How long does it take to find a qualified tenant?

[Chandra Faulk]

I am in the Oklahoma area. How long does it take to screen a tenant and find a qualified one for LTR? We have had our house listed for rent for 1 month now, and have not found a qualified tenant. We are using RentRedi for screening. We have lots of interest and showings, so we feel our rental rate is right at market. There just seems to be a lot of credit and/or background issues with prospective tenants. We list on Marketplace, Zilllow, Realtor, etc.

[Kevin Sobilo]

@Chandra Faulk, a few things to think about:

1. EVERY applicant is "qualified"! Sounds crazy, I know.

Pretend its a perfect world where there are exactly as many rentals as tenants. That means that if you are a landlord of lower end rental you will be accepting that applicant with felony convictions, bad credit, and evictions!

2. Yes, #1 isn't exactly true, but it makes a point that not every landlord and rental can expect to get an A/B class tenant. There is a space for C and in some cases even D class tenants.

3. Credit! I don't take a credit score as a reliable metric in my market. I'm in a very blue collar working class market. Many tenants are still very unsophisticated with money. Also, many tenants are younger and have limited credit history. So, even a small negative like a $50 unpaid cell phone bill that goes to collections when you switch carriers tanks their score.

So, I consider credit a little more pragmatically. If the score is good, its an easy "yes". If the score is low, I look at why and will ask follow-up questions. If the score does not seem to be backed up by enough credit history to be reliable, I will make a judgement about the tenant's level of responsibility based on their answers. If the tenant has no score at all, I will do the same. Keep in mind those people will live somewhere and SOME of them will be good tenants!

4. What is "market rent". Many landlords think of it as the HIGHEST end of rent prices for comparable rentals.

Most times landlords don't have data or cannot adequately factor in vacancy time or turnover rate. If the higher end rent prices on comparable units take an extra month to fill the vacancy and also the tenant stays 1-2 years instead of 3-4 years on average those landlord make LESS income charging that rental price ESPECIALLY if they pay a PM a placement fee upon turnover on top.

I consider market rent the price at which I can READILY find a good tenant and KEEP that tenant. I budget for 2 year average tenant stays and work to exceed that conservative budgeted rate. 

5. For reference, I expect a turnover to take me 4-6 weeks. That means I expect to find a tenant within 2-3 weeks and expect them to move in 2-3 weeks after that on average. I expect to have at least a few decent applicants in that initial 2-3 weeks. 

6. To bring in more people, I do NOT pre-screen before showings, BUT I only do open house showings. I do them twice per week. Once mid week in the afternoon/evening and one on the weekend around midday.

This saves me a lot of communication time as I only need to respond to inquiries with cut and paste responses with the open house day/time and I only need to show the rental twice a week.

7. Applicants are sensitive to application fees, so I use zillow for applications because they will see 2 things. One is that I don't collect a penny of the fee. Second is that they can re-use that application for 30 days to submit to other landlords on zillow at no cost.

I think acknowledging the difficulties tenant's face sets you apart from other landlords. After COVID applicants were having to submit 10-15 applications on average in my market to secure a rental meaning they might pay a whole months rent or more in application fees!