multiple applicants. How the heck do you guys decide?

Question

I have 3 applicants so far, that went through the BP screener with transunion. This is for a little lower quality property than my others.

They all arent good, but that's sorta to be expected when people are in the long term rental market. The screener has auto criteria set 2 were denied and one accepted. Credit scores 530s,615,590s. Bankruptcy on two of them, one the bankruptcy was in 2005, the other recent.

One is a single guy that makes about 34k a yr, one is a couple that each have 10-12hr jobs. And the other has a job at landscaping job, that makes 16 an hr, currently working 60 hrs a week(but what about winter?)

The rent is $745.

How do you guys decide?

Bill S. · Answer

A little bit of phone screening would have eliminated all three of these applicants. You want to rent by day X then ask them on the phone, "When do you want to move?" If it's not day X or before then tell them you want someone to start paying rent on day X, if that works, you will show it to them. If not, tell them to call back in two weeks or whenever you would accept day Z.

Ask open ended questions before setting an appointment. This will eliminate wasting everyone's time and money. Tell people on the phone they won't qualify. Saves everyone. If they lie and apply anyway then wasting their money on an ap that won't approve is their fault.

Jeff Bridges · Answer

Your problem is your application tool has everything all built into it so applicants must pay a credit check/background check fee regardless when there might be something obvious to you that automatically disqualifies them. An example is who cares if their credit score is XXX if they dont make 3 times the rent and have an eviction; you can already move on and save that extra step and cashing the app fee check. Most landlords may hand out a digital or paper application, review for their criteria, then run the background/credit check for those that pass initial criteria and are close to accepting that applicant. paycheck stub + landlord references (you are calling old landlords right?) should be a good indicator of what you might expect from this tenant.

You say you have had lots of interest in the property, therefore you should continue to be accepting applications from new applicants until they both pass criteria and hand you a security deposit in cash/ money order along with signing the agreement to hold the unit or the actual lease. Again, just because you approve a tenant, doesn't mean they haven't already applied and found another place to rent. Get it out of your head that you owe applicants a first come first serve due process but the opposite; the first applicant who qualifies, can move in and pay the security deposit to hold the unit wins. Your marketing/ application acceptance for new applicants does not stop until that happens. It seems you stopped at 3 for some reason thinking you had to make an immediate decision on them before accepting more applicants. And consider doing normal applications and use mysmartmove.com when you are ready to go to the backround/ credit check phase with a qualified applicant for example.

Never withhold an application from any applicant. Always have paper ones or ones to email out on hand. This is where you get into trouble if you deny an applicant the ability to apply. But not all applicants have to apply through your transunion tool.

Fay Chen · Answer

Sounds like they all make 3X the rent. I would avoid the landscaper. Because of the nature of his job, he may be more likely to track dirt and store tools in your unit. Then your carpet and walls may get run down a little faster. This is not to say that all landscapers are messy. And I personally have nothing against landscapers. You can probably get some clues from his car, if you show him the property.

Dan Pereda · Answer

Great tip.  This helped a ton during when i listed my unit during winter, people were looking that didnt want to move till June.

Steve Babiak · Answer

In all fairness, if an applicant is not planning to move soon enough for you, you should not be processing that application until you are willing to offer that applicant the unit.

There are a couple of ways to deal with multiple applications.  First is to accept the first qualified applicant as described in this next link.

http://www.biggerpockets.com/renewsblog/2008/2/2/managing-tenants-part-two-steering-clear-of-the-fair-housing-act/

But if you are trying to pick the "best" applicant, then you have to have a somewhat rigorous approach such that no applicant can achieve the required qualifying score; your policy would then have an exception that if some certain number of applications or within a certain timeframe there is not fully qualified applicant, you would offer to the most qualified.  To do this, you need to have an "objective" scoring approach as outlined in this next link.

http://www.biggerpockets.com/renewsblog/2008/2/9/managing-tenants-part-three-written-criteria-for-tenant-selection/

I just offer to first qualified applicant and don't process any applications beyond that one.

One other way to break a tie is to see who is willing to commit their CASH money to lock in the unit; you would get the full amount of money that you require to hold the unit and get paperwork (a binder, holding agreement, or lease - whatever you use) signed that shows the commitment from the applicant.

Jeff Bridges · Answer

I'd continue to aggressively market the unit until you find a) tenants that qualify and b) tenants that are able to move in on your desired move in date. Just because a tenant qualifies, doesn't mean you are obligated to hold the unit for them indefinitely until they are good and ready. You are marketing the unit for X move in date, therefore, applicants that qualify and can move in the on marketed date get first priority. You just explain to them that the first applicant that meets your criteria and able to move in on the move in date along with security deposit etc gets to reserve the unit. Try not to waste the time of yours and applicants by telling them your requested move in date up front and having them self disqualify if they are unable to meet the timeframe within reason. Make sure you're adding this relevant info to you craigslist ad, and all other online ads and flyers, postlets etc.. Don't give up and don't artificially limit your pool just because you ran three people through your magical screener tool and think you need to pick between all of those duds.

Also note that many landlords experienced with landscaper tenants find that carpets get trashed with dirt and walls get smudged by grubby hands so something to note for future reference in your considerations for applicants.

Steve Babiak · Answer

Two ways to prioritize applications, by the date and time received of course, but you do want to give a priority to applications that come closest to your desired move in date as opposed to ones with a later move in date. You can't give priority to whoever spoke to you first - what happens if they take their time getting the application back to you until you already have some you screened? I had that happen once, where the first people to see the place handed in the application after two others were already received.

Austin Taylor · Answer

Hello,

I am in the process of leasing my first rental, a single family home. I also have had quite a bit of interest. The first person that contacted me could not view the property on a Saturday, and is instead coming on a Sunday for a showing. Since then, others have contacted me and agreed to view the property on a Saturday.

Should I still prioritize applications on a first to apply basis, or should I prioritize on first contact basis? (I am assuming the Sunday viewer will apply)

Thanks for your help!

Gabe G. · Answer

Agreed. I am going to start asking some more questions verbally, before giving link to application. Good info.

Thank you

Tim Cooper · Answer

When I have a tenant that I like in all other areas but they have bad credit, I charge 1st month, deposit as usual, plus last months rent. If they are able to come up with that, then they know they have a lot to get back when they are ready to move out and have always been good tenants for me.

multiple applicants. How the heck do you guys decide?

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