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!
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.
Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
8y
I think you have a couple of opportunities to maybe bring in more applicants. But keep in mind one thing, it could be the time of year too. Not as many renters tend to change during the dec thru feb timeframe - at least not here in Illinois.
1) Price. The fact that the unit next to yours is going for $525 and you're asking $695 is a bit of a red flag. But an even bigger red flag is that you're getting 37 showings (based on questionnaires) and only 1 application. That means you're overpriced. Unless your application fee is above and beyond anyone else's in the market, there's no other explanation other than you're overpriced.
I'd throw in the caveat to that though that this time of year sometimes you have to be a little lower than market to get someone to pull the trigger. Far more tire kickers out there right now.
2) Application process. Your application process may be turning some people off for sure. $39 is a pricey fee. At some point, renters get tired of getting dinged for application fees.
One suggestion is to make the application submission free. Go through the applications and pick out the one that you think is best and just eat the cost of the background check and run it against them. If it comes back good, then take them. If not, then move on.
Ultimately, you'll get more applications to choose from and should be able to start with the ones that look the most promising.
For me, my goal is to get as many people as possible to submit an application. That means they're very interested. If not, they're not giving me their personal information and authorizing a credit check. And the more I get, the more likely I am to have a better tenant pool to pick from.
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
8y
Lots of good advice here, just wanted to add that this time of year is extremely tough, so if you do rent it out successfully in the next 30 days or so and you like 1-year leases, ask them if they'll sign a 15-month, so that the next turnover is more likely to be in the spring/summer season if all goes well. They may appreciate moving next time in warmer weather as well. No sense setting yourself up for another January turnover if you can avoid it.
Get rid of the questionnaire!!! I'm renting the exact same thing here in Richmond (2/1 duplex unit) and can't imagine getting anyone without seeing the place to answer a ton of questions. People are private about their information. Also, call me selfish, but I don't want to waste my time investigating or learning about someone, when they haven't even seen the place and liked it, and stated they want to move forward.
I only schedule 1-2 showings on the weekends, and plan to have everyone go to either of those. I do NOT do personal showings unless it's an A++ candidate. I'd highly recommend you try this out! People want to see the place before giving a lot of information. Personally, to me i'd just be a ton of hoops to jump through, and if you don't even like the place, why would you do that? Get rid of that, schedule all the showings for 1 or 2 times, and see what happens!
Also, I'm a big fan of copy/paste, so have your generic email with all the information (price/qualification/showing date) and copy/paste to everyone you get, it's quick/easy and efficient! After a few emails, you will see who is genuinely interested, and who isn't.. and also, send a follow up email/text roughly 1 hr before the showing.. you're dealing with C clients, not A! People think I'm so quick to respond-- shhhhhh, it's copy/pasting! :)
I'd drop the credit score all together or min of 550? .. I'd say you want to see it to see debts, but the score thing IMO doesn't work in C areas.. just my personal opinion, their background with jobs and moving will tell you what you need to know.
Lastly, I don't deal with any information with the potential tenant as far as screening, checking, verifying until they apply. Majority won't apply, for whatever reason.. when they apply, then I see them as serious and worth my time investigating.. but until that, don't stress and waste your time! Work smarter, not harder!
Property Manager · Dallas, TX · Member since 2016 · 1 post · 0 votes
8y
Why don't you turn it over to a property management company...You are wasting time, and money as well as more time and money trying to do long term management part time & I bet in the future ...not considering court costs, more rehab, repairs, late rents, problems raising the rent, paperwork......Hmmmm
Property management Co not worth the 7%? It is to me.
Rental Property Investor · Vista, CA · Member since 2017 · 50 posts · 28 votes
8y
I didn't read all the replies, but looks like you got some great advice. I've been a landlord for over 10 years and wouldn't think of giving the job away to a PM—until I have too many to manage anyway. ;D
As long as you've taken care of general maintenance, getting a new tenant is the hardest part of being a landlord. My tenants stay for years with little effort on my part, but I do pick them carefully by meeting all of them face-to-face. I would get rid of the prescreening process and have a couple of scheduled showings on the weekend. I don't like to do private showings because it takes too much of my time—and having prospective tenants all show up at once puts a bit of competition on their side to move forward or miss out.
