Today’s greatest rental property owners already know it, and it’s about time everyone else did, too: it’s not about finding tenants for your properties, but rather finding the right tenants for your properties. A truly great tenant can simultaneously increase cash flow, reduce headaches, eliminate vacancies and make everything easier for everyone involved. That said, it’s not enough to simply expect good tenants to show up on your doorstep without putting in a little work. To find renters, landlords will need to follow the system outlined below.
Today’s high home values have resulted in no shortage of renters. While the economy is certainly better, far too many people are relegated to renting, despite wanting to own. As a result, landlords shouldn’t have a hard time finding tenants; they are out there. It is not about finding just any tenant, but instead the right one. Finding tenants that will respect the property and its owner is of the utmost importance, and for good reason: truly great tenants are worth their weight in gold. A good tenant awarding a landlord with sufficient, timely cash flow is invaluable, which begs the question: how do you find good tenants?
The answer is in a simple four-step process:
For more information on how to find a good renter and an elaboration on these steps, please reference the following guide.
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The application process starts once landlords have found potential tenants. However, it’s the first item on the list because of how important it is to have a good application in place before finding a tenant. The application must be in place before any other steps are taken. That way, landlords will have the proper credentials to move forward in the event they do find a renter.
Let’s take a look at what every rental application process should include:
Once applications are submitted, impending landlords need to mind due diligence, and ensure the information provided is accurate and acceptable. Therefore, instead of simply taking applicants for their word, landlords should conduct thorough background checks. As their names suggest, background checks will vet each and every applicant.
In order to conduct a good background check, landlords must (at the very least) take three specific things into consideration: references, criminal records and credit reports.
A good application will have a space for applicants to put references. In addition to previous landlords, applications should request previous employers, too. That way, impending landlords will be able to simultaneously verify information and check for red flags. When talking to previous employers, stick to a script, as you’ll only be able to ask questions that verify the information provided on the application. Anything more may cross a line, and perhaps even break the law.
In addition to checking references, landlords will want to check for criminal records. That’s not to say previous convictions will prevent applicants from moving in, but rather that the landlord has the right to know who their tenant is. As a result, the homeowner shouldn’t immediately count out convicted criminals, and should give the applicant an opportunity to explain their circumstances. There are several laws protecting tenant rights, so check with the local authorities to make sure you are conducting background checks lawfully.
Next, landlords will want to pull a credit report. When evaluating someone’s credit history, pay special considerations to the applicant’s payment history, credit scores and past evictions; these are all indicators of a tenant’s ability (or lack thereof) to make rent payments on time.
It is worth noting that there is more to the application and background check processes than exercising a subjective opinion on the landlord’s behalf. While landlords will certainly want to approve the right tenant for their personal situation, there are laws they must abide by when vetting tenants.
Be sure to give the applicant an opportunity to explain their circumstances, and be sure to double-check federal and state laws regarding tenant rights pertaining to criminal records. Remember, there are regulations in place to protect both landlords and tenants from unfair practices, and the screening process is no exception. The Fair Housing Act, in particular, legally protects applicants against discrimination during the screening process.
The Fair Housing Act is designed to protect seven classes from being discriminated on:
In addition to the Fair Housing Act, homeowners must also abide by the rules set forth by the Fair Credit Reporting Act (FCRA), which is designed to protect applicant information while background and credit checks are conducted. In following the rules outlined by the FCRA, landlords will need to take the necessary steps to keep the applicants information safe, not the least of which include verifying the applicant’s signature, completing a credit access application, and properly disposing of consumer reports.
Conducting a background check is a time-intensive process, but necessary nonetheless. A thorough and legal background check will help place the best tenants in a rental property. However, each background check must comply with local laws. As a result, landlords will not only need to familiarize themselves with the best ways to vet tenants, but the best ways to do so legally and fairly. As always, consult with a legal professional when establishing processes and policies for your own background checks.
The majority of successful landlords owe their position to one thing, perhaps more than anything else: demand. The more people interested in a respective rental property, the less likely it is to remain vacant. If for nothing else, maintaining one’s status as a successful landlord is a numbers game; the more applicants, the better. To that end, the single greatest way to maintain demand is to know the best places to find tenants.
The majority of home searches take place online, and rental properties are no exception. More and more people are looking for their next rental online before they even consider looking anywhere else. In fact, looking for a rental property online is no longer the exception, but rather the norm.
As our dependance on technology continues to grow, the internet will serve as the single greatest source of incoming rental applicants. Therefore, it is essentially in every landlord’s best interest to post their listings on every rental website they can. Again, today’s most successful landlords are the ones who are able to increase demand for their assets, and nothing may do so faster and easier than the best rental websites. Posting on an established rental website may simultaneously increase exposure and reduce vacancies. Perhaps even more importantly, many of today’s rental websites used to find renters are free of charge. What more can a landlord ask for?
Some of the best websites today’s landlords use to find renters include, but are not limited to:
Not all that different from its rental website counterparts, Craigslist serves as a platform for rental property owners to increase awareness of their assets. Simply placing an ad on Craigslist can put a property in front of countless prospective renters with the simple click of a mouse. In as little as ten minutes, landlords may post an ad that has the potential to be seen by thousands.
In order to find renters on Craigslist, property owners need to follow the steps outlined below:
It is worth noting, however, that finding tenants will require more than following the previous steps. Everything outlined above is simply intended to help navigate the site; nothing more. In order to find tenants to move into a property as soon as possible, landlords will need to make the Craigslist ads as attractive as possible. If for nothing else, it’s not enough to simply post an ad; the ad has to get the attention of visitors.
Therefore, if you want to post ads on Craigslist with a higher degree of success, here are five tips you need to consider:
There is simply no easier way to reach a wider audience then through implementing a proper social media campaign. It allows you to reach an incredibly wide and diverse audience with relatively little investment, too. There is one catch, however: investors must know how to conduct a proper social media campaign to find tenants. To make sure you are on the right track, pay special considerations to the advice below:
Of course, there are countless steps in a proper social media campaign, but the advice above is universal. There isn’t a successful marketing campaign that neglects anything listed above. Therefore, they are not intended to replace an entire campaign, but rather to supplement one.
Understanding how to find good tenants starts with a little self reflection. You see, the best form of marketing (and perhaps easiest) is a happy client. If landlords are able to look at themselves and the services they provide with an unbiased opinion, they can identify areas of strength and weakness. From there, they can pinpoint exactly how to make their tenants happy. Therein lies the secret to word-of-mouth networking: doing the best with what you have. In the event a tenant has an incredible experience in one of your properties, there’s a good chance they will tell people about their time spent in the unit. If that’s the case, you’ll want to give them a platform. Perhaps you could post a comment section on your own website. If you are confident in the service you have provided, it may serve as one of your greatest marketing strategies.
Turnover and vacancies are a landlord’s worst nightmare. Turnover eats into profit margins and costs a lot of time and money. Vacancies, on the other hand, are self-explanatory. Any time a unit sits vacant or in transition, the landlord is at risk of losing out on potential profits. Therefore, it only makes sense that the best strategy is to keep the good tenants where they are: hopefully as happy renters. One of the best things landlords can do is keep their current tenants happy. That way, they increase the odds of extending the lease and cash flowing in on a monthly basis.
While a good property manager is entirely capable of finding good tenants, some landlords would feel more comfortable doing things on their own. That said, in order for landlords to find renters they can trust they will need to mind due diligence and follow a proven system. Following the steps outlined above should increase the chances of a landlord finding good tenants.