What I am I doing wrong? Can't get it rented.

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What I am I doing wrong? Can't get it rented.

Brad E.
Investor · Athens, GA · Member since 2015 · 205 posts · 66 votes

Hey BP - I am having some trouble getting my first property rented and I would love to have some feedback from the community to see what I should be doing differently.

Property details:

2 Bd/ 1 bath duplex

Light rehab performed - floor paint and various other cosmetic improvements

C+ neighborhood

Listed since 11/1/17

Price: $695/month, includes yard maintenance and trash pickup

1 side is occupied at $525; needs a rehab

I have it listed on craigslist and syndicated through Zillow.

Minimum qualifying standards:

620 credit score

3x monthly rent income

No pets

No smoking

I've set up a screening process that requires prospects to fill out a questionnaire before I will schedule a time to show it to the tenant. When they contact me through the listing site I send them a link to the questionnaire via the email address they provide.

Once a questionnaire is submitted I review it and if it looks good I will set up a time to view the unit.

At the showing I give them a property handout with a link to my online rental application and my contact info. I

To date I've had 180 inquiries from the various listing sites and 37 questionnaires submitted, with only 1 actual application submitted.

My funnel is definitely narrowing down the field but it's too narrow because hardly anybody is finishing the process.

On the surface it seems like the problem is occurring at the application process. However, I am not sure of that.

My application is through cozy.co and it runs $39 which covers the credit and background check. I can't control this cost unless I change providers, which I am open to doing.

I've started experimenting with the price by lowering in down to $675 where its been for about 2 weeks. I am planning to lower it again this week down to 650. I've also lowered my credit requirement down to $600.

I don't think I'm comfortable going any lower on the credit score, but I may have to continue dropping the price. I do think the price is already competitive because there are other units in the same neighborhood around that price.

I am questioning if the application fee is creating too much of a barrier to entry.

During November and December I chalked it up to the holidays making it hard to rent. Now that we are more than half way through January, I'm not really sure what the problem is or what I am doing wrong. I’ve recently implemented an exit survey which I send to folks after they have viewed the unit. I’ve only sent it 1 time and had 0 response rate so far.

I would love to hear any suggestions you might have to help getting this thing rented!

Thanks in advance.

1Reply
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Most Popular Reply

Andrew Kerr
Rental Property Investor · Everywhere, USA · Member since 2012 · 689 posts · 525 votes
8y

@Brad E. I am going to assume since you have had 180 inquires the price for the product seems right. This leads me to believe that your process is too stringent. I personally wouldn't jump through all those hoops for a c+ area. I have to message to say I am interested, then fill out a form to even see it, I would pass. I have seen this done for ultra high end, very exclusive places but not low end.

If you are worried about spinning your wheels on one-to-one showings, do bulk showings instead. Do Friday 5-7pm, then Saturday from 10am till noon, or something like that. 

Also, when I did affordable housing I basically had to ignore credit scores, and I lowered my income qualifier to 2.5 times. What I focused on was have they paid rent on time and didn't cause damages when they left, and do they have a good job. I would ignore bad credit card and medical debt. 

I also found most of my hispanic tenants didn't speak english well enough to fill out online applications and screenings. Then my other lower income tenants, doing an online application was too difficult, I got more success having paper applications for them to fill out at an open house and give me a money order for the screening.

One other thought is the price might be to high for the C+ area. 

16Reply
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54 Replies

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  • Richard B.
    Rental Property Investor · Nyc, NY · Member since 2016 · 62 posts · 26 votes
    8y
    How about you consider to drop the application fee and raise the rent a little bit to cover it!
    4Reply
  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    8y

    I think your questionnaire may be the problem, if you are asking a ton of personal questions people may be reluctant to complete it, try to find another way to apply and when they cannot find the application elsewhere they give up and move on.  Also the no pets policy may be hurting you just a bit especially if the unit has a yard.  In general the more streamlined your application process the better.

    2Reply
  • Account Closed
    Property Manager · Middletown, NY · Member since 2016 · 26 posts · 20 votes
    8y

    In my opinion, your application process is too burdensome especially if it's a C class neighborhood. 

    Keep it simple and get them to come check out the place, once they're there you can usually have a good idea.

    If you continue to have trouble, don't rule out a broker to help you get in rented. It may cost you one months rent, but it's better than sitting for another month. 

