcy is one thing. But finding ways to boost your chances is another. Here are some practical tips we recommend that could make a huge difference:
- Offer a larger security deposit to reassure them and temper their concerns.
- Proactively provide supporting income documentation, such as recent pay stubs, employment offers, and bank statements.
- If you’re still in a tight financial situation, get a qualified co-signer or guarantor for your lease agreement.
- Ask for a month-to-month trial period before you upgrade to a full-term contract.
- Provide several character and rental references who will provide your landlord with a comprehensive understanding of your qualifications to rent.
- Be upfront about your bankruptcy as a sign of honesty, transparency, and confidence.
- Consider getting a roommate to improve your approval odds.
Find Your Next Home with Bay Property Management
Although renting after a bankruptcy can feel like a huge step back, it doesn’t mean that you won’t be able to rent a house. The key is to approach the situation strategically – from knowing your rights to determining the more suitable option between private landlords and property management companies. Then, strengthen your application to minimize the impact of bankruptcy on your record.
If you want fair and transparent tenant screening, you can apply for a rental home run by Bay Property Management. As an Austin area property management company, we’ve designed our tenant screening process to objectively screen applicants based on industry best practices. We give you all our criteria from the get-go, so you can know just where you stand as an applicant. Even better, our customer support is here and ready to answer your all your biggest questions and concerns. Want to learn more? Explore our listings today!