How do you reply to and deny potential tenants

Question

Hello!

I’m new to the Bigger Pockets Community as well as property management. I have been reading Brandon and Heather Turners “The Book on Managing Rental Properties” and have found it extremely helpful.

I just have a few questions I hope that can get answered for me.

I have been receiving a ton of interest in our unit and I want to know if there’s an obligation to reply to everyone? It may seem like a silly question but it’s really more about the laws that concern me. For instance, our property is in Arizona and section 8 is not protected however if someone asks me if we allow section 8? Am I required to answer to them?

My second question is, do you have to send everyone who applied a denial letter? I understand that if we deny someone based off of a consumer report you must provide them with that information. However, if we find an applicant who meets all requirements but we decide to rent to another how do you properly deny them?

Thank you for your time!

Kelsey

Zach Westerfield · Answer

I rent to the "the first qualified tenant who applies". step one of my process is an initial screener of 6 questions (usually via email). When someone reaches out to inquire about a property, i send the same response everytime.

Tenant: "is the property still available?"

Me: "Yes it is. if you are interested, please answer the following questions:
1. Why are you looking for a place now?
2. How many people will be living in the residence (children included)?
3. Does anyone smoke? (Our properties are smoke free)
4. Do you have pets or animals?
5. What is your currently monthly income before taxes?
6. Have you ever been evicted (unlawful detainer)?"

only about 25% of people answer these. If they have a disqualifying factor such as they dont have enough income (3x rent), i respond "sorry, but we require 3x rent". if they pass this, i move on to the next step with

"Thank you for your reply.

The next step of our process is to complete an application package, which you will receive shortly via Docusign.

Please completely fill out the application and return it to us. Once received, we will submit your name for a credit and background check. You will receive an email notification for payment for the service ($40, we do not receive the fee, that goes directly to the screening service). Please note we will not consider your application until the payment is received.

We will review applications in the order received and will select the first qualified candidate. Paying the application fee does not guarantee selection, however we do not submit for the background check until the application is deemed qualified, so as to minimize charges.

If you have any questions or concerns, don’t hesitate to contact us."

maybe 1 in 5 that get to this step finish the application. of those, most are usually qualified. If they are not, i respond with "sorry, but you did not qualify due to XXX". Its important to have you criteria established to be fair across the board. it also makes it easier, because the rules are the rules. either they meet the criteria or they dont.

So far ive never had an issue with denying a tenant. In fact, 95% weed themselves out by not completing the steps. Those that do are usually good. If i have multiple apply at once, i note the time stamp of when their application is submitted, and that locks their position in line. if the person in front does not qualify or backs out, the next person in line is considered.

Colleen F. · Answer

Some people show after pre-screening and before application.   Others choose to show only to people who have filled out the application (and may do no pre-screening). Always pre-screen before showing  and then whichever is more common in your area and you are comfortable with regarding the application.   If a house is less of a cookie cutter or has a  location or layout that might be an issue for some people I think you are better off showing pre-application.  you can say all you want in an ad but people don't read them.

Joe Splitrock · Answer

Account Closed if you contacted a business with a question, applied to rent a property or applied for a loan, would you expect the business to respond? I would argue it is not only a courtesy, but also best business practice to respond.

Some people have trouble saying no and I assure you as a landlord, you better get used to the word. "Do you accept section 8?" Answer, "No I am sorry we do not." Keep it short, factual and polite. "I am sorry we are unable to approve your application at this time due to XYZ reason. "

As others suggested, prescreening will reduce your showings and focus only on qualified tenants. Pre-screening starts in your property listing. It should state in the listing "Section 8 not accepted." It should state in the listing, "Monthly household income of 3 times rent required." Put your requirements out there and it will cut down on the number of calls you get. You don't want more calls, you want better qualified only contacting you.

My recommendation is to go with the first qualified applicant, so you avoid choosing between applicants. Nobody can argue "first come first serve" as being discriminatory.

The most important thing to be careful with is fair housing regulations. Read fair housing guidelines on federal, state and city websites. They will explain "do and do nots" when it comes to protected class. For example, you cannot ask someone how many children they have. You cannot advertise a property as "great for students", because it implies you do not want families. You also need to accept certain animals, even if you have a no pets policy due to medical reasons. These are just a couple examples. Fair housing is a half or full day class if you attend training.

Zach Westerfield · Answer

@Kelsey Versluis First make sure they are getting the questions. Are you responding through zillow? sometimes the emails get crossed that way. If they are...

Like you mentioned, I dont waste my time with people who can't follow instructions. I generally assume if they dont answer the questions, then they have something to hide. I greatly value my time, so I really dont like when people waste it just to see a property or because they are curious. Also, being consistent is key to maintaining fair standards as a landlord. If you require one person answer the questions before viewing, then everyone must.

Account Closed · Answer

@Steve Morris

Yes, I have created a “script” so I am replying to everyone in the same manner. The last thing I want is to say the wrong thing.

Account Closed · Answer

@Zach Westerfield

Thank you! This is extremely helpful. Where do you fit in showing the property?

This property is brand new and is still in the closing process. There have been a couple people who have already applied without even emailing me first, however I don’t feel comfortable renting to someone who doesn’t see the place first.

Lynnette E. · Answer

Not at all.  Rent to the one who completed the process.

Steve Morris · Answer

If people don't fill out an application and you've made it available along with the opportunity to pay a fee, I'd leave it at that beyond the bare min:

1) More you say, the more "gotchas"

2) You need to tell EVERYONE the same story, saying less makes it easier

I wish it was otherwise, but there are plenty of tenant attys out there and as a landlord, you don't get ONE screw-up if you have to go to the mat.

Drew Sygit · Answer

Most prospects understand more is expected of them these days due to COVID concerns. So, don't be afraid to increase your pre-screening and avoid wasting your time.

Zach Westerfield · Answer

i show any time after prescreening. I use a lock box, and require picture of drivers license and phone number. then i send them the lock box code, with instructions to only see it between the ours of 7 am and 7 pm, to lock up after, and to let me know when they are done. I say someone will be by afterwards to check up.

How do you reply to and deny potential tenants

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