Finding renters - what's your process?

Question

Account Closed · Answer

I love the Nolo books.  I used their CA landlord one as my bible while managing 25 units in CA.  They have generic books on screening tenants and managing, too:

http://www.nolo.com/products/landlord-tenant/landl...

I put all my criteria in my ads.  I let them call and let all calls go to voicemail.  If they sounded drunk or crazy or were screaming at their kids or calling me from a loud party, I made a note in a notebook as to why they were denied, and I didn't call them back.

When I was ready, I'd sit down with my notebook and call them back in order received.  I'd ask them if they met the criteria, line by line.  You weed out a lot that way.  For the rest, I'd make an appointment for them to see the unit, letting them know that the first approved tenant who actually signed a contract and paid the security deposit got the apartment  & that I kept showing the unit until that is what I had.

And if they were late (without a call with a dang good reason like they're stuck in bumper to bumper traffic, which I could verify on Google maps) or didn't show, they were denied.

I liked showing the unit in person to one tenant, as opposed to an open house.  I could see what they cared about, what questions they asked, if they didn't ask any normal questions (red flag), if they were picky, if they were bickering, if they were rude - all of which I can deny for.

And I always asked them, "So, why are you moving now?"  This normally catches them off-guard, and you will often catch the ones who were trying to pull a fast one.  "My aunt doesn't want us sleeping on her couch anymore."

I also required that they pay for the application fee with a personal printed check, and I asked to see their ID and I'd write down the address on the ID.  This is so I had two addresses to check against the addresses they gave me on their application.  Most tenants will not give you all of their previous tenant addresses, and this is a way to catch them and deny them.

My best advice, though, is to have your criteria written down before you start advertising and never stray from your criteria.  There are really good con artists out there who will seem so cute and so sincere, and they are really good at getting you to like them so much - that when you learn about something in their info that does not meet your criteria - you will want to overlook it or excuse it.  You'll want to give them a chance, you'll feel sorry for them...

This is when you must remember your criteria.  Whenever you start to "work" to make a tenant fit your criteria - to put a square tenant into your round hole of criteria - you must absolutely recognize that moment and just stop.  Just stop.  And deny.  If you don't, you will be sorry.

Michele Fischer · Answer

Figure out where you are going to get your credit info.  Many companies require you to use their application forms (on-line or faxed/e-mailed), which we do and add our own supplemental pages for info they don't request but we want.

Think about the qualities of a good tenant, what your criteria is, and design a process to weed out undesirables and look at credit, criminal landlord history.  I have used good and bad tenant applications to develop a checklist, so now it is very easy to assess each application that comes in as yes, no, or maybe.

We list on Craigslist, take calls, and funnel everyone to see the unit.  There they get an application packet, and they turn it in if they are interested.  We do a first screen within hours and start calling and processing if they seem viable, with an answer within a few days.

Your state may have rules about what you can and cannot screen for/ask, and there are federal rules.  Look for a local landlord association, your dues normally get you all the forms that work in your area.

Jennifer L. · Answer

@Adam Beckstetdt I pre-screen before having them pay the $40 background check. I'm not comfortable having someone pay for a check if they don't  make the minimum income or some other red flag comes up.  Good luck with your tenant search!

Adam Beckstetdt · Answer

You all have submitted some great info and I greatly thank you for that. So it seems like you all prescreen people and then have the applicant pay for a full screening if you choose them. Is that correct?

My wife and I looked over Buildium and Cozy last night as a starter. We really like being able to take payments from those sites. 95% we will use Cozy. I know in our research that the payments can get delayed about a week but as long as I can see they paid I know they are working on speeding that up. If anyone has comments about either of these I'm interested to know what you think. It seems like I will need Buildium when I get 50+ units but I am not there yet and having something would be better than nothing at this point.

Currently I have 2 units, 1 rented, 1 just closed on and getting repaired, closing on a 6 unit tomorrow, and another 6 units within a month. The first unit I had already had long time tenants in it so I never had to screen anyone however I will need to start looking for tenants in the next two weeks.

Jennifer L. · Answer

The last time, I listed on Craigslist, had an open house and had 4 applicants to choose from.  I checked paystubs, bank balances and credit reports/scores for each one.  I called former landlords and got great tenants.

This time I'm listing on Craigslist, Zillow (syndicated to other sites) and Cozy (syndicating on other sites.)  I will check paystubs, bank balances and speak to former landlords.  I will run them through our local civil court website to make sure they don't have any judgments.  Once they pass initial screening, I'll have them do a final screening through Cozy for background and credit.

Account Closed · Answer

I actually stopped charging application fees, because in CA if a tenant pays for a credit check, they have the right to ask for a copy of the report.  I didn't want to have to deal with that.  If they don't pay, then you don't have to give them a copy.  We got a really cheap deal online through a local screening service as a perk of the owner's membership in the Apartment Assoc., so it was not big deal.

And I also prescreened them, to save them the hard hit on their report.

Maggie Jones · Answer

I just saw this thread after posting our process over at https://www.biggerpockets.com/forums/52/topics/362447-our-process-for-finding-great-tenants?page=1#p2302107

Account Closed · Answer

Hi Adam,

As an inhabitant it is basic for me to meet the landowner/proprietor when I do a stroll around review. It spares me from future issue like finding that the landowner is difficult to deal with. I think having a run of the mill association with the proprietor will give prominent purposes vital to both sides. Giving a typical client relationship to tenants(s) will keep from perceiving future issue/clashes in travel. What's more landowner/proprietor will receive momentous comments by giving a better than average customer relationship to the tenant(s). To entire it up no more issue with having a lease holder for they will come to you.

Patrick D. Roberts · Answer

Hi @Adam Beckstetdt, good question. The screening process begins with marketing. When you advertise the property, definitely make sure to include your qualifying standards. This may deter unqualified renters.

You can also screen during the 1st contact by telephone or email. First, communicate your qualifying standards, and second, ask open-ended questions such as: "What can I tell you about this property?". The way in which the applicant responds may clue in on some red flags. Be careful, however, as they are limits to the questions you can legally ask.

Make sure that the application includes all the pertinent information: Full name, ss number, previous addresses and landlord info, verifiable income level, number of occupants, release signature (legally required for criminal background and credits and employment verification), and two pay stubs.

Make a copy of the tenant's photo id and offer them your tenant manual to read.

The key to the process is to be patient and as thorough as possible.

Best of luck to you!

Adam Beckstetdt · Answer

Another thing I was thinking. So after the pre-screening of a tenant what paperwork do you do with them.

Currently I;

Get a signed lease

Give them a lead-based paint disclosure or email it to them

Make sure there are appropriate smoke & CO2 detectors and have a signed form. Install if needed

Have a unit inspection form to go over current condition

Is there anything else? Or is anyone willing to share their forms?

Finding renters - what's your process?

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