    12Reply
  • Andrew Kerr
    Rental Property Investor · Everywhere, USA · Member since 2012 · 689 posts · 525 votes
    8y

    @Brad E. I am going to assume since you have had 180 inquires the price for the product seems right. This leads me to believe that your process is too stringent. I personally wouldn't jump through all those hoops for a c+ area. I have to message to say I am interested, then fill out a form to even see it, I would pass. I have seen this done for ultra high end, very exclusive places but not low end.

    If you are worried about spinning your wheels on one-to-one showings, do bulk showings instead. Do Friday 5-7pm, then Saturday from 10am till noon, or something like that. 

    Also, when I did affordable housing I basically had to ignore credit scores, and I lowered my income qualifier to 2.5 times. What I focused on was have they paid rent on time and didn't cause damages when they left, and do they have a good job. I would ignore bad credit card and medical debt. 

    I also found most of my hispanic tenants didn't speak english well enough to fill out online applications and screenings. Then my other lower income tenants, doing an online application was too difficult, I got more success having paper applications for them to fill out at an open house and give me a money order for the screening.

    One other thought is the price might be to high for the C+ area. 

    16Reply
  • Bradford Clark
    Charleston, WV · Member since 2017 · 113 posts · 50 votes
    8y
    Wow! You are getting a lot of responses so I don’t feel you are overpriced. It sounds like there are issues in your application process. Have you rented units in the past with this website? I use www.mysmartmove.com and it’s pretty simple. Send a prospective tenant an email and they complete, pay, and then submit. You just receive an email with a suggestion to accept or reject.
    2Reply
  • Account Closed
    Investor · Saskatchewan , Saskatchewan · Member since 2017 · 311 posts · 233 votes
    8y
    The pre-screen questionnaire I use eliminates ~1/3rd of initial respondents who don’t fill it out. ~1/3rd don’t fill it out entirely and I may or may not look at it depending on what they left blank. 1/3rd fill it out and of those maybe 10-20% qualify and I show the place. My guess is you’re asking too many questions. I ask 9 or 10. C class renters don’t run to water, they walk,... and take breaks along the way, and expect water to come to them,... uphill. Adjust your system.
    5Reply
  • Jack P.
    Columbus, GA · Member since 2017 · 88 posts · 115 votes
    8y

    Prospective renters competitively shop for potential apartments the same as they shop for everything else.  They will compare your unit to others listed, weigh the options, and make the choice that best suits their needs.  In my experience, I always strive to make that choice easy for them, either by providing a superior product or superior price to my competition.  

    That being said, without knowing the specifics of your market, something is turning them off.  I would guess it's the application fee associated with the process.  If someone takes the time to physically go and look at the unit, they are definitely interested.  You don't say how many people have showed up to take a look, but if its more than 5, your problem is on the other side of the price and location.  If I'm a prospective tenant, I wouldn't be inclined to fork over $40 of my hard-earned income to a seemingly arbitrary website without some type of assurance that my money isn't wasted.  To me, I wouldn't have a very good feeling that my money doesn't just disappear.  It's much different than showing up to a realtor's office (as a property manager) and paying them the money.  How do I know that there aren't 15 people already applying for the unit?  My suggestion would be a manual review of the application, and some personal reassurance to applicants that as long as their numbers check out, they will get the place.  You have to be somewhat of a salesman.

    On the other hand, I generally offer some type of move-in special, up to a half-month's rent, to entice tenants.  

    3Reply
  • Jacob A.
    Tuscaloosa, AL · Member since 2012 · 73 posts · 54 votes
    8y

    In my opinion, I have have bad luck when asking for too much info in that class of property. The thing I would consider doing is eliminating the questionnaire and allowing the tenants to not have to answer so many person questions. You also could offer some sort of an incentive to entice the prospects.

    1Reply
  • Brad E.
    OP
    Investor · Athens, GA · Member since 2015 · 205 posts · 66 votes
    8y

    This is all great feedback.  Thanks guys.

    I think I may switch to a paper application or try mysmartmove.com.  Not sure how to deal with the paper application though as I do not have an office for them to return it to.  I guess I could ask them to fill it out right there on the spot.  

    Keep the suggestions coming.

    0Reply
  • Brad E.
    OP
    Investor · Athens, GA · Member since 2015 · 205 posts · 66 votes
    8y

    @Bradford Clark

    Just signed up for mysmartmove.  Thanks.

