All Forum Posts by: Paul Ronto

I don't believe you run a credit check on an LLC, you have to run it on an actual person. SmartMove is a great product which is why we partnered with them, they offer integrated screening with credit, criminal and eviction reporting, which is pretty all inclusive and a great resource for landlords, but again, it has to be run on a person, usually through their SS number.

The real concern here, which has been stated, is that if they want to break the lease, if the LLC has no assets they can just break the lease and walk and you have no recourse. So again, be sure to have them personally sign as a co-signer if you have to go down this route.

Personally, I would probably refuse to sign the lease this way, there are too many what-ifs. If you are desperate to get a renter into the property maybe you have to be flexible like this, but if you are not desperate, tell the renter this is non-negotiable, or keep looking for other potential renters. 

It's always a good idea to have your acceptance criteria set up and then stick to them, otherwise, you may be opening yourself up to trouble...  

The friends and family route can eventually get you into trouble since you are technically selling them a service. So be careful there, PayPal will eventually want their cut. There are some vendor protections with the goods and services side of paypal as well that you may want to protect you should the tenant decide to charge back, which on most CCs can be up to 180 days after a payment is made, so be careful, a sketchy tenant could recall their payments up to 6 months after making them if there's something they feel they were not receiving that they should have been. There are services that allow you to collect rent easily online for free that are much safer for landlords. 

@Amil D. , you need to define what your goals are first. Is it to build equity and worth, or have a cash stream and so forth. Then you need to set your acceptance criteria for who can rent from you. Setting specific standards really helps when you start screening tenants. There's a lot you can request of a potential tenant, but remember that rental housing is governed by HUD and the Fair Housing Act, so be sure you are not violating any local or federal housing laws, do your homework on this for your locality.

As for getting responsible tenants, the best way to ensure you find the best renters for your property is to take screening seriously. I recommend a host of things from incorporating an official application process to collecting official screening reports including credit, criminal and eviction reports. I would also say it's important to call references both current and past landlords and current employers and be sure to know what questions to ask beforehand as well.

You can set your criteria to weed red flags out along this process. If there's still a concern with a tenant but you want to move forward with them, you could always require a cosigner too.

Some bare minimum requirement at my rentals are the tenants collectively have to earn 3x income compared to the cost of rent. They must h ave a minimum of 600 credit score and so on. You can make this as stringent as you want as long as you are within the fair housing laws. 

The best way to be successful as a landlord is to find good tenants, so be diligent, if you have a nice place, you'll find renters that you enjoy working with. 

Good luck, let me know if you have any other questions, feel free to direct message me if you'd like.  

I own and rent property in a college town, so this is the norm, not the exception. Students always bail and I never hear back and I get stuck at the property just waiting around. So over the years, I've adopted an open house type strategy. I tell all prospects that call or email throughout the week that there will be an open house on Saturday from 1-3. Everyone is encouraged to come to that one timeslot. I tell them we have lots of interested parties and by the weekend we usually do. Everyone can come tour the property on their own time and if they bail or can't make that time it's usually not a big deal since there are a handful of other groups that will and do show up. At the open house, I hand out slips of paper with the property URL where, if they are serious about the property, can apply easily online. From there I weed out the ones that don't meet my criteria and set up a time to sign a lease with my top choice. 

I've been doing it this way for about 5 years now, I haven't done a solo showing in ages, it saves me a ton of time, drives competition for my units and I usually have them all rented within a week or two of listing them. 

I'm in a strong rental market, but I would assume that this would work elsewhere as well, you may just need to stretch out your open house marketing timeline a little to get more interest before you actually host the open house. 

RED FLAG. I would not feel comfortable with this. Sounds a bit like your agent is not looking out for your best interests and only concerned with a pay day. Renting to tenants without a full screening is pretty scary, and relying on the word of someone who is poised to make money off this deal is even more alarming. 

They may end up being great tenants, but if they are unwilling to submit credit, criminal and eviction reports I would keep looking. Also, 12% commission for a PM seems a little high, I think you could get that lower, 8-10% is more realistic, especially with all the online tools that help you do this for free, just my personal thought on that, but seems steep especially since they don't seem to have your best interests as their top priority. 

