Finding Good Tenants: When Less is More

by Chris on September 2, 2013

Finding the right tenant is a numbers game — at least in theory. The more applicants you attract, the higher the likelihood that several of those will be good prospects. Or, at least it would seem.

But in practice, when finding a tenant, less can be more. Consider how long it takes to answer dozens of questions over the phone, or to sort and prioritize several rental applications, when all you need is one interested and qualified tenant. Fewer unqualified renters to reject and fewer applications to ponder means less time wasted — and more profit realized.

The perfect solution is to strike a balance by targeting those renters most likely to be a fit for the property.

Tenant Screening: Think Local

One of the best tricks for finding quality tenants who will want to stay for the duration of the lease is to choose someone who has a connection to the neighboring area, like work or schools.

tenant screeningWhile online ads are enticing — after all, these are free to use and cast a wide net — they also can capture scores of unqualified renters. This is especially true when vacancy rates fall. Many of those applicants will call without any recollection of which ad they responded to, or where your particular property is located. A prospect like that may be more of a risk.

Don’t let online ads prevent you from using other valuable tools at your disposal. Nurturing tenant referrals is a far more targeted and successful approach to finding your next tenant. The same is true of referrals from other residents in the surrounding neighborhood who may have seen your ‘for rent’ sign or a flyer on a community bulletin board. That same flyer placed at local schools or employers can generate a steady flow of qualified candidates who are keenly interested in the property.

Looking at local options doesn’t mean you have to rent only to natives. A person does have to be from the area to be a good tenant. But if an applicant has an interest in the location first, and then the property, the chances for a successful tenancy are increased.

Are Your Turning Away Good Rental Prospects?

View every tenant as a blank slate. It’s simply not cost effective to pass on qualified applicants because you are holding out for the “ideal” tenant. That ideal may not be realistic. There is no one-size-fits-all when it comes to the right tenant. For instance, the young professional you envisioned as the perfect fit for your property may be too distracted with work to care for the property, or turns out to be noisy, or overly demanding. The young family or senior citizen that you turned away could have been the perfect fit.

The same is true of leasing policies that scare away good prospects. For instance, surveys have shown a strong demand for smoke-free rental housing. Smoke-free housing is so popular that tobacco-free advocates offer free rental listings to landlords who enforce no-smoking bans.

Studies prove that more than half of renters want to keep a pet. With some retrofitting, it is possible to pet-proof rental properties to minimize the risk of damage from pets. Pet-friendly amenities like a dog walking area onsite can put you in the center of this popular trend.

By offering tenants what they want, you avoid chasing away the best prospects.

Show You Are There to Serve

Keep in mind that the tenant interview goes both ways. Tenants are looking for more than a roof over their heads — they are looking for good service from the landlord. Convey your enthusiasm for the property, and set a good example by caring for it. By spelling out rules of conduct, prospective tenants see that you run a tight ship — and that goes a long way towards building a good reputation. Then, the process becomes circular. The better you are at your job, the more tenants who will offer referrals, and the less time you have to spend filling vacancies.

Landlord Tip: Regardless of how you find your new tenants, don’t neglect to conduct a tenant background check, including credit checks and previous landlord references. The new tenants could be hiding something, even from their closest friends.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

{ 4 comments… read them below or add one }

Shawn Lajeunesse September 3, 2013 at 5:11 am

hello

i am a small landlord.

i signed a lease with a new tenant last month.

the tenant was about to move it, and then decided not to.

1/ the tenant wants me to return the last month’s rent and leave.

can they do that? do i owe them that?

i feel that they at least need to pay me 2 months to cover 60 days notice.

at the very least, i feel that i should be able to keep the last month’s rent because i won’t be able to rent out the property for this month.

hope you can help. it’s very stressful!

Shawn

Elizabeth September 3, 2013 at 8:20 am

I completely agree. I set up “hurdles” to prospective tenants to protect my time and eliminate those likely to not be detail oriented, follow instructions or generally make any effort be good tenants.

1) I set up an email account specifically for the property (e.g. rent555Park at gmail, yahoo, etc.).

2) I create an email (and save as a draft) with detailed property description including:
– desirable features (off-street parking, W/D, lots of storage),
– photos,
– what rent does and doesn’t include,
– other FAQs with answers,
– the application process (fee + background check (from TVS!)) and
– a copy of my rental application (and FCRA doc) so they know what they will have to provide if they want to apply (I believe this eliminates a lot of lookers with questionable backgrounds).

I end with a request for them to reply:
a) with any questions they have that aren’t covered and
b) to set up an appointment if they are still interested.

When I receive an inquiry, I all I have to do it copy and paste the draft email into a reply. Of course, I tailor the response a bit if the inquiry has specific questions that aren’t covered (and I update my FAQs if appropriate, which saves a lot of back and forth in the future).

3) I post signs on the property with the email address only (NO phone #) and basic features (3 BR, 1 BA, 1,000 sf, W/D, pet friendly, available 8/1, $975). I find that most of my leads come from people who are looking in the specific neighborhood already so I don’t have to explain where the property is or how desirable the area is.

4) I post on Craigslist, but use similar guidelines: no phone number, include all the detailed info from the email, upload photos, and use the custom property email address for replies. Always include a map if you are comfortable doing that, or at least the nearest cross intersection and landmarks (e.g. “near Willow Oaks Mall”). I find that the most frequently asked question from these postings is “Where is it?”. (If I’ve included the address, a area description and/or a map and they ask this… I start to wonder.)

5) I copy and paste the email I created in #2 in the reply to inquiries and wait for them to self-select who wants to see the property and I make an appointment to show.

I have used this process for more than 10 years and found that I do indeed get fewer inquiries, but they are of much higher quality than before I implemented it. And I agree that it sends a message that I am professional, prompt to respond with clear information and that is the expectation of my tenants.

Happy and successful landlording!

Dan September 3, 2013 at 10:09 am

Shawn, you should be entitled to something. I usually have the prospective tenant sign a document stating that their deposit is non-refundable in the event they do not move into the property. If I am going to remove it from the market for the next several weeks for them, they have to have something at stake too. Unfortunately, if you don’t have that in writing, it may be hard to enforce. You can ask for their deposit, but if they push, you will have to return it. I hope that helps a little.

Fran September 3, 2013 at 3:54 pm

This is what I do. If an applicant signs the lease weeks ahead of move-in date, I have them pay the security deposit on signing, and put down in the contract “Should Tenant decide to cancel contract prior to move-in, the security deposit will be refunded less the equivalence of rent for the time lapsed between contract date and cancellation date.” That compensates me for time lost, and gives them the incentive to cancel earlier than later. I also know some landlords use a flat fee, like $500 to hold the place for them and refund it or apply to security deposit when they move in.
But like Dan said, everything has to be in writing.

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