    1Reply
  • Account Closed
    Investor · Saskatchewan , Saskatchewan · Member since 2017 · 311 posts · 233 votes
    8y
    Keep a few key questions like “tell me about your work” or “when do you need a place for?” And “for how long do you hole to rent?”
    0Reply
  • Jana Hristova
    Property Manager · Tampa, FL · Member since 2016 · 34 posts · 25 votes
    8y

    Why don't you ask the people who submitted the questionnaires the same question? Ask them what they think of the condition or the price and how does it compare to similar listings. Most people will tell you.

    0Reply
  • Jeremy Z.
    Tacoma, WA · Member since 2018 · 230 posts · 257 votes
    8y
    Originally posted by @Brad E.:

    This is all great feedback.  Thanks guys.

    I think I may switch to a paper application or try mysmartmove.com.  Not sure how to deal with the paper application though as I do not have an office for them to return it to.  I guess I could ask them to fill it out right there on the spot.  

    Keep the suggestions coming.

     I would do this strategy along with bulk showings, as @Andrew Kerr suggested. It may be too late on this one since the initial rush of interest may have past, but it's a good approach for the next time you have a high volume of interest.

    0Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    I would say for a C plus area your credit score is too high. My PM (who rents in mostly A and B areas) has a minimum credit score of 525.
    1Reply
  • Mark F.Pro Member
    Rental Property Investor · Elgin, IL · Member since 2016 · 326 posts · 270 votes
    8y

    I've used Cozy.co a couple of times with the applicant paying the $39 fee but that is after I've met them, they've seen the property and want it and I have a good feeling about them and let them know it is there's as long as the background check and credit report come back good. Like @Jack P. mentioned, people are willing to pay the fee if they know they will get the place and that is the final step for approval.  Just my thoughts.

    3Reply
  • Alan Pederson
    Investor · Kennedale, TX · Member since 2016 · 219 posts · 349 votes
    8y

    I just use a simple application that they can fill out and return. I also made a flyer that shows a picture of the property and the basic info about it. I look at credit scores but if their score is low, why is it low? You have to figure if they have money and a good credit score, they would buy instead of rent. So, low credit scores are not a deal breaker for me. Their income and outstanding bills are what I look at closely. Can they pay the rent (3.5x pay)? Have they been evicted before? How long have they been employed? What did their last couple of landlords think about them? These are the things that I look closely at. The tenants we have in the first house we bought had credit scores in the low 400 range. They both worked and made more than enough to easily pay the rent and bills. They made some bad credit decisions years earlier and are working to get back on track. Everything else checked out okay so we rented to them. It's been almost 3 years now and they have never paid late and every time I go over there the house is spotless.

    1Reply
  • Brad E.
    OP
    Investor · Athens, GA · Member since 2015 · 205 posts · 66 votes
    8y

    @Jana Hristova - that is one of the questions I put on my exit survey.  Haven't gotten any responses yet, but I've only sent it to the last 3 folks that viewed.

    @Mark F. - This is how I've been doing it.  The dont get the cozy app until after the view the property.  This is seemingly where my process if falling apart.  Not sure if its the high fee from or what.  Mysmartmove.com, which I just signed up for is $25 so we'll see if that makes any difference.

    @Alan Pederson - I'm still on the fence about lowering my credit score requirement.  I'm hearing the feedback from several folks on this thread, so maybe I will lower it some.  I seem to have plenty off folks that are interested that do have above 600 scores though.

    And thanks to everyone else for the feedback thus far.   I've made some changes already based on it.

    I've signed up for a different screening service that charges $25 instead of $39 and I've also removed quite a few questions from the questionnaire to make it shorter.  I'll get the remainder of the details I need when they actually apply.  Still thinking of a good incentive I could offer.  Lowering the credit requirement is still an option but I'm going to see if these other changes make a difference first.

    I'll try to keep this thread updated as I go.  Thanks again.

    0Reply
  • Mike Storey
    Investor · Williamston, SC · Member since 2017 · 39 posts · 32 votes
    8y
    Really your missing the big picture. You already lost more money on an annual basis than a property manger charges. It would have been much easier to hand off the rental to them and you move on to the next deal. This saves time and the headache of dealing with alot of BS. Just find PM that lets you handle the maintenance calls and introduce yourself as the handy man when you contact the tenant. This makes life much easier.
    2Reply
  • Vance Kibler
    Fort Mill, SC · Member since 2015 · 11 posts · 4 votes
    8y

    I feel it's the process. We have the same tenant demographic it sounds like and we have rental open houses to bulk show, and let them know the rental app fee is credited toward deposit if they sign.  I also want to add that it takes us longer to rent in the winter months but ours is in a family neighborhood and they generally don't uproot kids during the school year. Just an observation. During late spring/summer we usually are able to rent in one group showing on a Saturday morning 10-12 am window.

