BiggerPockets

I've been renting out my property for a few years now and haven't had any major issues, just wanted some feedback if there's anything I can do better to improve the entire process and a few questions.

1) Advertising
I've been using craigslist/postlets as well as putting up a big sign in the front yard. I've tried putting signs in the surrounding area, but it really didn't seem to help as much as one big sign in the front yard and craigslist. I'm not sure if I should consider rentals.com?

I've never had an issue renting the property yet, but I believe it's because it's the nicest place for the lowest price in the area. So I'm just wondering if rentals.com or any other place would actually help show more tenants?

2) Background check
When I show the property and a person says they want it right away, I have them fill out a one page application and collect 35 dollars. Then I go home and use www.e-renter.com for the background check and make phone calls myself on everything that's on the application. The background check can only show me if their everything checks out, if they have foreclosed or had any major issues. As far as credit, I put in 520 and above, which it will come back a yes or no. It doesn't show me their credit report, which I would like to see. I would like to know if they can truly afford the rent. Is there a better site or a better way or determining if a person can afford the property? I feel their pay stub/w2 only indicates how much they bring in, which is useless if they are upside down or in extreme debt.
That website can give you a credit report, only if you own a business, which they send somebody out to make sure you really do have a business to qualify for the option to get a full credit report along with score. I'm not sure if there's any work around, besides having a friend who owns a business help me out.

Any advice on this would be appreciated.

Another question is what do you guys do with two adults, run a check on each person or only one person. I've mostly had stay at home wifes and I've been running a background check on the husbands, but this last time the wife filled out all the paper work. I'm not sure if a married couple would have similar credit scores? Is it safe to just run it on one person? I just tend to think that they don't want to pay twice the price for just a background check that is not reimbursable

After everything checks out, I meet up with them for the second time to collect more things for their background check such as
1) copy of ID for each person over 18 years of age
2) social security card copy of each person
3) last two pay stubs

Agreement
If everything checks out, then I meet them for the third time to sign the contract. I've been requesting one months rent for deposit, then I've only been accepting automatic payments, so they fill out that document for the contract, so that money is pulled out on the 1st and they only have to come up with security deposit during signing and the first of the month is when the money will be pulled out of their checking. I've been using https://www.erentpayment.com/ with their documents

One question I've had is how to avoid tenants that will not stop calling you for every single thing that's minor such as light bulbs or a water drip in the shower every 3 hours?
I've updated my contract that there's a deductible for each instance of 20 dollars, but I'm not sure that's smart? A friend told me it's what he does with his rentals, but I do have a little bit of a concern that they will let things go longer and then it will cost me more in the long run. I just don't want to have a phone call over things that are so minor that I'm getting a phone call every 2 weeks, but don't want thing getting out of hand.

Tenant Leaving
I really haven't had an issue with tenants leaving at all. I've had some try to not pay me the last month and tell me to use the security deposit, but with the automatic payments, they don't have this option. They can't cancel the automatic payments and it also allows me to view the property and then push money back to them through the same system.

So far I can't complain about everything as it has been going really well, but I feel I could always be doing things better or smarter. Any suggestions would be greatly appreciated.

For marketing - forget the expensive ad agencies unless you have a very large portfolio to make it worth the high dollar cost. Check to see what the cost is - many years ago when I had apartments, they wanted $450/month to be listed in the for rent apartment book. Best thing I have found is word of mouth advertising. When you know a vacancy is coming up - let everyone you know that you will have a vacancy and usually by the time it is vacated and ready for another tenant - you have someone waiting in line for that property. Pay a $200 referral fee to the person that referred them and see how many more they will refer to you later. To get accurate credit reports you will need to set up an account with a credit agency so can run online. When only the wife fills out the info - this would be a red flag to me. The husband may not have a job and will be a leach on the one person income - I need beer money, I need gas money so I can look for a job - but never seems to find a job - I have seen many of these types. For whiners - change the lease the next time it expires to where the first $200 of repairs is their responsibility. When they have a stake in the property they take better care of it knowing they will have to kick in the money up front.

