5 Tips for Attracting Great (Better) Residents
Good residents come to you not by accident, but by design. There are good residents in every price range and in every neighborhood. A professional landlord will attract quality residents. An unprofessional landlord will attract troublesome residents. Your rental property is only as secure as the residents who live in it.
Tip #1: Appearance Matters. Do you use checklists and professional forms for the leasing process? The resident assumes that if the landlord is a professional who takes care of every detail, then every detail in the apartment will be covered as well. Good residents feel comfortable around a landlord who is organized.
Tip #2: Don’t Show An Unfinished Property. Most people cannot envision what an apartment will look like once you’re done with the painting, cleaning, and fixing.
Tip #3: Check Out The Competition. Most landlords do not check out what other area landlords are offering. You do not want to grossly underestimate or overestimate the amount of rent you could charge for your rental. The best property managers constantly monitor the trends in the local rental market.
Tip #4: Return All Phone Calls Within Three Hours.
Tip #5: Offer Other Payment Options, such as credit cards and direct deposit. Good residents often like to use their debit or credit cards to pay rent, or they may want to use an automated clearinghouse (ACH) transaction via their bank. They may receive frequent flyer miles or cash back from their credit card issuer. — By Melanie Van De Grift, Ritan Property Group.
Follow-Up Employment Verification
One landlord was recently saved a lot of potential frustration and money. The landlord had requested an employment verification, standard procedure, on a rental applicant. The employer responded that all was good with the applicant. However, the same employer, on his own before the lease had been finalized with the rental applicant, amazingly sent a follow-up fax stating that the same applicant had just QUIT the job.
After hearing this story, another landlord made a suggestion worth considering. Maybe landlords should do like mortgage companies, and send out a SECOND EMPLOYMENT VERIFICATION just prior to the final lease signing. This may definitely be smart if you, as the landlord, had been holding the home for an extended period of time. Or for whatever reason a few weeks, a month, or more, has gone by since the initial employment verification had been requested.
WHY YOU EVICT NOW!! (rather than later)
I voluntarily manage two houses for a local charity that the charity rents out. There is a 17 member board that runs this organization, so you have quite a cross-section of perspectives to deal with at every turn. I am one of the board members and took on the houses because I have the most experience in the group.
On December 1st, the treasurer came to the board saying the residents didn’t pay their rent. The board looks at me. I tell them to start the eviction process.
“Oh, we can’t do that!”
“We can’t put a family out in winter!”
“We can’t evict a family at Christmas time!”
“Let’s let them ride until after the holidays!”
Ok, I answer and zip my lips. I laugh inside to myself and say, “This is going to get interesting.” Well, fast forward three months.
“They’re 3 months behind, WE HAVE TO EVICT NOW!!”
Hahaha, let’s evict. Two things that amaze me are how soft people are and how people have no clue how this process works. Some of these people have a few rentals, like one or two of them. So now, the late-paying residents owe $2,625 instead of $875. I’m at the mercy of the board in this situation. Don’t wait to evict. I knew the people weren’t going to pay, so I just let the board do what it said was the best option.
Screening Applicants Who Get Tips
Here’s one big consideration when screening applicants who receive part of their income in TIPS: If the rental applicant does not declare or pay taxes on their TIP income, they are not being honest. How do you know that they will be honest with you the landlord when the time comes?
We Never Hold Houses!
Often landlords get burned because they “hold” a rental house for a future resident who was approved and seemed like they would be a good renter. Unfortunately, for various reasons the future resident changes their mind and the landlord has to once again scramble to find another acceptable applicant. In the meantime valuable time and money has been lost while the property was on hold. While there is no way to totally avoid situations where an applicant changes their mind about moving into a house, there are several things a landlord can do to reduce the possibility of losing time and money when that situation occurs. One way is never “HOLD” a property for someone. This line of thinking is suggested by Brad 20K, one of the regular contributors to MrLandlord’s Q&A forum and Landlord Convention. The following are Brad’s comments on the topic:
We never hold houses. Why should I lose 14 days of rent while they continue to shop around? There are tons of discussion posts about landlords losing money with HOLD agreements. Our policy is very simple and ALWAYS works: The rent starts the day we sign the lease, collect the funds, and take it off the market. We keep marketing until it’s rented. You’ll be amazed how many of those “Will you hold it for me” requests turn into signed leases today when you keep moving forward. Works like a charm. Stay in control.
