Our Process for Finding Great Tenants

[Maggie Jones]

We just filled our second vacancy of the year and my husband and I have been marvelling at how easy it’s been. The only thing that’s hard is that we don’t have enough units for the wonderful applicants.

I’m know a big part of our success is luck and the area we’re in but I wanted to share our process in case it works for others.

PLAN & PRICE

• Set a date for “open house”/ showings a weekend or two before the end of the month.
• Set a price that’s just on the high side of fair for the area. I use zillow to gauge supply and price in the area.

STAGE & LIST

One week before the open house:

• Stage the unit: Shop your house and the big box stores for little details that help the prospective tenants imagine their glamorous life if they lived in your unit. Furniture not required but curtains, towels, dishtowels, throw pillows, etc will make the home look warm and lived in. I love fresh flowers, wine with glasses, and a bowl of fruit. Needless to say, make sure everything is clean.
• Take and Touch Up Pictures: Choose the time of day when the unit gets the most sun, turn on all the lights, and take pictures of your beautifully staged home. If you don’t have a quality camera, see if you can borrow one from a friend. Either way, make sure you take the time to touch up the pictures adjusting exposure and color-correcting as necessary.
• Post to Quality Sites: Avoid Craigslist or yard signs. List your unit and add all the beautiful images to the more reputable services. We post on zillow and they syndicate to other quality sites.

SCHEDULE SHOWINGS/ EXTEND OPEN HOUSE INVITES

As interested parties begin reaching out, reply with your rental requirements. Include a note that you will run a background and credit check.

Example:

Hi [Prospective Tenant],

Thanks so much for reaching out!

We’ll be showing the unit [Date]. Let me know if you’re interested and we can set a time.

Very best,

[Name & Contact Info]

Requirements to Rent

Qualified applicants will have/ be:

• FICO score above 740
• Verifiable monthly income equal to 3.5 times the rent or $7,525
• A good, steady rental history
• Renters’ insurance (about $100-150 a year)
• Non-smoking (City of Pasadena law prohibits smoking in this building)

Next Steps

If you think this could be home for you we’ll need:

• Completed Application for each adult applicant including previous landlord and current employer contact information
• Income Verification (two most recent W-2s or 2015 Income Tax Return if self-employed)
• $35 credit/ background check fee for each adult applicant. Note that we WILL NOT cash your check and run the report unless we plan to rent to you. If you’re not able to leave a check and we’re ready to run the report, we can arrange to receive the fee via Paypal.

If folks are still interested, invite them to the open house, booking ~2 groups every 15 minutes. Prospective applicants will be able to see that there’s lots of interest but you’ll still have time to chat with everyone individually.

Research those who have appointments online. If you talk with candidates that sound like a perfect fit, send them the application in advance so they can bring all materials (completed app, pay stubs, background check fee, etc) to the open house. Don’t allow anyone to submit an application before seeing the unit and meeting you.

OPEN HOUSE

Before the first appointment, refresh the flowers and make sure the unit is impeccably clean. Wash all the windows to maximize natural light, turn on all the lights and blast the AC if it’s warm out. Make sure the bathrooms have TP and attractive hand soap. Get some cookies baking if that’s your thing.

Have set out and available for all:

• Applications
• Pens
• A one-sheet reiterating your rental requirements and the application process
• Tape Measure

Chat with everyone and charm their pants off. Make them want to live in your building. Get a feel for who they are, how they’ll treat your property, how long they’ll stay and how much trouble they’ll give you.

Encourage anyone you love and who loves the place to fill out an application immediately. They can send you a scan or photo of their paystubs or tax return later that afternoon. Others can take the application home and send it in later but let them know you’ll be making a decision quickly.

REVIEW APPLICATIONS

After your open house is done (whew!) you should have a stack of applications. Pull out the ones that meet your stringent requirements. If your requirements were too stringent and didn’t result in a qualified applicant, consider taking them down a notch and review again (maybe 720+ credit score and 3x income if that’s reasonable for your area).

For these candidates:

• Verify income against copies of their last 2 paystubs or, for the self-employed, their most recent tax return. Do not be seduced by those who say they’re paid in cash or just started a business. Let the verifiable numbers guide you.
• Contact previous landlords to confirm they were good tenants. If they previously owned confirm this against county records.

FINAL CREDIT/ BACKGROUND CHECK

If you have more than 1 who’ve passed this screening so far, contact the one who applied first and let them know their application has been provisionally accepted pending final background and credit check and that you’ll be cashing their check now. This is a good step to make sure they’re still interested. Top applicants tend to have multiple acceptances so they may have already found a place. If this is the case, move on to your next.

When the credit and background check come back clean, congratulations! You’ve found a great tenant! If not, send an email letting the candidate know why they were not qualified and move on to the next. (This hasn’t happened to us yet.)

SIGN THE LEASE

Accept rent, security deposit, and get the leased signed. Move quickly as there is still a chance they will balk at the lease and you’ll want to reach out to the next qualified applicant before too much time passes. (This hasn’t happened to us yet.)

NOTIFY OTHERS

Notify those from whom you’ve received an application that the unit has been rented but offer to let them know if you have another vacancy in the future.

Different strokes for different folks but this has been working magnificently for us. I absolutely adore the tenants we’ve placed. 6 years and 5 units and never a late payment.  

What works well for you? What hasn't?