Thank you all so much for the help

@ J Scott

I generally like to see that they bring home at least 3 times the rent amount per month in collective income.

I really like seeing things like this, a rule of thumb of 3 times the rent that they need to bring in per month. One problem I've been having is that the pay stubs haven't really been paying off so much, so it's why I started requesting W2. I would get a story about how they didn't make as much money this month, they took a vacation this month or some story about why the last two paychecks were a little low. So I started to ask for their w2 as well just to see how much they make per year. So I could use their pay stub for the 3 times the rent rule, but is there any suggestion if it doesn't match up and their story is that it was not a typical past two weeks for them or month.

Why do you have an issue with them coming out to do an inspection?

I have no issue at all, but called the erenter company a long time ago and they indicated that I couldn't get this type of account. I do have a separate office in my house, but she asked if there's a lock on that door, is there a sign on that door and basically indicated that she hasn't heard of anybody who works out of their house getting approved. So since the CSR indicated I would be wasting my time, I never tried to setup an appointment for somebody to come out to see my home office. Did you have a different experience or is it an erenter.com thing? Because I have no problem having somebody come out to my home/office

As for things like dripping showers, this is something that you should want to fix

This was a lady who called me one day to tell me the show was dripping. Then one day later called me and told me that it was her imagination and that it isn't dripping. Then called me back two days later to tell me it was dripping again. So I went out with my plumber who looked at it and said if it's dripping once every 3 hours or longer, that's condensation in the pipes and is not an issue. She was with me when the plumber said this, then about a week later she called me again to show me that there was a drip. I couldn't see any drip at all when I was there for 30 minutes.
I spoke to a few other plumbers who all told me unless it's one drip every second or every two seconds you will spend much more money fixing the drip then it would cost in water even after 10 years.

@ Realtyman
I was more referring to $60 dollars, not hundreds of dollars. I meant rentals.com as I found a pie chart online somewhere on what places people search the most for rentals and 3rd place was craigslist and I can't remember what was second place, but 1st place was rentals.com. So I was more questioning if I should spend that extra 60 dollars. Even though I haven't had any issue with tenants, it would be nice to get more exposure as maybe I could get a better price or better tenants, but just a thought.

@ Cameron Novak
I have tenants in there now that are about to leave and have already signed new tenants. 4 years ago I had trouble renting the property, but I'm certain it was the price as for the past 4 years I haven't had an empty month since then. So far no issues, but again I'm getting new tenants, so we'll see how that goes.

What is CL forum?

I just encountered my first big problem. I had new tenant setup 2 weeks before the last tenant, the coupled signed the agreement and gave me a check for the security deposit. I thought everything was going well and went on a trip, which when I came back I received a phone call with the individual told me that their payroll changed (not sure I believe this) and they wouldn't get paid until the 12th. I told them 2 weeks late is not acceptable, which a few hours later I checked my bank account and noticed even their security deposit bounced.

So I told them they needed the money before moving in, so they ended up returning the keys, but I lost a lot of potential tenants for two weeks as well as telling people the property was already rented out. So I'm a little upset.

I'm trying to come up with some positive from my mistakes and things I did wrong and from now on I'm only going to accept money orders and cashier checks for the security deposit as I would have seen right away they didn't have the money.

I'm also considering asking instead of the last two pay stubs or w2 for the last two bank statements as I ran into somebody who didn't have a w2 because she cut hair on the side and claimed that's how all her money came in. So I'm starting to think the last two months of your bank statement is probably the best bet as it's what I had to show when I got a loan.

Hi J,
Here's what I do.
To pull a full credit report without an inspection I use rental authority .com It shows me their credit score and everything on their credit report and gives me a range of good, ok, bad and excellent. It will also run an employment check if I pay extra. I also have a form I use to fax their employer giving them authority to tell me how much they make a month. That's a good gauge for me.

