Whether you’ve just purchased your first investment property or you’ve been renting homes for years, finding great tenants should always be one of your top priorities. This feels like it is easier said than done. While it’s nearly impossible to avoid a bad apple here and there, these tips will help you ensure that you are consistently finding the best tenants for your rental property.
Know Where to Advertise
We live in a digital age where most of our potential tenants are searching for rentals online, with many of them starting their search on Craigslist. While advertising your rentals for free on Craigslist may seem like an effective choice, our experience has been that you don’t always get the best applicants. Craigslist responders are often professional surfers. They respond to dozens of ads and then you never hear from them again. Or you do and maybe wish that you hadn’t. Now don’t get us wrong – you can find great tenants on Craigslist. However, we recommend utilizing other websites in tandem. The more websites you are advertising on, the wider your rental net is being thrown. Some of our favorites are:
Here at Riverbend, our property management software system allows us to post vacancies to more than 100 websites with a single click, offering the most exposure for the least amount of cost. We also manually post to Craigslist to get the most out of the tools and resources available to us.
So you’ve posted your advertisements online, in the newspaper, and other local print media, and your phones are lit up with prospective tenants calling for more information. Now what? We like to start with asking a handful of questions that will often help us whittle down the list of candidates before we get too far into the process. Try using these tried and true questions:
Are you looking for yourself, one person? This will often tell you if the applicant is a single professional or a bunch of recently graduated frat boys.
CAUTION: Fair Housing laws do not allow landlords to discriminate based on race, gender, sex, religion, disability, student status, familial status, etc.
Do you have any pets? Many of the people who contact you have pets, which is absolutely fine if your properties allow them. If you don’t, asking this question up front will save you a lot of time. If you do allow pets, take this opportunity to find out more about their furry companions. Be sure that you are informed of your State and local laws regarding service animals.
When do you need to occupy a unit? Prospective applicants don’t always notice the availability date on your advertisements. They may want something tomorrow or six months from now. Starting with this question will help you find applicants who need a home at the exact time that you have one available.
Are you currently renting? If so, where? With whom and for how long? When does your lease expire? Why are you leaving? This short series of questions will tell you a lot about the applicant. Are they breaking a lease? Are they moving to be closer to work or family? Finding out why they are making a change will give you a lot of insight into the type of tenant they are. Feel free to ask them if they have a favorable rental history; they will generally tell you about any issues they have had but only if you ask the question.
Are you currently working? If so, where and for how long? As with the question above, it will provide a lot of information about your applicant and help you determine if they can afford your rental. You want to be sure that their monthly net income is at least three times the rent amount. You can absolutely ask if they feel their credit and financial background will meet your standards. Usually they will tell you about any negative issues if you ask the question.
Meet in Person
Our best advice is to always meet your applicants in person. You can learn a lot about more about them chatting face-to-face than you will ever get from an application. Again, be very careful about disqualifying applicants based on your first impression to ensure that you are legally compliant.
Create a Thorough Application
The rental application is what you’ll use to collect personal information about the applicant and co-applicants. Applications should request the names of all adults who will be residing on the property, social security numbers, previous addresses, drivers license numbers, income sources and amounts, number of pets and their breeds, employer contacts and job title, references (non-family).
We personally do not ask for information about an applicant’s minor children, as familial status is not legally relevant, though you may choose to do so. We do, however, request a copy of the applicant’s driver’s license and proof of income, such as pay stub or W2. They are able to submit a photo of these items online using our electronic application system, which makes gathering and storing this information really simple.
Pro Tip: Be sure that your application clearly gives you permission to call their references and perform a credit and background check. You will also want a disclaimer stating that applicants may be rejected for providing false information.
Reminder: If you’re collecting personal identifying information (PII), be sure you’re keeping it in a secure location. Locks on your file cabinets are an absolute must, as well as locking your phone and computers if you’re keeping records electronically.
References & Background Checks
You’ve taken the time to ask for references – now be sure to check them. Even if the applicant seems like the greatest tenant you’ve ever met, you just never know what a previous landlord or employer will tell you. Just be careful when you’re checking rental references and the questions you’re asking – it’s easy to find yourself in legal trouble if you don’t know the housing laws in your area.
Background checks are also crucial to finding the best tenants. While you can typically do local criminal searches for free, such as on CCAP in Wisconsin, doing only your local area could be a huge mistake. Applicants are not always up front about their criminal history so a thorough search is necessary.
You’ll also want credit scores and reports. These can be costly to run but you can easily turn that cost over to the applicant by charging a small application fee. Charging this fee not only covers your costs but helps ensure a higher quality applicant.
At Riverbend, every applicant is fully screened using our state of the art application system. Each applicant is screened with a nationwide criminal background check, rental history and eviction check, and credit report with score. This thorough process costs $20 per applicant, which we require the applicant to pay at the time they submit their application. We do not charge any additional fees, only the bare bones cost.
Using these tips will get you started on your way to finding the best tenants for your rental property, though this is not an exhaustive list. If you’re finding this process a little daunting, we would be happy to assist with all your property management needs. Riverbend Rentals and Property Management is a full-service agency that boasts nearly 30 years of property management experience and a consistent zero vacancy rate. We’re out to give you the best return on your investment while giving you the opportunity to get back to the things that really matter – you and your family.
Contact us today for more information on how to add your rental property to our extensive list of well-maintained, expertly managed portfolio.