I haven't done this yet myself, but I've heard of landlords insisting that they pick up the completed application from the prospective tenant at their current place of residence so that they can get an idea of how they live. This is perhaps the best screening you could do if you care about your property. ;)
I also do not charge an application fee, I only take money to run a credit check if I have it down to the one I would choose to be my tenant. If the credit check was bad, meaning they had a poor rental history or never paid their bills on time, I'd move on to the next one. I don't necessarily look at credit scores if all other checks pass. The key is you want to find a tenant that will stay a very long time and take care of your property like it's their own. Whenever a tenant leaves, you have to get the place cleaned up and painted and then start all over again, so you want to keep them as long as possible.
One last piece of advice is to raise rents slowly and steadily with the market rate, so you don't find yourself having to raise it significantly to "catch up". I like to keep my rents just under market so they get rented easily and my tenants stay happy. Raising the rent a certain percentage every year will keep you up with the market, as well as train your tenants to expect the increase year after year.
Hope that helps—good luck and let us know how it goes!!!
Red Bluff, CA · Member since 2017 · 10 posts · 1 vote
8y
I’m new to the game, but I would say get em in the door first. The stats easily show its your questionnaire. Good response rate, horrible close rate.
It’s hard enough getting people to follow any funnel online, with attention spans being so short, just not worth the expense of holding costs.
Are there any questions that would be acceptable to ask in person?
Insurance Agent · Phoenix, AZ · Member since 2014 · 148 posts · 66 votes
8y
Before we went to property management I of course had to do this myself. I would post a very simple ad with photos and have them call me. There I could build rapport with somebody over the phone and I found they would then put in the extra effort to complete my application if I saw them to be a good fit. I too used Cozy which is fantastic. I would consider offering to refund the app fee after signing a lease. Hook em on the phone!
Greer, SC · Member since 2017 · 35 posts · 28 votes
8y
I personally don't worry too much about credit score. I am more concerned to verify steady employment and income stream. I get pay stubs and W2. I require 4x the rent in income to qualify.
Goshen, NY · Member since 2017 · 60 posts · 14 votes
8y
From having worked in marketing and lead generation for fifteen years I can tell you pretty confidently that the questionnaire is your problem. An 80% drop off in the lead funnel from initial inquiry to questionnaire submission is horrendous from people that have already found you and decided to inquire with you. Require bare minimum information (and nothing that isn’t critical and you don’t use immediately) and consider making it a two step questionnaire instead of having it all on one page. Watch your showings jump dramatically.
Investor · Philadelphia, PA · Member since 2017 · 48 posts · 12 votes
8y
I have rented my places for 8 years now. I have never ran a credit report. I have evicted 1 tenant out of 15 + tenants. Raise rent or require more security for lower credit.
I also prioritize landlord references and pay stubs.
Claremont, NH · Member since 2017 · 14 posts · 5 votes
8y
your requirements are too strict for a C+
include everything and raise rent accordingly. screw the credit score, if they had good credit and money they would own. you can learn a lot from talking to them and asking face to face if there is anything they feel they should know about them up front. most people are pretty open and would rather disclose anything than have you find out from someone else. ask for references, but don't check them - talk with former landlords and bosses as they will give you the information you are looking for. good luck!
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
8y
@Brad E. if you'd be willing to lower your rent by $50 a month, that adds up to $600 a year. Save yourself $100 and offer $500 off the first month's rent. Put that in CAPITAL LETTERS in your ad. You'll probably get more interest.
Investor · Jacksonville, FL · Member since 2015 · 76 posts · 22 votes
8y
I agree with most, that questionnaire is too long. app fee is probably high and credit score is way to high in my opinion. I have 8 units of my own and manage over 200. I have found that a better indicator of an applicant is looking at their debt to income ratio and rent to income ratio. we still look at credit and its very important but if their credit is 575 or 600 and they make 3x rent and debt is low sign them up!
The best tenants usually don't have perfect financials the ones that do buy a house and move out quick.
Pasadena, CA · Member since 2017 · 9 posts · 5 votes
8y
As many would agree the process is quite burdensome.. I’ve been in sales my whole life and I would first recommend an (exhibit) show them the place so that they can fall in love first.. Appointments first; and set hours where you’re available to show them the place.. the credit score is too high for a C+ neighborhood I would suggest lowering it.. third don’t be afraid to raise the monthly rent. Increasing the rent a bit would catch you a better and more reliable tenant.
