How to Find Great Tenants Without Ever Meeting Them

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I screen hundreds of renters every year for an apartment complex in an Homeowners Association (HOA). I see lots of background checks; our HOA is 95%+ a rental complex. I approve tenants — hundreds of them every year — without ever seeing or meeting them. I do not even call them. Of course after I give the initial HOA approval, the landlord can still reject them, but few do. And the wrath of the heavy handed HOA comes down hard on landlords who take a tenant who is not approved to the point that some investors have even lost their investment property.

Are you still stuck on seeing and meeting renters? 

Give it up — it is not necessary. I cleaned up a 120-unit apartment complex by creating criteria that keeps 99% of bad tenants out without ever even seeing a tenant. I took a complex that went from being the worst complex in the city in terms of police calls to being well below average in number of police calls. I have more about that adventure (and my acquisition of a bullet proof vest) on my own blog.

Related: Screening, Qualifying and Turning Down Potential Tenants

If you are self-managing a rental, it’s almost a given you will have to meet the applicant at some point. I do showings myself and meet most of my own renters. But I have also rented to several that I have never met that saw my property online. In 2014 alone, I have rented to three renters whom I only met upon giving them the keys. I typically have one or two that move into my rentals from out of state. All have been stellar.

Do you reject out of state renters because you cannot get the chance to meet them? Do you allow your property manager to accept a tenant without you ever looking at the tenant’s background and giving an initial approval or rejection?

If you are using a property manager and you have any say over any tenant, you need tenant screening criteria. If the PM is making all the decisions, they should have a basis for how they select tenants in writing. If not, they do not know how to screen tenants and you should run away from them.

The Risk Is on the Tenant

It is a huge risk for a tenant to rent a place sight unseen; it is not a huge risk for the landlord.  The tenant sends money to some unknown landlord for an application and a large holding fee. I charge $40 per adult for the application, and I require $1,000 to hold the unit. My applicants generally send the money through PayPal. I use a holding fee agreement so I obligate the renter to rent, but I am not obligated to sign the lease. Do not underestimate the amount of scammers that are out there. The renter is making a huge gamble, but sometimes they have little choice. I have even see my own places advertised by other people.

Smart landlords never obligate themselves until the latest possible moment. Signing a lease too far out front means you have to evict if the tenants never show up. After all, you have a live lease in effect for an empty unit, and the tenant can come back months later and move in. You may have the place re-rented by then and have a serious pickle on your hands. So I sign the lease when they arrive, and I give up the keys. Never obligate yourself until you have to or you could be on the hook for a motel bill.

Give Up the False Excuses

Some landlords are hung up on always meeting a tenant before they agree to give up their ‘baby’ to an unknown stranger. If for some reason they do not like the person, they will decline them and use the excuse of “they felt uneasy” or it was “too awkward” or some other lame reason they have because they do not know what to look for in a great tenant.

Great tenants have certain attributes that non-great tenants do not. They have great credit scores, then have clean criminal records, they have careers, not jobs. And they have never been evicted.

Related: Are You Still Struggling to find Great Tenants? Struggle No More!

Have a Plan — and Work the Plan

Before you even start to show a place, you should be ready for someone to ask you, “What are your rental criteria to move in?” Figure it out. If you do not have criteria and you are showing a place, you are in danger of violating Fair Housing laws and excluding great tenants. You are probably one of those landlords that go by the previous landlord references and get burned.

There is no 100% sure way of getting a great tenant or preventing a great tenant from going bad due to outside influences such as a lost job, but there are ways to put the odds in your favor. Much the way you split a pair of aces in a Blackjack game, there is a reason no one advises to split a pair of fives — it is VERY high risk. Why make your landlord experience riskier?

Have a set credit score that you are looking for. With the average renter having a 650 FICO score, you should have an idea what you want. You should know what classification your rental is and what kind of clients want to live there. You are not likely going to get a lawyer or doctor to live in a rooming house.

Know what the average household income is in your area; you should know if you want above or below average income. A criminal record will impact tenant behavior, but not necessarily tenant rent collections. But you should know the type of person you want to associate with and do business with based upon their paper background. The same is true with past landlord references. No matter what good things the previous landlord says, if it is not reflected in the credit score and income, you are taking a large gamble.

Match Your Plan with Your Property

The condition of your property will also play into the mix, but it affects the price of your rental, not tenant quality. Having a low quality apartment and attempting to get great tenants is tough, but not impossible. You have to focus on price. The other option is a low quality tenant in a low quality apartment. If you are doing that, tenant criteria are less relevant, and you need to focus on your eviction speed and fast rental turns. You need to minimize maintenance costs, minimize vacancy between tenants and maximize rents.

