When posting your rental ad, present your property in the best way possible so you attract the right tenant prospects.
Indicate in your ad that you will require a credit check, criminal background check and past references. By providing a list of what you are looking for, you will be more likely to attract the right tenant. Just be careful that your criteria is not discriminatory (ie. chooses tenants based on sexual orientation, ethnicity, race, religion, familial status or disability status) or violates any state laws.
- Set your rent to a competitive market rate
When setting your monthly rent, ensure your rate is competitive with similar properties in your area. Rental rates that are too high may scare away potentially good tenants who feel they can get better rates for similar properties in your area. If too low, good tenants may be suspicious.
Get the average rental rate for your market and set a rate that is just slightly lower or add some value. Five dollars a month less than the average may be enough to entice the right tenant.
- Maintain good curb appeal
You will be far more likely to attract the right tenant with a neat and tidy home. An unkempt lawn, signs of wear and tear on the building exterior, broken signs and hints of hoarding activities will send the wrong signals to potentially good tenants. Keeping your property tidy will not only make a good first impression, but also ensure safety for those potentially living in your rental.
- Prequalify your potential tenants by email then by phone
When you start to get enquiries, follow it up with some email questions. From personal experience, I like to ask the interested candidates the following questions by email first before calling them:
- Are you fully employed?
- Do you have pets or are you a smoker?
- What attracted you to this location?
- What is your current situation?
- What is your plan for the next year or two?
- I would like to chat with you by phone first before showing the place. When are you available to chat on the phone?
Talking on the phone is an optional second step to your filtering process. I like to ask the same questions for consistency in their stories. Tenants may have forgotten which places they have applied to so its good to double check that the story they gave you on email is accurate and honest. Some additional questions to ask over the phone:
- Are you currently renting?
- Are you leaving a current lease agreement?
- If so, why?
- Why are you moving?
- Do you have past landlord references and employment references I would be able to speak to if I choose you?
- I will be performing a thorough background check, you will be required to provide some personal information after a face-to-face meeting if you are chosen, do you have any objections?
The important things to listen to are hesitation, inconsistencies or illogical explanation to any of the questions you pose above. Often times, I challenge them on their decisions to get clarity and confirmation that they will be committed to the full term of the lease.
- Meet face-to-face and read body language
When you book the showing, you will have an opportunity to make your judgment about the individual. Ask the prospect to bring their children and others that will be living with them. Peek inside their car. Are they presentable? How do they speak to their children? How do their children and others speak to them? Do they speak articulately? Do they seem to have it together? Is there consistency and confidence in their voice? What is their body language telling you?
If you are uncertain about them after meeting with them, cut the tour short and don’t give them an application. Let them know that you are considering other applicants at this point and that you will get back to them.
If you’re uncertain about a potential tenant after meeting face-to-face, cut the tour short and don’t give them an application.
- Watch for the bait and switch
This is a situation where a likeable and trustworthy person, couple or family are paid to pose as tenants by the real applicant. There are those whose intentions to rent property is to operate illegal activities so they get their friends or relatives to fill out the application form on their behalf.
The best way to prevent this from happening is to let them know that you will do regular inspections, you will require a criminal background check and that false information will be reported to the police. Put this in fine print at bottom of rental application. As a landlord, you can report any alleged crimes for records and information purposes only. This will show up on future criminal background checks on the individual.
- Don’t fall for the pity story
Remember that you are running a business and not a charity. You will regret falling for the sob story when a tenant fails to pay your rent. So remember your criteria. If your potential tenant does not meet it, they don’t qualify. The question to keep in mind is “how will you pay rent?”
- Check their credit score and call their references
A credit score below 600 is not good and you may want to seriously consider whether this tenant will have the ability to pay rent monthly. Check that the institutions or organizations that are enquiring on credit information are granting credit. If not, you will want to question why the enquirer is not approving credit to the applicant. Collections or bankruptcies will be noted if there are any. Blank indicates there is nothing on file and this is a good sign.
We all know that finding good tenants is key to a steady cash flow and to keeping your blood pressure under control. Landlords are in the business of maximizing return on their rental investment and we want the predictability of collecting a rent check each month. As a property management company we are paid only when we collect rents and want the same thing our clients want.
I’m sure that most self-managed landlords would agree that there’s nothing more stressful than having a vacancy or dealing with a tenant from hell. That is why as professional property managers we strive to maximize our clients return on investment by finding the best tenants, collecting full market rents, doing quick turnovers, minimizing vacancies. This is achieved with good business policies, practices and procedures.
What steps do you take to avoid high risk tenants?
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