If this is too much work find a small but not the smallest property management company in your area they can take care of it for you...
Ultimately you do want the freedom and not the workload.
Real Estate Agent · Augusta, GA · Member since 2017 · 71 posts · 22 votes
8y
If it is hard to rent you may want to hire a brokerage. Usually they charge 10 percent, but if you keep reducing your price, you will be paying that anyway. I would look at a lower credit score but only if you do a rental verification and collect a double deposit.
I like to keep my questionnaire short and sweet. It helps weed out the tire kickers and gives a decent amount of info on the potential tenant.
Thank you for your interest in the unit. I'd love to schedule a showing but before I do, please reply with the following information
1- What is your Total Monthly Gross Income?
2- How long have you worked at your current job?
3- Why are you leaving your current living situation?
4- Have you ever been evicted?
5- Have you ever been convicted of a felony?
6- Do you smoke?
7- When are you looking to move?
Yes, sounds like you got your bases covered.
I now do all my showings through open houses, about 2 or 3 of them, and I prequalify them through phone calls as I don't include addresses in my ads. But I casually chat with them, ask them what they want to know about the place first, and during this, they reveal some of the points above. Your did not include an important one "how many people would be living there". I copy down their names, what they said, and when they come to the open house, compare what they tell me to things they said over the phone. I caught a few liars this way, and almost rented to a women where almost everything she said was a lie, including where she worked and omitted an eviction. I normally don't order eviction reports, but learned and do now. She had a friend posing as her supervisor when I did a preliminary check at her job. The bank branch she supposedly worked at didn't exist.
At first, I used to try screening out tire kickers, but I got into heated arguments with some, and I heard that the city and the local NAACP send testers to test you. What I do now is tell everyone, I'll be there all day, and all are welcomed to come. With this, I avoid charges of discrimination.
Then I found tire kickers useful. At one of my open houses, I had several prospects, including a couple whose wife is a VP at the local utility for 20 years making $125K/year. I eyeballed the application, told them they looked good, and thought I found a good one. It was the 1st week of May, and they said they need it July first. I was very disappointed as I had others who need it right away. Then I told them, lots of people want the place, when I said that, the place was crowded. He said 'I see that, I'll see what I can do and speak to my landlord". Called me back that afternoon and told me his landlord is OK with him leaving after he told him how jammed up my place was, and he can rent up my place the following week. The reason he gave was he want his current landlord to have plenty of notice, and I appreciate that. There were two tire kickers there at that point that enabled me to rent out the place 1-1/2 month sooner to an A plus tenant. I couldn't have staged it better.
Make sure you see their ID's AFTER they filled out the application. Also make sure you personally seen all the roommates. One guy filled out the application, and told me he left his wallet home when I ask for his ID. Then he said his nephew and soon to be wife will live with him. So I said I need to see them and his ID and he said he'll bring his nephew but his bride is still in Nigeria. A day later, he bought his bother over, and I had his brother will live there instead of the nephew. When I saw the application, the brother had a different last name, so the explanation was it's half brother. I asked this man for his ID and after a moment of hesitation pulled out his wallet and the it's yet another name on the license. Explained he use another name at work. I now asked the original applicant if he bought his ID, and he forgot it again. At his point, I got real nervous, it's 6 PM, no ones around, and I could be in the presence of two terrorists.
One last thing. Make sure prospects don't bulldozed you into saying their the first one to see the place. If you say, yeh, you're the first one, be ready to explain why someone who came later is better, particularly if they meet all your minimum requirements. I made that mistake years ago with a girl who's a law student, signed the lease with her, collected the deposit, and the apartment will be ready in two weeks. She was such a PITA, that every day she called about needing bars on windows, new locks, and an alarm, and a few dozen more things. Finally, I had it with her, I told her I need another month to work on the place and returned her deposit. So when a man several years later called me 7:00AM Saturday morning about an apartment, said it's the first time I advertised it, I said "no it's not". Then he said "how could that be, I checked the papers going back a few weeks already". Then I said "you mean all the English newspapers, but you didn't check the Chinese papers did you?". He sound dejected, and said "I guess I lost another one". So I said "no, everyone is welcome to see it, so long as you meet all the requirements". One thing nice about open houses is no one can claim to be the first one there and especially if the place is jammed packed. Once, I had too many, had a line outside the door. Then I found someone down the street on line, asked him if he needed the apartment, and he told me "no, I just came to see what the excitement was about".
