Update: three checks disagree — how should I choose a Munich tenant?

S

saveTheSparrow

Property manager
I’m reviewing applicants for a 2-bed new-build flat in Munich, valued at roughly €713,000. Income, references and credit history each favour a different person, so choosing whichever file “feels strongest” seems inconsistent.

What objective criteria have genuinely predicted payment reliability and tenant retention for others? I’m also interested in screening rules that sound reassuring but add little useful information. Turnover and vacancy could be expensive, while Munich notice rules mean a poor decision may not be easy to unwind. I’m weighing this against selling rather than letting, so if anyone made that opposite choice at a similar price, what tipped the balance?
 
I would prioritise verified ability to cover the rent, consistency across the application and how promptly requested information is supplied. References are supporting evidence, not a deciding vote; they can be uneven or difficult to verify. Apply the same written criteria in the same order to everyone. What is the proposed market rent? Without that, income evidence cannot be judged in context.
 
Because a poor match may be difficult to unwind under Munich notice rules, I would agree the scoring system before looking again at the names. Give the most weight to verified affordability, consistency and complete documents rather than employer status or the sheer length of a credit record. For example, a prompt, fully evidenced application may tell you more than a glowing reference that cannot be checked.

Use only tenancy-related reasons and set a tie-break rule in advance. I would also ask about intended timing and review any relevant maintenance history, while accepting that no screening process can guarantee a long stay.
 
Retention matters, but screening cannot reveal who will stay for years. Ask the same practical questions about intended move-in date and expectations for the tenancy, without straying into personal matters. Then compare the cost of a possible vacancy with the temptation to hold out for an imaginary perfect applicant. Local notice rules should also be confirmed before signing, not discovered when a tenancy goes wrong.
 
There are two decisions mixed together here: who is the lowest-risk suitable applicant, and whether letting a €713,000 flat makes financial sense at all. For the second, you need the achievable rent, expected vacancy time, recurring costs and a realistic turnover allowance. Are all applicants being considered for identical rent, deposit and tenancy terms?
 
Following nina_peterson’s point, a tenant who stays longer is not automatically the best financial outcome if the starting rent or terms are unsuitable. Conversely, repeated turnover can swallow the apparent advantage of choosing the highest offer. I’d compare candidates at the advertised terms only, then model retention separately rather than rewarding promises about how long someone expects to remain.
 
I disagree slightly with focusing so heavily on applicant characteristics. Retention is also driven by how the flat is managed. A new-build can still have defects or unresolved maintenance issues, and slow responses can push a good tenant out. Keep a maintenance history from day one and explain the reporting process clearly. That gives applicants confidence without weakening the screening standard.
 
A practical scorecard could be very short: documents complete, income verified, payment history reasonably supported, information internally consistent, and proposed start date workable. Mark each item using evidence available for every applicant, then investigate discrepancies rather than guessing. Keep deposit handling outside the ranking: the same lawful amount, terms and process should apply to whoever is selected, subject to the rules in Germany.
 
This has helped separate the issues. I’m going to fix the tenancy terms and final market-rent assessment first, then use one short evidence-based scorecard for every applicant. References will confirm details rather than outweigh income or credit information, and any discrepancy will get the same follow-up question. I’ll also compare the likely net letting result—including vacancy, turnover and maintenance—with the sale option around €713,000 before committing.
 
That sounds more defensible. On the sell-versus-let calculation, avoid letting the purchase value dominate simply because it is a large number. Compare the expected net rent with what selling would leave after transaction costs and consider the management burden and liquidity you want. For the tenant decision, retain a dated note of the criteria and reasons used, while collecting no more applicant information than the process actually needs.
 
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