First time landlords: Getting a tenant

[Anna Milligan]

The fact that we are novice in this business will shine through in this post. We purchased our first investment property as a foreclosure on 9/2/16. The idea was a BRRR approach. On top of the $65k price tag, we put $22k into renovation and repairs. We paid cash with the idea that we would get a mortgage on the property when the improvements were complete. Now, here we are with $85k in this thing. We think it will appraise at about $110k. Based on comparable sized homes for rent in the area, it should rent for about $1000/mo. Sounds decent, right? Well, we can't get the darn thing rented. We've had it on the rental sites (Zillow, Trulia, HotPads, and Craigslist) for 3 and a half weeks. We've had a total of 44 inquiries. When the flood of inquiries started coming in, we thought "This will be easier than we thought!" So wrong. Of the 44 inquiries, we have made about 12 appointments to show the place. Of the 12 appointments, only 6 have actually showed up! After two no-shows, we started sending appointment confirmation texts. Still, no luck in getting people to actually show! What do we do? We are solidly into the "holiday season" now and I feel like we're going to have even more trouble renting the place. Do we lower the rent? Do we eliminate the $35 application fee (FABCO check) and cover that ourselves? Do we just grit our teeth and wait it out? So far, the only comments we've gotten are that the floors aren't in good condition (they are hardwood and could use refinishing but we are TOTALLY out of money to do that... We're lucky to be able to give our kids Christmas this year!). 

[Marcia Maynard]

@Anna Milligan

Welcome to Landlording! I'd be glad to help you out if I could see photos of the property and review your online advertising. Perhaps even chat with you by phone. Also in BP Podcast #83 I share tips and strategies about landlording.

It's extremely rare for us to have prospective tenants "no-show" for a viewing of a property. We are able to rent properties at all times of the year. Last year we had two vacancies (out of 16 units) that we filled in December! If you had 44 initial inquiries, it shows there is an interest and people in need of housing in your area. Now the key is to make your property stand-out and you as a landlord stand-out. People are looking for a home and a lifestyle. They are looking for good landlords too. There are a few key elements that seems to be important to everyone: safety, cleanliness, affordability, comfort. You need to switch from investor/rehabber mode to leasing agent/property manager mode. People will be attracted to not only the property, but also to you as a landlord. How are your interpersonal skills? Are the prospective renters seeing you as someone who will respect them and whom they will respect in return?

Our mission statement:

"We strive to provide safe, clean, affordable, comfortable, and quiet housing for responsible renters in the neighborhoods of West Vancouver."

Our management style:

We own and manage our own properties. We respect our tenants and perform in a way that will garner their respect in return. We respond to tenant inquiries and needs in a timely manner. We keep current with property maintenance. We respect our tenants' privacy. We require our tenants' cooperation and adherence to the terms of our rental agreement. We value open and honest communication. Our mission statement emphasizes our values and we seek those who share those values. We partner with law enforcement and are actively involved with organizations in our industry that promote best practices. We provide a necessary service to our customers, not just a commodity.

Our marketing strategy consists of four parts:

1. identifying our market

2. creating a rental property that will appeal to that market

3. advertising in ways that will reach that market, including word-of-mouth and internet advertising

4. responding to inquiries quickly, politely and efficiently, showing kindness and respect

Our tenant screening process consists of five parts:

1. advertising/listing the rental (includes a clear description of the property, some of our terms, and some of our rental criteria);

2. answering the initial inquiry, tenant screening and interview;

3. internet search and social media check; (often done while on the phone with step two)

4. property showing and more dialogue with the prospective renter (rental applications and our full written rental criteria is available at this time for prospective tenants to take, also a copy of our full rental agreement is available for viewing);

5. rental application (review, process, verify, check references.)

We don't interview people by text or email. We interview people by telephone and in-person. We only show our properties to people who appear to meet our minimum criteria to rent, based on the interview. We only offer to rent properties to people who have completed our full application process, have met our qualifications, and are willing to accept our terms. By providing a significant amount of information to the prospective tenant, they have the opportunity to self-disqualify themselves during the process. We pretty much know if the tenant is likely to qualify by the time they submit an application.