All Forum Posts by: Constantia Petrou

Hello everyone,

I own class A property in the SF Bay and hit sort of a rough patch with a rather long vacancy. We've had quite a few applications but none qualified. We are now evaluating an application from a couple that seems reasonable and do meet our requirements but we have no confidence they will rent from us for at least 2 years (which is what we are aiming for). They say they will rent for 2+ years but their savings are growing very fast and at this rate they will have the down payment to buy a house in one year. They are leaving their current rental after 1 year because their current landlord needs the house for himself- otherwise they would have renewed the lease for one more year.  Their past rental history shows 2 years per rental and since they have already stayed for 1 year in another place there's only 1 year left before they would want to move again (based on past pattern). I'd appreciate your feedback on the following:

1) Is there anything we can ask of the tenants to gain confidence that what they say about a 2+ year tenancy is indeed the truth? 

2) If we take on a 1 year tenant (for a second time-- we did it last year and regret it) the house will likely get on the fast turnover track since people always ask how long past tenants stayed, and if tenants don't stay more than 1 year most assume that there's something wrong with the house or with us as landlords. Any thoughts on this?

Many thanks

Thanks both for your input! Nathan, where is the BP ROI calculator you are referring to? Thank you!

Hi everyone,

I am facing a very slow rental market and a lot of difficulty finding the high quality, long term tenants I used to be able to get up to now (Class A property in great neighborhood). Though I have the funds to cover a long vacancy the experience I have had with so many unqualified prospects has been draining and demoralizing, which got me contemplating the possibility of selling. I have no interest in renting to short term or unqualified tenants-- in fact I prefer to keep the property vacant. I have run the financial models and the appreciation of the property alone (assuming 100% vacancy) supports a solid ROI if I hold the property for 25 years (granted under certain assumptions which are based on historical data). However, holding on to vacant property for prolonged periods of time carries its own risks (I have read about squatters, for example, here on BP-- though I doubt this would happen in my type neighborhood). I would appreciate any feedback on the factors you consider when exiting a RE investment and how to know that it is indeed the time to sell. Thank you

Hello all,

I have been screening for a quality tenant for my vacant property for a while and a couple who seem to have loved the place and who came out as friendly and respectful during the visit applied. All the financials look good and meet our requirements. The issue is the references. Two independent professional references for the husband gave two statements that both point to a difficult personality: 1) Employer had difficult/ tough conversations (when he didn't get what he wanted) and 2)He doesn't get along with people who have strong opinions and got into  a few heated arguments at work and at the end he apologized. On the one hand I am thinking about contacting the applicant to discuss our concerns and assess his personality from the way he responds, and make a decision after that (since he gave a positive impression during the visit). On the other hand, In the past we accepted a tenant with a negative reference regarding their personality and that decision was to our detriment, so perhaps the best thing to do is deny the applicant and continue looking. Any thoughts from your experience? Thank you

Yes, the issue is that I think that I may be getting worse tenants because zillow shows the house on the market for a while and they think we are desperate. However, taking it off zillow for a few days will not help. Zillow keeps the history and does not reset the "clock". In any case I decided to keep it on and keep screening until the right high quality tenant comes through. Thank you all for your input

Re Michael's comment- yes, we are listed on zillow, which shows the date the property was first listed. Thanks for your suggestion but our strategy is not to go for so-so tenants or for quick turnover just to get the property filled. We are in a good financial position.

Brad, thanks for the input. Yes we will not settle for anyone sub-par. So-so tenants are very costly (we have found that from experience) both financially and in terms of time commitment and stress. Great tenants are definitely worth the wait. Our property is fairly priced and in much better condition than the competition. Our marketing material is high quality with professional pictures and the feedback we've had from viewings has been "wow". It's just that in soft market conditions, sub-par candidates feel they can push the landlord around and "force" their way into our property by hiding what does not meet our criteria, which of course upon screening it all gets revealed, or in some cases even by threatening. 

Thanks Theo but we tried that and the quality of tenants a lower price attracts is truly a nightmare. Would rather keep it vacant rather than rent to low quality tenants.

Anthony, thanks for your thoughts. I am leaning that way too- keep it on and just keep screening. Any other thoughts from other members are always appreciated

Hello,

The rental market in my area (SF bay area) has softened a lot. It is not just price and longer vacancy. The worst of it is the quality of tenants. My property (Class A in a beautiful neighborhood) has been on the market for 3 months and though we have had several applications, none qualified (both in terms of financials as well as references that uncovered major issues with past landlords and employers). The rate at which I am getting calls has started to slow in the past 2 weeks and the people who called are very sketchy, arrogant and unqualified (based on the prescreen).  I expect things to slow even more as we approach Thanksgiving and December. I am debating whether I should take it off market until January. I am thinking that perhaps the market will clear from all the left-over candidates who think we are desperate because the house has been on the market for a while (We are not desperate. I don't mind the long vacancy. We have the funds to cover it and the house cash flows well when rented, not to mention the property appreciation in my area which definitely calls for an empty house rather than rented to a bad tenant). On the other hand, we found one of our past best tenants in December and I don't want to miss the opportunity of a good tenant who is looking even in the slow period. Any thoughts?

Thank you all for the feedback. Very helpful. Have already rejected them. What a nightmare!

I do want to get back to Sam's comment because I have indeed experienced that the more educated ones are the worst applicants to handle. They have no respect for boundaries and they feel entitled to be served by the landlord. I can "smell" them the moment they walk in the house to view. Just the way they behave around the house, the way they open every cabinet and appliance door to check everything- it feels like an inspection not a viewing (many of them start with requests before they even apply). So my question is how do I discourage these types from applying. So if I don't feel I can have a good working relationship with them when they visit how do I stop them from applying in a way that I am legally covered? So far I felt I need to give an application if they ask and then go through the review process until I find hard core facts to have the basis to reject. Of course the more I get into the process the more upset they get when they are rejected and I get bullied after a rejection. So how can I reject pain in the neck prospects early on in a legal way when it is based on my subjective evaluation of the visit? Thank you all again! 

Based on references I talked to they will not only be demanding but they will also nickle and dime me! How do I reject based on the fact that it seems we are just not a good fit?