Well done, you!
- You created a compelling listing for your rental property.
- You launched on Zillow, apartments.com, zumper, craigslist (plus several other sites).
- Your email box quickly filled up with people saying, “Love your place! Ready to move in now!”
Deep breath. Before you accidentally become the subject of another creepy, made-for-TV movie about renters from hell, let’s pause. Remember: This individual, couple, or family will be living in your largest financial asset! Finding the right tenant is more than important. It’s crucial! (It’s also an art form.)
Let’s look first at two big, red flag scenarios:
- The sob story. I’m all about helping people, but would-be renters who immediately start gushing about all the drama in their lives will be non-stop drama for you. Does she spend 20 minutes moaning about how everyone constantly screws her over? Does he hand you a five-page letter for why his credit score is in the dumpster? Your buzzers should be going off! Thank these folks for their interest, subtly encourage them to find a good support group, and move on to the next applicant.
- The hard “no.” Based on our experience, we strongly encourage newcomers to the rental property business to avoid renting to registered sex offenders, convicted felons (within the last five years), or individuals who have recently filed for bankruptcy or been evicted. There are companies that specialize in working with such individuals, and we encourage you to direct such applicants accordingly. But until you are more seasoned, it’s best to just say no.
So . . . how do you really screen tenants effectively? We say: You make them work for it.
Great future tenants will: (a) be proactive; (b) respond quickly; and (c) comply with your processes (without insulting you for requiring them). Some rental companies might disagree but we’ve found the following steps help eliminate bad tenants and insure good ones:
- Make any adults over 18 who will be living in the home complete a background check before moving forward. This step by a prospective renter says, “I’m committed and I’m not hiding anything.” It also allows you to see if they have a positive payment history and surface any “hard no” issues. Simply send this Transunion (mysmartmove) link to each applicant. Once they pay for this background check, it will come to you. Or you can also use Zillow's application process to easily send an application link.
- Use a program like 17hats to build a questionnaire template. This is an easy way to gather helpful information about employers, current landlord, whether they have pets, etc. You’ll only have to do this once. Then you’ll have a great resource to send to any applicant.
- Once they complete these requirements and you’ve screened their employer, then (and only then) schedule a viewing. In this face-to-face meeting, you’ll be able to tell if they are a good candidate.
- Make the ask. After you show someone the property (and assuming they pass all your tests), ask them to put down a deposit immediately. This will encourage them to make a decision and lock in your great property. Again, you can use an online software system like 17hats to create leases, send invoices, collect deposits, etc.
If you want to avoid the hassle of having to create a mountain of paper work, we can help. We offer our extensive “Move-in Document Bundle” to those who are new to the rental business. This bundle includes our comprehensive lease, cleaning list, tenant questionnaire, list of additional revenue generators (worth over $1000 in extra annual revenue), a move-in checklist, and some other generic white papers on lead-based paint, etc. You can easily tailor these documents to your property. You’ll save tons of time, avoid needless hassles—plus you’ll get tips for maximizing your rental income! Email us now to get this entire bundle for just $275!
In our next email we’ll look at common fees most rookie landlords forget to charge. (NOTE: These oversights can cause you to lose out on thousands of dollars in revenue!)
Here to help you make more money,
Conoly and Matt
P.S- If you need help with your property, continue to check our blog, or sign up here for an hourly consultation. We promise that you will earn the price back in value for the phone call!