Feel free to reach out directly if you want to chat more in-depth about this or have any other questions. Happy to help. 

Well said @Kristie Eddy . I really think the risks with college students are similar to non-student renters. They may do damage but so will anyone, and that's why you take a deposit. We have no problem having new carpet installed every year if the renters pay for it. It actually makes renting the property easier in the long run if we constantly have to update it. And if you find tenants early you'll find the responsible ones. If you wait until the month your property comes vacant to find new renters, you'll likely have issues, but that's the same with non-students as well. 

Anyway, I say go for it, my experience is similar to Kristie's, so far we've yet to have major issues with students, just small cosmetic things which are easy to deal with. 

Like @Phillip Faries stated, I think having some basic acceptance criteria in your property listing helps to weed out a lot of people that wouldn't qualify. My recommendation is when you have people show interest, do some quick initial phone screening, then if they pass and are still interested set up a showing. 

If they are wanting to move forward after the showing, then start the application process. I ditched paper long ago, it's just too time-consuming to print it, hand it out, collect it, go through it, and then have to ask tenants to also submit another form for screening reports. Check out the software out there that integrates all this, application and screening reports into one easy online system. 

Skipping this step is a big red flag, we've all done it probably because it's a hassle, but with the software out there now you have no excuse and the better you screen your potential tenants the easier your job as a landlord will get. There's good free software out there, use it. 

Good luck, and let me know if you have any questions, feel free to reach out directly if you want to chat. 

@Christopher Neil  There are a few products out there that do a lot of different things. Look around a bit, there are free options that are very close if not identical to the paid options. The most important thing is that you find a software that has all you need to help you manage your properties from one easy platform.     

Popular features that you should keep an eye out for that will help you with 40 units are integrated listing syndication, customizable online applications, integrated screening reports including credit, criminal and eviction and online rent collection. Again all of these are free to landlords on some platforms, others charge either monthly or per unit so shop around a bit to find one that fits your budget. 

To echo the comments above, I live and landlord in a university town and love it! There is a never-ending stream of potential renters, parents are happy to co-sign, the market is competitive so you can price property well, and although college students can be destructive, so can anyone else. You still need to vet and screen tenants thoroughly, if they don't have a credit history, ask the parents to apply as well. Call student's references like past landlords, dorm RA, employees. There are a lot of responsible students out there. I would never offer a lease that excluded the summer months here, we get 12 month or 24 months leases, and if students are gone over the summer they are still responsible for paying rent and maintaining the property, like hiring a lawn care company. If you offer 9 month leases you may be shooting yourself in the foot. Also it's always a good idea to get the property leased in the spring before students leave for the summer. My leases all start on August 1, but I start showing in March and have everything leased and signed by May 15 before summer break officially kicks in. 

My opinion is that college rentals are a great investment, property around a college campus usually holds value well, and your only risk is if the college closes down. Pick a major public university town and you shouldn't have vacancy for the next 100 years... 

Let me know if you have other questions and good luck!

@Brendan L. So what I do when someone emails me off a listing, I have a checklist of questions I ask them before we ever talk about a showing. If they meet my criteria in that initial phone call we set up a showing and go from there. At the end of the showing if they are interested in moving forward with the property then I have them apply, I pull screening reports and things get more formal. 

Setting rental criteria that weeds tenants out is not discrimination as long as it is in line with fair housing rule. So questions I ask initially are:

1. Is this rental for you or someone else?

2. Why are you moving?

3. What is your planned move-in date?

4. How many people do you plan on living with?

5. What is your current monthly income?

5. Can you provide employer and landlord references?

7. Are you willing to submit a credit, criminal and eviction check?

These usually help me narrow down the amount of people interested in my properties. I live in a college town so I get a dozen inquiries a day on vacant or soon-to-be vacant properties so I have to have a way to narrow it to people that meet my criteria like 3x income/monthly rent, 3 or less unrelated people living in a property (City ordinance), move-in dates, willingness to do a credit check and so on. These all take about 2 minutes to go through and really help with pre-screening and like I said, if these all lineup, then it's on to the showing. Hope that helps. 

Let me know if you have any other questions! Good luck.