How to find the right tenants in East Valley Phoenix?

Question

Hi all,

I am looking for advice on finding tenants. Previously while rent hacking in Vermont I would just use craigslist and facebook to find people to rent out rooms. This would be fairly quick to get responses and could pretty much narrow down to a few in a week and have one within the week of posting. I am moving to Arizona and will be looking to house hack there. I am somewhat concerned about timeline on getting quality tenants that would be interested in rooms not a full unit to themselves. I would like to find tenants that are "professionals" with full time jobs that aren't minimum wage (nothing against these people just want more security). I feel I could still use craigslist and facebook and just do more extensive/strict screenings but I think this would cut the number of tenants down severely.

I will most likely be out of state when I start the tenant search as I am currently in Texas. What would the best way to advertise...websites, companies, organizations etc... What methods should be used to screen. I figure credit check, personal reference, work check (pay stub). Any things I missed?

Also any East Valley phoenix people feel free to reach out with recommendations on the area, what areas to look into, future projects there, or just want to have another connection for phoenix area!

Chad McMahan · Answer

Good morning, Adam.

I have good news about tenants. As long as you promote your properties for rent on the main channels, such as Zillow(One of the best, as it crawls quite a few sources), AZ Republic/AZ Central (Heavily read by many PHX residents), East Valley Tribune, Craigslist (inferior, due to scamming and lack of reach, but still works and free), etc, you will generate a lot of interest. If you go through a property management company, it's extremely likely their rentals will show on Zillow due to crawling, and of course other sources.

There is such high demand for rentals throughout most of Arizona, that it borders on desperation for many soon-to-be tenants, and landlords hold the cards, not the renters. So definitely be picky- as long as it's reasonable.

I recommend: credit check, addresses and employer for last 5 years & reason for moving, non-family personal referral, current employer contact (call them- and be very brief and transparent- 2 questions: How long working there, and are they a good worker? If you cannot reach the contact, do a little digging and call another number as needed) & ask length of time at current work, criminal background, and space for them to write a message to the landlord for their consideration. I find the message to be very illuminating. As I'm sure you know, it's important you view your tenants as business transactions- make expectations clear, and outline everything in your agreement they will be responsible for and penalties if they do not hold their end up.

I agree if you ask for too much, they may pass- but it's unlikely (as long as your asks are reasonable), considering the eagerness and need from renters- and they are used to providing most of this with other managers and landlords. Just know that sometimes the best tenants have 0-1 weakness on paper(More weaknesses, pass!), and the other categories are strong. Best advice- Try not to let tales of woe persuade you to "give them a chance". More often than not, this indicates they will be a handful, or worse- a major liability and financial anchor. This may sound heartless- but it's not, it's financially sound. Letting them selectively have 1 weakness on paper is the generous part- and you need to be very selective with the weakness, at that.

I'm not a fan of self management as I've experienced a lot of tenant drama over the years and I no longer invest time/energy into this- now I invest money into with management- but when you're a new investor, it's a truly great way to learn. Keep yourself organized and strive to continue to improve your agreements and always be brave and responsive with your tenants and your properties. No matter how selective you are, you will get bad tenants- deal with this quickly and firmly and by the book.

Good luck!

Bob Okenwa · Answer

@Adam Sherwood

What do you consider a "professional"? Minimum wage in AZ is $12.15. People who rent by the room are typically college students, younger individuals, and/or those closer to the lower end of the earnings scale as people with money tend to purchase homes or rent entire homes.

Credit checks, landlord references, 3x income to rent are typical and you can include what you feel is necessary so long as it is legal to ask for.

East Valley is a large area. I'd suggest narrowing down on your location. From there, narrow down on the type of property you're looking for. From there, you'll find that based on these factors, your tenant base will find you when you list your rental as available. It's always about location. Can't expect top notch tenants if you're renting in bottom notch neighborhoods with bottom notch properties.