Finding GREAT tenants.
A saying I once heard was ' the only bad thing about rental houses is the tenants'. I laughed when I heard it because of the irony in this statement, I somewhat agree but in a different context, rental houses become bad news when you have bad tenants, this would be a more true statement.
How can you avoid this? Can you avoid this?
As an owner of multiple rental houses and a property manager for many more I have probably made 99% of the mistakes already and seen all types of excuses from tenants. At one time I said to a tenant who was trying to speak to me about 'why' he couldn't pay his rent, "if you can give me an excuse I have never heard before, I'll let you have this month for free!" Needless to say he didn't get that month for free.
Now over time and with coaching and mentoring from people who were more experienced than me I learned a lot of valuable information and ill share some of those here now.
Its not a hobby it is a BUSINESS and you should treat it as such.
They are not tenants they are clients who pay you between 10,000-20,000 per year into your business and you should treat them as such.
Teach people how to treat you from day one!
NEVER lose your cool regardless of how your client is reacting, there is always a solution.
Screen and check your tenants so you only have the clients you want to work with
Be nice, if you have a good client, treat them as any other business would with a client who pays 20k into their business, Xmas and birthday cards are a good start.
They are your clients NOT your friends - remember this, be friendly but not best pals
Now onto the business of finding great clients - first of all who are the clients you want to deal with? Single professionals, small families, large families, retired couples/singles, and then make sure your house matches the client. I have had owners with 5/6 bedroom houses tell me they only want single professionals and couples, how many single people do you know who want a 6 bed house?
Once identified who you want as a client, where do they look to rent? If you want a retiree probably not going to look on the latest social media outlet for a rental, likewise if you want young professional they are probably not reading the paper so make lists of the types of people and where they would spend their time looking.
BE VERY CLEAR in the ad the steps you want them to take to contact you, I personally have them either email me @ (give email you want to use), I would recommend setting one up for rentals specifically so it doesn't get mixed with personal, or phone me at xxxxxx. You would be amazed how many people do not read the ad and then i get a Facebook message and all it says is 'hey interested'. Needless to say you can very quickly eliminate them from potential clients for your rental.
Next I agree a time for viewings with potential people ONLY OVER THE PHONE, I must speak with the person before arranging a time so i can ask them questions. MAKE NOTES WHEN YOU DO
Where do you work - (how is rent getting paid, I don't mind government checks but they must come direct to me)
Why are you moving from where your at (see what they complain about) and then verify its the same with current landlord.
Where did you live previous to the current address, why did you leave there?
Tell me about yourself? - A chance for them to talk (let them - then verify later at showing that it all matches up when you bring it up)
What time works best for you I have (I give them a lunch time and an evening time to choose from) the reason for this is they arrange around your time not vice versa - you are teaching them how to treat you, if you start by bending to them and running around after them it will always be this way. If they truly want the place they will be resourceful, and hopefully if they have issues with rent they will be resourceful instead of just asking bank of landlord for a loan!
Then we do the viewings, ensure the house is ready, clean, nothing broken and presentable, we view the houses in groups all at the same time (this saves you time and creates a sense of urgency, and prevents you from the no-shows, there will be some). We also do not walk round saying "this is the bathroom etc" they can see its a bathroom, we let them walk round and we wait in the kitchen letting them know we are there for questions and with applications if they are interested.
The application asks the same questions we asked on the phone with a few more details (for a copy of our application for we use please email us and ask we will gladly share)
Check references AND social media, we have a rule that if you become a tenant we must be connected on social media. We sometimes do credit checks but it depends on your market and tenant profile. We ask if they mind if we do police checks (but never do) this makes them usually not apply OR they tell you about the time they got busted smoking weed in college 15 years ago.
Ask the same questions you asked on the phone, are the reasons consistent with the notes you made, they should be if not a red flag goes up in my head.
Does anyone else know them in your community? this doesn't mean they are great tenants just because they are a great guy or girl in the community, we got burned on this so just beware but its a help for you to make the judgement.
Now make the decision, if you find you are not good at this and your 'too nice' or you fall for the heart felt stories then i would recommend getting someone to help you, either a property manager or a another landlord you know to help you in this process. Now you have a great tenant MANAGE them like they are your best client.
This is an 'art' or a 'process' and some people are great at it and others are not, the thing to ensure your property stays a good investment and you have great tenants is to know your limits and either educate and train yourself, OR get someone who is already trained. After all it is your future that gets effected if it doesn't work out not theirs.
If you would like to do our short education program on tenant and property profiling we have a proven system at Rental House Profits that can teach you the process and give you some great checklists and forms to use. To enquire about this please CLICK HERE and we will be in touch and help you save THOUSANDS in lost revenues and mistakes. This program is reduced to $197 from $597 with the code: RHPBLOG197, please mention this when you email us.