Every landlord develops their own leasing process based on experience. If you are a new landlord, this is how your initial conversation with the rental applicant might go:
Applicant: “Hi, I am calling about your house for rent on Blake St. Is it still available?”
You: “Yes, it is. When would you like to come and see it?”
Applicant: “How about tonight at 6 PM?”
You: “I can meet you there at 6 PM.”
Applicant: “Great. See you there.”
You: “I’ll be there at 6 PM.”
After the tour:
You: “What do you think? Would you like to apply?”
Applicant: “I think so!”
You: “I’ll email you the application with tenant screening authorization tonight.
Three simple steps will save you a lot of time and money unless you wish to show your property to tens of prospective tenants and kill several weeks worth of your evenings.
Easy enough, right? But let’s start with your due diligence right here, at the initial conversation. Three simple steps will save you a lot of time and money unless you wish to show your property to tens of prospective tenants and kill several weeks’ worth of your evenings. You are looking for one tenant (or one group of tenants) so let’s try to weed out those that can never meet your requirements.
Ask the Right Questions Right of the Bat
Looking for a home is not a routine event for your prospective tenants. There is a lot of uncertainty and little bit of a gamble going into renting a home especially in a new area. Make your renters feel comfortable so they can open up about their situation. Then, ask questions like:
- Why are you moving?
- Where are you moving from?
- Why did you choose this area?
- When are you looking to move?
- Would you prefer a one or two-year lease?
Most renters are moving closer to their place of employment. If it’s a new job or a promotion congratulate them on the job or promotion. You know the applicant is a quality lead and you won’t waste your time on if:
- they are looking to move in as soon as your rental is available
- you get a sense that they might stay longer than a year
- their employment or income source seems stable enough
Just remember, vacancy and high tenant turnover in your property can get expensive, but it’s still less costly than renting to a bad tenant.
State Your Rental Requirements
Once you get talking with your prospective tenant, try to convey what you are looking for in your prospective tenant. When you are done with your tenant screening process, you will consider tenants that meet your criteria.
It may look like this:
- Monthly income (e.g. three times the rent amount)
- Disposable income you expect (e.g. 30% of their monthly income after deducting your rent amount and monthly liabilities)
- Minimum credit score you would accept (e.g. 600)
- Clean criminal history
- Clean eviction history
- State monthly rent amount, security deposit, and fees
- State pet policy and fees
Ask your applicants if they would be able to meet your criteria and if they have any questions. This will discourage those renters who are overextending their ability to pay your rent or those who are trying to fall through your tenant screening cracks. If someone is worried that you won’t accept them because of their DUI when they were young, they will ask.
If the applicant on the phone is confident that he can meet your requirements, go ahead and start scheduling the tour.
Charge an Application Fee and Be Upfront with It
You have a prospective renter that you think will make a great tenant. You go ahead and screen the tenant, paying for tenant screening services yourself only to find out that your prospect wasn’t so serious about renting your house and he has signed a lease somewhere else. By having the tenant pay for the tenant screening you know that the tenant is serious and he is confident that he will meet your tenant screening criteria. That means time, effort, and money savings for you!
Be Aware of Any Maximum Application Fee for Your State
Some states have limits on the maximum amount for an application fee that can be charged to the tenant. If the total tenant screening cost for all reports exceeds the limit, you can break up your tenant screening in two phases and subsidize the second part of your tenant screening. Have your applicant pay for the most important part of your tenant screening (say, the credit check, financial report, and criminal check). When these check out, finish your screening with an eviction check paid by you.