How to Find the Perfect Rent-to-Own Tenant in Today’s Market

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If you talk to any property manager or any landlord who owns dozens of properties, they will tell you that it’s tough to find quality tenants these days. I know several property mangers and they tell me that evictions are up and they now have to screen a lot more people to find the right person for a property.

Obviously, this is no huge surprise given the real estate market.

So how can you make sure that you don’t get stuck with a tenant you’re eventually going to have to evict? How can you find the perfect tenant? Well, here’s how I do it. Recently, I had a tenant move out of one of my properties. And while most people freak out and quickly call the newspaper to begin running classified ads, I do something else.

I simply call one of the property managers who is part of my power team. You see, I sell the majority of my properties on a rent to own basis. And early on I figured out that the best place to find quality tenants would be through property managers. Property managers have tenants who would love to own their own homes and most property managers don’t do lease options and don’t understand how they work.

That’s why when a property manager has a great tenant who is thinking about moving and who wants to own a house, they will give you a call. That’s what happened with my current vacancy. I called up one of the property managers on my list and she has a couple who she thinks would be a perfect fit. The best part is, this property manager has had this couple for a long time, they’ve always paid rent on time and have taken good care of the house.

But you might be thinking, “how do I build these relationships and why would a property manager give me one of their tenants”, right?

When I build these relationships I always help out the other person first. So I will refer these people landlords who need their property management services and I will refer them to other investors. My niche is targeting tired landlords and this is who I buy the majority of my properties from. However, it doesn’t always work out, or maybe they are not motivated enough to sell and that’s when I recommend them to one of the property managers on my team.

After I have referred multiple landlords to the property manager, they want to return the favor and they let me know when they have a tenant who wants to do a rent-to-own. It really is that simple. You help them out first and they will help you out later.

But don’t forget this…

The most important thing to remember is that it will take awhile to find good property managers to be a part of your team. I’ve gone through numerous property managers before I found ones that were good enough where I would refer others to them. Since your reputation is on the line make sure they will take good care of the landlords you refer.

So, if you don’t have a property manager on your team start networking today. I also recommend they be a full time property management company and not just some Realtor that manages a few properties on the side. If you do this, you may never have to worry about finding a quality rent to own tenant again.

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About Author

Jason R. Hanson is the founder of National Real Estate Investor Month and the author of “How to Build a Real Estate Empire”. Jason specializes in purchasing properties “subject-to” and has purchased millions of dollars worth of property using none of his own cash or credit.

2 Comments

  1. Hi Jason,

    I appreciated your feedback on the Rent To Own process, and how you network with property managers, in order to locate ideal RTO tenant/buyers.

    In Canada, most recently, we have a a fair number of Rent To Own companies emerge. These companies primarily sell tenant first packages to real estate investors. With this structure, the Rent To Own company finds a tenant/buyer through their individual marketing efforts, they take the tenant/buyer to select a house of their choice, and then the Rent to Own company approaches a real estate investor. It is at this time that the real estate investor, reviews the number on the deal and eventually purchases the home. Tenants first Rent to Own process.

    Other than through the process that you described with your property managers, I am curious to know what similarities or differences there are in the US rent to own process when compared to the Canadian process described above.

    Best Regards,
    Neil.
    .-= Neil Uttamsingh´s last blog ..How to buy your first rental property – Step Seven =-.

  2. Jason,
    Although there are many methods to find quality Rent to Owns Tenants in Canada. One of them I believe is very useful. You can refer to your mortgage broker, in fact work with him/her during your tenant/buyers’ qualification process. This is in fact for people with a little credit problem. People who were refused and desperetly looking for a home could be the best candidate in this case. However it should be in consent of both parties.
    Mehmet

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