For marketing I use Trulia (they have a new rental feature) and CL. In my CL adds I get VERY specific. So I may want someone employed with the local hospital so in the headline I'll write ACME HOSPITAL RESIDENTS WANTED and target there. I think of very specific ways to target who I want. I might write....JUST MARRIED..I HAVE THE PLACE FOR YOU - You have to be VERY careful you are not discriminating against people but it's pretty easy to target who you want. I will also fax companies HR departments asking them to advertise the unit to their employees and offering a $200 referral fee if one of their employees is accepted. I like to target my tenants. I will also ask current tenants if they have any friends looking for places and offer them a referral fee.

THEN in the body of my craigslist ads I write this:

Don't respond to this ad without answering the following questions:
1) Tell me about your current landlord and what will they say about you?
2) Tell me about your employment history?
3) Tell me exactly who will be living in the unit with you
4) Explain to me why you are moving and how soon you are looking to move

This weeds out a LOT of people for me. What is great is I can tell by the way they respond if they are serious, who they are, what they do, etc., as I want to try to qualify as much as possible before I even SHOW them the apartment.

Now does this mean I have perfect tenants? NO but I try to get the exact tenant I want before renting.

good luck

Originally posted by J Richardson

But I'm amazed at how many people know the address and I drive 30 minutes, wait for them another 15 minutes, talk to them for 15 minutes showing them the property while they explain to me that it's farther than they thought, even though I explain really well where it's located.

Depending on the area, consider putting a contractor lockbox on the property, and just giving prospective tenants the code so they can show themselves around. Leave applications (and info sheets about the property) on the kitchen counter, so if they're interested they can take one and fill it out at their convenience.

Whenever you happen to be at the property, change the code on the lockbox...

I know several people who do this (even in lower income areas), and haven't had any issues with stolen appliances or vandalism...

Originally posted by J Richardson

I'm trying to come up with some positive from my mistakes and things I did wrong and from now on I'm only going to accept money orders and cashier checks for the security deposit as I would have seen right away they didn't have the money.

I think despite the disappointment, your biggest blessing here is that they have not moved in. Imagine that security deposit was OK, they moved in, then something happened to their job a month later and they couldn't pay and you had to go through the eviction process, then had to fix up your house for showing again.

I'd taken personal checks for security deposit before but I went to their bank and cashed it immediately.

Good luck with your next tenant!
Angie

J S. -> lockbox sounds interesting, but a little bit nervous about strangers coming in my property without me ever seeing them or knowing who they are. I've noticed I've gotten all kinds of people and would hate for the wrong one to show up.
I can see it benefiting time though

Jon H.
I was a little confused with your post. Do you actually show possible tenants at the sametime? So if a few call, then you tell them all to show up at the sametime?

Yep, I tell them to show up at the same time. Most folks spend all of five minutes looking at a property. Maybe 10 if they're really interested. Most folks also don't show up exactly at the time you tell them. I try to be about 15 minutes early, and its pretty unusual to have two show up at exactly the same time. If they do, whoever gets there second waits a few minutes. Combine that with the fact that only about half the people who say they will come actually do and this really isn't a problem. Its made the showing process much less painful.

Keep in mind that many people have no experience in repairs at all. Most folks don't have any tools or the knowledge to do even basic repairs. I deal with my properties myself. I always go have a look first and see what's going on. Many times, its a quick trip to Home Depot, $10 in parts and an hour later I'm headed home with the repair complete. It does get frustrating to have to deal with little stuff, but it saves paying someone $100 to deal with something trivial. The last repair was when a tenant called saying there was a drip under the sink. The sink faucet had broken and the spray hose had worked loose. I took it off and went to buy a new one. I told the tenants they had to pay, which they agreed to. Turned out the faucet had a lifetime warranty, so the new one was free (and much more strongly designed.) My total cost? $0. Just about 90 minutes of my time. My savings? Avoiding leak under the sink that would have destroyed the cabinet given time. I'd much rather be called to deal with something minor than to find the cabinet rotted out when they move out later.

Whoever said rental properties were "passive" was full of bull.