Going for the Gold
Ten steps to finding quality tenants
A quality or "golden" tenant represents the norm in my experience as the owner of a real estate property management company for 28 years.
A quality tenant is someone who pays the rent on time, immediately notifies an owner or manager of any maintenance issues, follows the house rules, gets along with the other tenants and enjoys living in your property. They are the gold for an investment property owner.
Having a process that you follow for finding those golden tenants is very important. We, as property managers, follow these steps for both our management clients and those clients that rely on our rental service when they have a vacancy.
1. Spruce up the property: Make your rental shine with fresh paint, clean floors, a sparkling kitchen and bath, windows and a well-groomed garden and common area. A well-presented property attracts those golden tenants.
2. Setting the rent: Make sure that you have set your rent appropriately as it relates to other rentals in the community. Go online and look at available rentals. Compare them to yours and find that perfect price. If you set the rent competitively — not too high, not too low, but just right, your property will rent quickly.
3. Market and advertise the rental: A picture speaks a thousand words and good photos as well as appropriate internet advertising will reach a broader market of prospective applicants. It is very important to fully describe and disclose the particulars about the property in your ads. There are many reliable sites available for this purpose. Most of the folks looking for a rental in today’s market rely on property management websites and real estate rental listing sites for information on properties for rent.
4. Showing the property: You have spruced up, advertised and now you have a list of prospective people that want to see your rental. You can choose three options —show the property to each person, do a staggered showing to several groups or hold an open house. Be prepared to answer questions; and if necessary, have a greeter at the door. Be sure to have plenty of applications to give to those parties interested in your rental.
5. Screening criteria and your application: It is very important to make certain that you understand and follow the Fair Housing Rules regarding the leasing of your apartment. In this highly competitive rental market, tenants are very savvy about their rights and the legalities of their tenancies. Be familiar with the latest laws and make certain that you have a written standard for your selection of a tenant that is your standard criteria for all applicants. Your application form should be comprehensive and you should require an application for any person over the age of 18.
6. Selecting the tenant: Your showing was successful and you now have 10 applications from 10 different groups and they all love your property. The first step in the verification process is to secure a credit check on each applicant. After you have the credit check and have determined their credit worthiness, you must carefully verify employment and get hard copies of paystubs or employment offers.
Verifying their current and past tenancies by calling their landlords and asking the right questions —how long, how much, how good, any bad checks, late payments and the biggest question of all — would you rent to them again — is a most critical step. Once you are satisfied with the verifications you will be able to comfortably select the best applicants for your property. Be sure to let folks know as soon as practicable and always have a back-up — folks do change their minds in this busy market.
7. Preparing a fully legal rental agreement: In this day and age, it is imperative that you have a very complete and comprehensive rental agreement that addresses the latest disclaimers, disclosures, rules and regulations and is clear on the terms of your rental. The days of a one-page, handwritten or handshake agreement are over and it is very important for both you, as a landlord, and the tenant to have a clear agreement.
8. The signing: All the paperwork is completed and now it is time to ratify the contracts and collect the initial move-in money. Be prepared to supply signed contracts to all parties and only accept certified checks at the signing.
9. A successful move-in inspection and documentation: It is move-in time and the tenants are eager to walk through with you. Have a move-in checklist with you so that all parties can complete it and agree to the condition. Take some photos for future verifications. If there are any areas that need maintenance or correction, make a date to handle that quickly. Assure the tenants that you are responsive and are happy they have rented your property.
10. The enjoyment of a golden tenant: You are done! You have had success and now relax and enjoy your new tenants who bring the gold to your investment each month the rent is paid.
If all of this seems daunting to you — there are many options available for a professional management company to assist you in the process. Every day these companies do this job. Every day, the companies welcome the opportunity to assist owners in their quest to find a golden tenant. And, every day, leasing agents welcome the opportunity to help tenants find their perfect home.
After all, matching golden people with golden places is the joy of being in the property management business.
Jan Mason is a Realtor the owner of OMM Inc. She can be reached via email@example.com or 522-8074.