Steps to Screen and Rent?

Question

I'm closing on a single family investment property in a few weeks and have a bunch of people interested in renting it due to a Craigslist ad with no photos (we're replacing kitchen appliances and some flooring right away, so I want to use photos of the new stuff). I will run the application through Cozy.com once we have photos. Should I do phone screenings of interested potential applicants before they apply? If so, what questions can/should I ask without running afoul of Fair Housing laws? Also, should I schedule open house showings for anyone or just those who've applied and/or been phone screened? Thanks for your advice!

Luke H. · Answer

I've been doing rentals for years and I want to save my time and energy. So with that premises in mind:

1) I would put your qualifications in your AD. Example from my last real AD.

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2) I do this to help reduce the amount of callers that will not qualify.

3) If you decide to screen over the phone I ask. Where do you live now? How long have you lived there? How much do you pay? If, less than my house can you pay my amount? What do you do for work? How long have you worked there? Who will be living with you?  <--I write all this down so if they do fill out the app I can see if it is the same.

4)I prefer to have a tight schedule based on appointments, 20 min windows. That way strange street traffic doesn't just walk in without being pre-qualified over the phone. And it shows tons of interest to all potential tenants, scarcity.I typically will not show until it is about 1 week from being done.  An for people that can't wait I ask them to fill out the app and then I will show it.

Oh yeah I'm good! If this was helpful consider voting on the post!

Michele Fischer · Answer

Potential questions to ask applicants over the phone or in person:

What are you looking for?

When do you need the rental?

Where do you live now?

Why are you leaving?

Do you have the money to move in?

How many people will occupy the rental?

Are you new in the area?

Do you have pets?  What kind?

Do not mention or ask questions about race, color, religion, sex, national origin, handicap, sexual orientation, marital status, or familial status.

Phil Trietsch · Answer

Dave,

Sounds like you will be leasing and managing yourself.  Consider joining your local apartment association (usually by extension you will be joining your state and the national apartment association).  This can help you on several fronts:

• Should give you access to applications, leases, addendums, and many other forms that will help you.  It is best for these to be state specific vs. some generics that you find online.  If you ever have to evict or take other action, you'll be very happy you used time tested materials designed specifically for your jurisdiction.
• Should also give you access to Fair Housing training.  It's great that you are aware and want to comply with it.  Many people don't know that in addition to national fair housing law, states and municipalities may have additional protected classes (for example, in Austin TX we have local additions to fair housing that cover sexual orientation, status as a student, and others)
• There are resources from the national apartment association (and through many state and local associations) specifically geared to educating and supporting independent rental owners (usually regarded as having less than 100 units).

You might find similar help through a local Realtor who could provide you with limited service for a small fee to help you with screening, applications, drafting lease, etc.  If you are showing and finding the prospective tenant and they are just assisting with paperwork, it might be cost effective.

For properties that we manage, we screen any applicant that wants to apply but they must sign off on our rental criteria so that they can't claim that they didn't know what was expected to qualify before they put their application fee at risk.

Hope this helps,

Phil

Account Closed · Answer

Hi @Dave Holman

Congratulations! Here's a post I wrote that covers my process from marketing to move in. If you have any other questions, don't hesitate to ask.

https://www.biggerpockets.com/blogs/9099/53292-do-you-have-a-move-in-process-you-need-one

Mark Fedorov · Answer

Don't forget; if you do the phone interview and the written application and assuming you have a conversation with them as you show it... look for inconsistencies.. did they say they were moving from Florida, but the credit report have the last address not in Florida? (they lied once, they will do it again) Are they moving because the last landlord was bad or dishonest? (Yeah, no) Are they looking at the apartment with a boy/girl friend.. who will definitely not be living there? (see where they live now)..best bet is to call the employer and the current landlord.

Also, I differ from @Luke H. in one way, never rent to people who need the apartment next week. If they waited for the last week of their lease to find a new place, that is a whole lot of risk to take. If I have an opening on June 1st, I will show it in Mid-April, giving the tenant enough time to make a decision and being able to give the old landlord 30 day notice. I have found that the people who want to move quick are trying to run from something, and they will run from you,

Luke H. · Answer

@Mark Fedorov, I agree about people moving fast.  To me, I need it now, i have the cash, I'll fix your place are red flags and like a smoke screen....

I don't care when they need the place. They all go through the process.  My Dad always gets excited when he sees cash in hand, but I just smile and say here is the app, let me know when it is ready.

I don't show the place until 1 week before it is ready because I don't want them failing over tools, bothering the workers, or making things disappear.  It happens...

I tend to try and not solve tenants 30 day notice, I need it now, I have the money issues. The tenants I want have already given notice, going month to month and have already worked out something with the current landlord so they can move out. Now, I will hold a deposit for 1-2 weeks, and I will prorate the rent.

Luke H. · Answer

Send the link to your AD if you want my feedback. And thanks for the vote!

:)

Dave Holman · Answer

Thanks Luke, very helpful reply, upvoted! I should've clarified, the ad had a lot of details about the property and also my min income requirements (3x rent) and that there'd be a credit and background check so I think most of the inquiries are not coming from left field.

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