Landlording & Rental Properties

Five Reasons To Get Tenant Referrals from Your Neighbors

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11 Articles Written

How you find the tenants that rent your houses can determine how well you do as a landlord. The longer they stay and how well they take care of your house directly affects your bottom line; you lose money on the turnovers and repairs.

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When you buy a house you are not just buying a house, you are buying a piece of a neighborhood. The same goes for renters; they are not renting a house, they are renting a neighborhood. Since tenants will look like your houses, I am very picky where I buy my houses. The quality of the neighborhood trumps all other buying factors since I am trying to supply a quality product for my customer, the quality tenant.

One of the reasons that my average length of tenancy is 6.5 years (which is way above average), I believe, is I get most of my tenants form local referrals. When I have a vacancy, I focus on the neighbors supplying me with their friends and family members as potential applicants. I paper the surrounding blocks with flyers that highlight all the home’s amenities and talk to my neighbors. I want them to fill my house with somebody they know.

Besides finding tenants, walking the streets and knocking on doors accomplishes three things:

  1. The neighbors, who will become your friends, appreciate your effort and will soon be your eyes and ears should something go wrong. I buy in primarily owner occupied neighborhoods. Since you are upsetting the balance of the neighborhoods by throwing renters at them, the neighbors appreciate that I care on who I put in my houses
  2. You will find deals. In an easy, get-to know-you way, let them know that you are in the house buying business. If you knock doors, it will not be long before you find the “mayor” of the neighborhood who knows everyone’s business. They can tell you who is getting divorced, falling into foreclosure, becoming bankrupt or who just died. This is how you buy houses below retail value.
  3. You will find local talent. A plumber, handyman or a carpenter down the street will probably give you a great rate and alert you to any potential repairs. They have a vested interest in keeping your house in good shape and can also keep an eye on things.

 
 When you get a referral form one of these sources, it is hard to go wrong if they qualify financially. Here is why tenants referred locally stay the longest, are the easiest to get, and are the most stable:

  1. Family members like to live closer to one another. Mom and pop like to have their grandkids close by so your tenants will likely have a built-in baby sitter.
  2. A son or daughter can keep an eye on their aging parents.
  3. Local referrals probably know better than you, the schools, the neighborhood and the community. More than likely they already go to a local church, have a nearby job and have a local support network.
  4. If there are financial problems, a local friend, family member or pastor may be there to bail them out
  5. Friends like to party with each other and kids can hang out. Walking down the street to a BBQ, dropping over for a little chat or getting the kids to come over becomes much easier if everybody lives closer together.

Remember the flyers I told you to pass out? Those are the same ones you put into the flyer box on your front yard “FOR RENT” sign. Drive by traffic, walkers and local residents will pass them on to people they know. Soon you will find that you find out that your problem is not finding renters but finding the best of the best tenants that will pay off our houses and make you rich!!

Photo: Edwin & Kelly Tofslie

    MH
    Replied over 8 years ago
    Really great article – very smart and back-to-basics. Thanks!
    Wagner Leite
    Replied over 8 years ago
    Absolutely incredible advice and something that so many people overlook in the renting process. Great article that is definitely needed.
    Steve Dexter
    Replied over 8 years ago
    MH- Thanks for the comment! I have to simplify everything so I understand it. I think that you make the most money over time with management. Not as sexy as finding a killer deal, more overlooked because people think of it as a time suckiing chore….but it is not, it is fun!!y Wagner- so many people miss how easy PM can be, dont you agree?
    mark
    Replied over 8 years ago
    Great Article! I’ll be hitting the streets with flyers before posting on CL! Thanks for the tips, MC Reply Report comment
    mark
    Replied over 8 years ago
    Great Article! I’ll be hitting the streets with flyers before posting on CL! Thanks for the tips, MC Reply Report comment
    mark
    Replied over 8 years ago
    Great Article! I’ll be hitting the streets with flyers before posting on CL! Thanks for the tips, MC
    Steve Dexter
    Replied over 8 years ago
    Thx so much for commenting! That is good, also pay them a spiff, if you rent to their referral. At the top of the flyer that descirbes the benefits of your house inthe most positive light, put a banner headline that says “PICK YOUR NEIGHBORS” Local referrals are the best!!!!!!
    Julie Broad
    Replied over 8 years ago
    Wow!! That is fantastic! Average tenancy of 6.5 years hey??!! I think that we’re going to add a new advertising strategy to our list. Thanks for this article Steve. Great stuff!!
    Trivedi Sweta
    Replied over 2 years ago
    best way to earning nice article admin. keep posting good and good articles we will catch you to future references.
    Mario Mormile Investor/ Real Estate Agent from Burton, Ohio
    Replied over 2 years ago
    Steve Dexter- fantastic article! What you shared not only covers acquiring awesome tenants but also lead generating for the next property. Simple and effective! Having my flyers made now!