What is your rental process?

Question

I have been renting out property for a long time. This latest rental has been pretty tough to move. I wanted to outline my process so you guys could tear it apart:) Any feedback is greatly appreciated.

1. Get home 100% ready

2. List on Craigslist, Zillow, Facebook

3. Prescreen tenants over the phone, I usually disqualify 50% of folks.

4. Set up appointments if they qualify

5. Take an application (This is where I am having a lot of issues. Folks don’t want to do the online ap but they also don’t want to pay me directly for a paper ap.) My problem could be that folks just don’t like the property, not sure on why no aps.

6. Check references

7. Sign lease.

Concerns I have;

1.People want to know on the spot if I will approve them, don’t want to spend $40-80 on an ap to get rejected.

2. The quality of tenant has been very very very low. This is a nicer place, I can’t bring myself to a sub 500 credit score applicant.

3. Folks don’t see me as that credible. I am relatively young (30) and own a good size (12 unit) complex. I know many of you will say that doesn’t matter but you probably have little experience with being 18-30 and begging for loans, tenants, and agents to take you seriously... Should I just change it up and be the “Property Manager” and have folks think that daddy owns it?

4. I hate driving the 1 1/2 hours (round trip) to show the place. What do you do to cut down your showings? Have folks look in the windows? Bluetooth key?

I am honestly looking to change and improve the process. Any suggestions would be great!!!

Martin Neal · Answer

@Kai Van Leuven I am a fairly young guy too but people always tell me I act very mature for my age so I guess my advice would be to dress the part, act the part, look the part.

Here is my process:

Right on the phone, I weed people out with basic questions:

Why are you moving??

How soon are you looking to move??

What is your credit like??

Any criminal history??

How much do you make monthly??

How long have you’ve been with your current employer??

Any Evictions??

After all of those questions, I say to them this, It appears that you are not qualified because (insert reason here i.e. you don’t make enough money to pay the rent, I require 3 times and you only make 1 times the amount before taxes), however, You are welcome to fill out a application and we will screen and consider all applicants accordingly.

All the bad seeds typically drop out right there. None of the questions I asked are discriminatory and are fair questions to ask.

Just be patient and wait for the right one to come along. If it goes months without renting then you have to question your product and your monthly price.

Anna Watkins · Answer

@Kai Van Leuven - This is a terrible time of year for rentals in any state.  Sounds like your process is reasonable, but why do you make them pay for a rental application?  If you're only charging for your cost for the credit report, most services have the option for the application to pay the service directly.  I take the application, make sure they check out with what they say, and then set up the credit report invitation email.  The applicant pays and you get the report.  SmartMove and RentMarketplace are two that I've used successfully.

Kai Van Leuven · Answer

@Ned Carey you can not make a profit in Washington State for rental aps.

Mags S. · Answer

I show (in groups) only if they appropriately answer my questions via email, text or phone. I have detailed qualifications listed in my ad. (I say acceptable credit, not a score).  I have family help me during these open house-type showings as I only allow one family in at a time. I ask similar questions during each showing. If they pass my in-person review, I offer them an application (from bigger pockets) but do not collect any fee. I also include a cover page, again outlining tenant qualifications and make them acknowledge receipt and review by signing and return with application. I do my due diligence reviewing and (internet) researching each application (usually rental history, etc). If they are disqualified at this stage, I circle the reason (from qualification list), on their signed cover page and file away (cya). App completed accurately = truthful/lying is the biggest disqualifier). If they meet my requirements on the app, I contact them, confirm their email address and provide that to  MySmartMove.com. Tenant pays fee directly to mysmartmove.com.

Nathan Gesner · Answer

I don't see anything wrong with your process. It's extremely normal to get a lot of calls, fewer lookers, and even fewer actual applicants. It's not unusual for them to try to qualify even though they don't. They will tell you they have the money on hand or that their credit sucks but it's because of (insert drama here) and not their fault, etc.

You should use your basic criteria to prescreen. For example, you may require they make 3x the rent, credit score above 650, no more than two persons per bedroom, and no pets. If they fail to meet any of those, don't schedule the showing. They may lie and still want to apply; let them but deny them. Don't feel bad for people that fail to follow basic instructions.

As for showings, you could try an "open house" format where everyone is scheduled for the same two-hour block. This saves you from driving each time. The downside is that you'll lose some applicants because they just can't make that window. Another option is to use a lockbox and let them look at the unit without you present. This sounds risky but there are property managers around the country doing this successfully with hundreds of showings a year. The third option is to find a trust-worthy tenant to handle the showings and pay them $10 for each showing.

Anthony Wick · Answer

@Kai Van Leuven

My hard copy app and prescreening (landlord checks, job verification, open source online websites like Facebook/State Court Records) is free. Once that looks good I use online $40 per applicant for credit/criminal history/eviction. And I only submit these one at a time so people aren’t paying $40-80 to apply and come in second.

Amy H. · Answer

@Kai Van Leuven I’m having the same issue right now too! I make people fill out an application on Cozy (no background check or credit check yet) before I am willing to drive almost an hour round trip to meet them (make sure they are serious about the property to not waste my time and gas). I’ve gotten so much push back on it! I’m 28, and I’ve had a few questions about my age too. So frustrating.

Lynnette E. · Answer

Set up the viewings in groups, maybe twice a week and have everyone come at the same time.  Saves you a trip and lets them see the competition.

Jack Medford · Answer

@Kai Van Leuven If you are having a lot of issues with finding tenants with good credit, maybe use a different metric to determine economic viability? Where I invest, the typical tenant has absolutely horrible credit, so instead we use income to rent ratio. We try to find tenants with income that is 3X the rent (2.5X at the lowest).

In some places I own, the ratio is closer to 1.5, because they are just super low income tenants. In these places, I just account for a much higher vacancy rate when purchasing. I've also recently made the decision to stop purchasing in almost all of these areas, as they come with more headaches than they are worth.

Anna Watkins · Answer

@Kai Van Leuven - SmartMove.com is only for credit & background checks, no applications, so you can receive the application any way you want.  RentMarketplace.com has an online application facility that's free, or you can accept a paper application, whatever you want.  You can also just do the credit check with them.   Online application services don't screen info, they just provide the online option. You do the application review, and initiate the credit check for any applicant you want to move forward with.  The cost is (I think) $34 for credit & criminal.  SmartMove is $40. Both companies use TransUnion data.

What is your rental process?

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