Pre-Screen Applicants By Text Or Email
One of the priceless benefits of using the MrLandlord.com Q&A forum is that you can ask questions on ANY landlording related topic and you can get IMMEDIATE feedback 24/7 from landlords nationwide that can help you be more effective and successful as a landlord. One landlord asked last week: Does anyone have an email or text list of pre-screen questions already done that they can copy and paste here? Anyone care to share their list? I will refine it a bit to meet my needs and keep it on my phone.”
Several landlords suggested other questions. Below is one sample set of questions that was shared.
“This is saved in my DRAFTS folder. I just copy and paste it:
Hello and thanks for your interest. Before we can schedule an appointment to view, we need a bit of information about you. Please just hit REPLY and fill in the blanks, please don’t send a Word Doc. I don’t open them from anyone (too much chance of catching a virus, sorry!)
Have you ever been evicted or asked to leave a rental unit? Why?
Any criminal history? Tell us about it.
All Other Proposed Occupants (Names, Birth dates, and Relationship)
Are they over 18? (If so, we will need their info as well.)
Animal Names and Ages:
Types (Dog, Cat, etc.):
Breed & Weight:
Where do you work?
What do you do?
How long have you been there?
Net monthly income for you personally:
Net household total from all sources:
Where do you live now?
How much rent are you currently paying?
How long have you lived there?
Why are you moving?
Are there any problems with your current home?
Time To Raise The Rent!
If you have not raised the rent on your rental in more than a year or two, now is a good time to do so. Over 25 major rental markets across the U.S. saw the average rental market increase over 5% from the year before. But for various reasons, many mom and pop landlords are afraid to “rock the boat” and increase rents. They are concerned that residents will move if they attempt a rent increase so they figure it’s not worth the risk. Instead, landlords most often do not raise the rents on good residents and wait until a turnover before increasing the rent. However, not raising the rent each year is one of the most costly mistakes many landlords make. And people moving because of a small rent increase is much more unlikely than you think. That’s why I want to encourage you to raise rents this year.
Is it possible that a renter may move if you raise the rent. Yes, there is always a slim chance. However, If you are afraid of that happening, try the following approach: Say to the resident, “It looks like we are going to have the raise the rent as much as 10 percent or more this year, but before we do, because you are a 3-Star Resident, you have paid your rent on time, and you do a great job maintaining the property in good condition, we want to get your input before we raise the rent. If 10% is too high, what percentage is the maximum percentage increase your budget can handle right now? I will see if the management can work with you.”
The chances are great that the renter will NOT say a percentage lower than 2 or 3 percent. They may even say they can handle a 5% increase. Also note – it is better to negotiate a percentage rather than dollar amounts, because low percentage numbers sound more reasonable and acceptable to renters. So even if you go with “their” suggested low percentage of 2 or 3 percent, which may correspond to a $10 to $20 dollar increase or so, that is still better than no increase at all that most landlords end up with. Using the suggested strategy, you get more income and the resident is happy, because it showed that you were willing to work with them and keep the rent increase from being much higher and more than their budget can handle.
The above tips are shared by regular contributors to the popular MrLandlord.com Q&A forum, by real estate authors and by Jeffrey Taylor, [email protected]. To receive a free sample of Mr. Landlord newsletter, call 1-800-950-2250 or visit their informative Q&A Forum at LandlordingAdvice.com, where you can ask landlording questions and seek the advice of other rental owners 24 hours a day.