As a real estate investor/landlord, we only have enough time in the day to do certain things, and one of them should not be responding to a continuous barrage of tenant problems. So how do we pick the best tenants?
Tenant problems get people out of the business quickly, and can obviously be a bane to ones existence. The sad fact is most landlords out there do have tenant problems, and have essentially brought them on themselves. What I like to say is that there are no bad tenants, only bad landlords.
So if you have bad tenants, in most cases, you have set yourself up for disaster and misery. Why? Because instead of leaving a unit vacant and waiting for the right tenant, most landlords will be freaked out because they are having perhaps a time of negative cash flow, and will take anybody that has first and last months/security deposit.
How do we get the best tenants in? Well this all comes down to screening. Screening is a key element in your survival and sanity as a landlord. The first part of screening comes before you even meet a tenant. The best way is to let them screen themselves out.
When someone responds to one of your ads for a unit for an apartment, you must tell them over the phone a few things that are required before even seeing the property. Now if you have a property available, tell them “here is the address, go drive by the property” and see without going in, don’t disturb the tenants, but drive by and see if you like the area.”
This may screen tenants out right away because it may be an area that they don’t want to live in.
Secondly, we want to screen tenants out by telling them that there will be a $25, $30 or even $50 application fee. This will screen out so many of your disaster tenants. We can even put in an outgoing message where people are responding to your ad, that they will be subject to a 50 application fee, and this will be for the purpose of doing a criminal and credit check.
Now just think to yourself, how many people will not go any further because they have credit issues and/or criminal issues, and don’t even feel that it is relevant or necessary to give anybody $50 just to apply for the apartment.
The people that do come forward and do apply, pay the 50, which you will certainly tell them that is 100% refundable once they are chosen to be in that unit. The people that come forward will be, for the most part, excellent tenants, since they will be responsible, and you want a better quality of tenant in your units obviously.
With that I say happy screening, and don’t be afraid to ask for an application fee, so you can make your life much easier as a landlord.
How to pick the best tenants