Newbie screening tenants, am I doing this right??

Question

Hi everyone,

I have gained a ton of wisdom from this website about renting out our first home and wanted to check in again and introduce myself because I know I will have a lot more questions going forward.

My name is Kelly, I live in Tucson, AZ and my husband and I are buying a bigger home to support our growing family and owe way too much money on our first home to be able to sell it, so we are renting it.

We interviewed some potential property managers and it would take years before we would turn a profit from renting with them, so we decided to go at it alone. I'm getting a lot of interest in the property, but so far no one has returned an application in to me.

Since we are still living in the home, we decided to screen people with the application and background check via Smartmove website first, then allow them to see the home once we see they are not a homicidal maniac. However, not surprisingly, no one has returned an application or submitted their info on the Smartmove website yet. Should we just bite the bullet and let people see the house first? We should be out of this house in a few weeks, and then we would be fine with having people see the house first then apply, but this just seemed the safer way to go.

What do you all think?? I appreciate any advice!

Kelly

David Beard · Answer

Read this, particularly on pre-screening through your ad and phone conversation prior to showing them the property.

http://www.biggerpockets.com/renewsblog/2013/01/27/tenant-screening/

Aaron Yates · Answer

I agree with Navi Veski in regards to needing a good feeling about a client. I do this as well.

I currently have a property advertised on Craigslist and Postlets right now. Yes I get calls but I also get people who don't call and just go right to the online application. This shows they are interested enough to move forward to the next step. I then call and email them back. Sometimes it never goes farther than that. Sometimes I schedule showings. But in any event, I haven't had a no-show since I started this process.

Even if they call, just like a potential client did today, I still required them to fill out the application on my website and schedule a showing which can also be done on my website. then the appointment syncs with my outlook calendar (and my phone after I open outlook on my laptop) and I also receive emails which will allow me to link it to my calendar if I'm not around my computer.

I can't take credit for the online scheduling. That was taught to me by @rob Gillespie - the house guy.

The process I do has worked for me very very well. I also have turned down a better financial client for one that makes less money but gave me that "warm and fuzzy feeling" and I will continue to do that because I want clients who are going to take care of my property

I also like being able to help people. I have really struggled to get where I am in life and without any financial help and not really any family or friend support either. So if can help someone that really needs it and it doesn't hurt me financially then I will do it.

Navi Veski · Answer

Dawn A. gave you a great tip.  Do your marketing and then invite everyone to the open house.  Once you do that, you'll know who is seriously interested.  If you're interested in renting to them, you can send them an application to be completed in full and a link to a credit reporting agency (I use Experian)

There is a great tenant for your house but you have to find them.  Do not listen to stories and explanations just read the facts on the app and contact employers for proof of employment & salary in writing.  Most employers will give you a runaround about not releasing information but they must provide you with info via fax, if not electronically.

Do an open house every weekend and follow the steps and you'll find a great tenant.  I've declined to rent to qualified renters because I didn't get a good feeling about having to deal with them for at least a year.

Good luck to you and your family

Kelly McMahon · Answer

Thank you all for your advice, and thank you Aaron Yates for the link! Tim G. we owe 156K, but our home would probably not sell for more than 130K according to the comps. We do not want to ruin our excellent credit with a short sale. We have to buy a new car soon and want to be able to finance. Our payments including the HOA is $900 a month, we are renting for $1000 with $1500 security deposit. And David Beard I have read that site extensively and have gained a lot of useful information from it.

I guess I was just thinking I was shooting myself in the foot by asking people to pay for and apply before they see the house, because so far no one has filled out the application online for the background check.

However, one couple says they are foster parents and have a fingerprint clearance card from the state which means they have cleared a background check, so I am having them over to the see the house but still plan on making them go through the SmartMove website to fill out that background check. They want to sign a 2 year lease but have a bankruptcy on their past records (which she was very forthcoming about), how do you all feel about bankruptcies? I know evictions are a BIG no no. I just want to make sure their income is stable and is at minimum 3x the monthly rent...correct?

Dawn Anastasi · Answer

One thing I do is have an "open house" type of showing. Then I don't have to do a ton of work in advance and wait for individual people to show up.

Tim G. · Answer

How much do you owe?

What is it worth?

What are your payments?

How much will it rent for?

If you are at any risk at all (please consider taxes, upkeep, vacancies) of paying to have a person live in your home... doing a short sale might be something to consider.

Aaron Yates · Answer

Kelly McMahon, welcome to real estate. Many times people won't even show up to the viewing. What I have done to alleviate this is I do make them fill out a pre-screen app on my company website.

After reviewing it, I determine if they can afford it or not. If numbers don't make sense I check on it and question them.

I call them to talk to them some more and get some more information. Get them to open up a little. Once I feel they might be a good fit then I schedule the showing. This is all in the first call I place to them after getting their application.

If they like it and want to move forward, I then email them a link and they are required to run their background for me. They pay for it.

If they pass this, I then take the deposit and sign a lease. This has helped tremendously to weed out tire kickers.

So if you are not getting apps, then maybe they are tire kickers or the app is too difficult.

Here is a link to my site pre-screen app for you to check out:
Mobile link is m.ckiproperties.com/Rental-Pre-Screen-App.html

Web link is http://www.ckiproperties.com/Rental-Pre-Screen-App.html

good luck and hope this helps

Newbie screening tenants, am I doing this right??

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