Once you have set criteria, a tenant either passes or they do not. There may be some things that make you uneasy about the tenant, as in they just barely pass the criteria on multiple items. It’s OK — you can decline the tenant. Have a criteria that you can follow for everyone and know there will be some borderline cases that you should pass on.

If you get a tenant that passes the criteria with flying colors, you do not need to meet the tenant. They pass, plain and simple. They will want to see the apartment, and you should show it, have a PM show it, have a current renter show it, but whether or not they pass will be decided based on the paper trail that your applicant has already laid out for the world to see.

When you start to understand the characteristics of what a great tenant looks like on paper, rather than in person, it will put you on the road to your success.

What is your approach to tenant screening? Do you have preset criteria?  If you have a PM, do they select your tenants, and what criteria do they use?

Let us know in the comments!

About Author

Eric D.

Eric is a 55 year old, soon to be former, computer professional. He started several years ago to replace his “work income”, with other alternate streams. He is well on his way to retirement at age 56, and is currently making more money at extracurricular activities, than he is working at his full time job. Whether that is Financially Independent, or just old fashioned entrepreneurial spirit, is in the eyes of the beholder.


    • Thank you for the comment!

      Once you have an idea of what a great tenant looks like on paper, you can use that as a basis to approve tenants without ever meetring them. Meeting a tenant only serves to bring in under-qualified tenants. When you put the odds in your favor, you will have a much higher profitability formula.

  1. I like you debunking many peoples delusions that they have some innate ability to sense if someone will be a good or bad tenant.
    If they look good on paper that is all that really matters to me most of the time.

    Some of the best residents I have ever had I have never met.
    Have nice lady in an out of state house that always pays, almost always pays on time, the couple of times she didn’t she got in touch BEFORE and let me know and told me exactly when she would pay (within a week) and paid the fees without question. Never complains about little things but also lets me know where there are issues that I do want to fix right away. When I have other people check in on occasion the place is always clean and well maintained.
    Barely know what her name is and no idea what she looks like. Been my tenant for about a year and a half. FYI I have been to the area 3 times since renting to her and never bothered trying to visit, why waste my limited time there and disrupt her day when she has been great.

    • Thank you for the comment!

      It if was as easy as just ‘liking’ a tenant, there would be no horror stories. No one suspected Ted Bundy or the BTK killer were bad people until they got caught. I personally know two murderers who appear to be decent people when you meet them.

      Only one is actually in jail for life. The other is out… He only got probation. (true).

  2. Precisely, this is business and not personal. If an applicant meets your criteria, everything has been verified, and they have positive references, they are good to go. Establish your criteria and stand behind it. It should never get personal. That leaves too much opportunity to like someone and want to overlook something unfortunate that is a red flag in the criteria. We are not counselors or social workers, even though people like to confide in PMs as such at times. If you can help someone with a question or suggestion, fine. however, don’t rent to someone who is outside of your criteria because you feel bad and want to “give them a chance.” Keep it professional. Keep it business.
    Additionally, breaking away from your established criteria for one person (which is technically treating someone else differently) could open you up to a Fair Housing lawsuit.

    • Thank you for the comment!

      That is exactly right. I expect a certain credit score, and a certain income level. And of course criminal and landlord references are there too. I rarely trust past landlords, as too many are trying to get rid of tenants.

      The tenants income will tell your their ability to pay rent, the tenants credit score will tell you the tenants desire to pay rent.

    • Thank you for the comment!

      I never use a national check, a county level check is what you want. Do it for all states/counties that the applicant has lived in for the past seven years. Look at the credit report to find the past addresses, and where to run the checks.

      I do not know if there are any international checking agencies. That’s why credit score is so important, criminals rarely have good credit.

      • Thanks Eric. We’re actually in Bermuda outside of the US. However, we do get a lot of tenants who move to Bermuda from the US for employment. If we find out what states that have lived in can you please advise how we would go about checking on them. Many thanks.

      • Any background check company can run a check on any US states. Many states also have a court site that you can check out. I use mccgrp to do my checks, there are many others.

        You should still be able to get credit score, even if criminal records are tough to come by. And you can tell a lot about a person by the company and employment that they work for. A teacher, nurse or Doctor would not likely be employed if they were a criminal. Nor would a cop or military person.

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