    1Reply
  • Pete M.
    Finance · Fort Wayne, IN · Member since 2015 · 7 posts · 10 votes
    8y

    @Brad E.  I use cozy.co as well with great success.  I do bulk showings and have them either fill out the online application before or after the showing.  The one thing that I stress is that the initial application is FREE and do not pay any money for background checks or credit checks (not everyone listens though).  Then at that point I have met them, I can see their work history and residence history.  I can reach out to employers or past/current landlords if I choose to. 

    Then after that, if they still meet my requirements, I have them submit for the background and credit checks.  At that point they have met you and they have interacted with the website at least once already.  This gives them a much more comfortable experience, and significantly less wasted credit and background checks.  Using this method I've been able to weed out the bad tenants before any money is spent and it's pretty efficient.  Hope that helps!

    5Reply
  • Frank Chin
    Investor · Bayside, NY · Member since 2017 · 1k+ posts · 1k+ votes
    8y

    If it's a C area, I would not use an on line service, which I think you're using and drop the application fee all together. I've been doing this for nearly forty years, now retired and still have rentals, and worked as a programmer, but for rentals, I stay away for using the internet on line applications.

    If you're talking about a C area, more than likely these folks are not computer savvy, and a fee is something they can ill afford. After I retired, I got a part time gig at a senior center, and we have folks that needs help and they would need our assistance. In the case of your rental, to fill out an application on line, they have to come in and see us, or secure an appointment, and we would have to help them log in, fill out the application. Believe it or not, C areas usually have people not proficient in the English language. At the senior center, some people comes from parts of the world where they are illiterate, even in their own language. But they work, and have jobs apparently. 

    If this barrier is intentional, you want people who is literate, computer savvy, fine. If you want people who don't mind to throw away money on application fees, fine. And with an application fee of $39.00, for the clientele you're serving, it's beyond their affordability. Some of our clients went without phone service even with monthly phone bills running less than that. We got them free phone service which we have to apply for them. If a client came to us, ask our opinion about the fee, we would advise him by paying it, he would only guarantee he would be looked at, not even get the apartment, and would advise him not to go ahead with it. They'll be better off buying food for it. Imagine looking at 4 apartments and paying 4 application fees?

    What I do for my rentals, I have people come, look at it, give them a paper application. I tell them if they are interested, fill it out on the spot. If there are certain information they don't have, tell it to bring it home, complete it, and mail it back, or come back. But even with a partly filled out application, by eye balling it, I can tell if it's someone I would consider.

    BTW, I feel more comfortable dealing with the renter in person, get a feel. Seeing data on line, and meeting someone in person, you get a completely different picture.

    3Reply
  • Jana Hristova
    Property Manager · Tampa, FL · Member since 2016 · 34 posts · 25 votes
    8y

    @Brad E. Brad, call them right after they see the property. That's the only way you will know for sure. 

    0Reply
  • Nick P.
    Denver, CO · Member since 2017 · 27 posts · 13 votes
    8y

    This has effectively already been said but Class C typically does not bode well with multiple tasks and costs. I might go the old fashion with a printout questionnaire after the showing. 

    Additionally, $39 is a lot of money. That is definitely seen as a risk as they pay that and have nothing to show for it. I might offer to allow them to print me off a free credit report from there credit card and do one of the online background checks (there are many way cheaper ) 

    Good luck!!

    1Reply
  • Jim Adrian
    Architect · Papillion, NE · Member since 2015 · 1k+ posts · 840 votes
    8y

    @Brad E.

    Your credit score maybe to high.  I would change it say 600 (recommended).  Anyone with a 620 score qualifies for a loan.  I haven't seen anyone with over a 575 credit for for my 2/1 that is a B- unit. People know there credit is shot and wont even apply knowing 620 is a deal breaker.  You really need to look at patterns and outstanding debt on the credit report.  Its pretty easy to trash a credit score. 

    I did a questionnaire before but had little luck on getting people to fill it out.  I would simply have a conversation with them to get some of those answers.  I think the $40 fee is fine as this is what I charge. 

    Now you have sat to long at that price and you need to drop it.   Also find comps of your place.  You should be looking for comps all year long.

    3Reply
  • Jimmy Dudley
    Real Estate Broker · Westminster, MD · Member since 2017 · 159 posts · 101 votes
    8y

    There is a magic number that always sells. The application fee is annoying but I don't know your area so it may be normal. 

    1Reply
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