And finally, I wouldn't have been able to do all of this using pre-screening on line.
Investor · Chattanooga, TN · Member since 2017 · 68 posts · 28 votes
8y
Mark Faustrum That is exactly what I do. Cozy.co provides an efficient service at the point of sale (rent). It can also be used after this for several things like maintenance requests from the tenant to keep you informed of what’s going on inside the unit. But it mainly performs a background/credit check on my top applicant(s) before I send them a lease agreement.
Chicago, IL · Member since 2017 · 16 posts · 8 votes
8y
There are a few options you could try and that is going to a trusted broker. They will list it and usually their fee is half of the deposit which they charge for the first month.
Also being that it is a C neighborhood I would lower your requirements and look more into what’s causing their lower than desired credit history. Sometimes it can be a student loan from 10 years + and also limiting your income to 2.5 the rent. Also by not allowing pets your giving up a huge market. You can charge a non refundable 200 dollar pet fee that essentially goes right into your pocket and exclude high risk insurance dogs such as pit bulls(even though I have one and they are the best!)
Ask did you check your current rental rates in the area/is your property in a complex comprised of multiple buildings with different owners? If so that may be hurting your bottom line.
When we have trouble renting we try to get as many applications as possible with a business model of no application fee and if accepted we offer a $50 gift card to a store that is most used in that area like target or a grocery store.
You don’t want to limit your exposure by having people who think they won’t meet requirements not apply due to that and the application fee. Have them apply and based on your standards it’s always easy to reject people.
Hope this helps!
Cramer
Real Estate Investor · Brooklyn, NY · Member since 2014 · 9 posts · 5 votes
8y
Brad,
I just rented my 1st unit- after I renovated it in under 30 days. I also raised the rent $300 days. It was previously a $1500 a month and I got it up to $1850. I was freaking out myself because construction ran late and we didn't list it until the week before Christmas. So I barely got prospects and the ones I did get- well I thought I was going to have to rob a bank! While I am no expert, I fell your pain and thought I could provide my opinion.
NO do not lower your credit score based off of nobody. I am also a professional sales person. Google "at-bats" or sabre metrics. You are not even letting anyone a chance to get up to the plate! I have been a renter in NYC and Boston for the last 10+ years. People look search from their phones not desktops. They want to stay on the apartment app not get forwarded to questionnaires. They get to yours and are like "WTF". Do me a favor- check out your listing on a mobile device. Or ask a friend. It should be painless to set up a showing appointment from a device to see your stunning appointment!!!
New goal- get as many people in your apartment as possible. The freaks, the crazies, everyone. This is a business. The more people you show this to you the more likely you will get a "renter". You are automatically disqualifying people. Delete every posting and then re-post!
Then during that showing- if they like it you discuss qualifications. They will ask. People who rent come ready to rent. TAKE EVERYTHING OFF OF YOUR LISTING.
Don't lower your standards to rent. But absolutely make it easy for anyone to come see your apartment. It's also about the tenant. I had a graduate student with a 720 credit score and 100k cash apply ( to me this is not an ideal tenant)-- because that money can be gone tomorrow). How will they keep paying me? Its the whole picture? Proof of income + credit report+ employment history!
Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
8y
Lots of good advice...... one thing I think is INCORRECT in some of these replies.....the $39 is NOT AN APPLICATION FEE....... the application should be FREE.....once they are really interested, then they pay the $39 for the BACKGROUND AND CREDIT report.....DONT CALL OR REFER TO IT AS AN APPLICATION FEE........its not...... the application is free, the credit report and background check is not.....but that's not run until they want to move to the next step and show real interest.
No way am I eating the cost to do the credit report and background check...if they can't afford $39 to do it, then how the hell are they going to pay me rent every single month?
Drop the price....drop the credit score lower..... FREE APPLICATION, offer written and online.....drop the initial questionnaire..... just give them the list of your qualification.....do group showings.....take applications......once they are convinced they want to move forward, then have them pay to do the credit check etc....
Schaumburg, IL · Member since 2017 · 38 posts · 49 votes
8y
If somebody is going to rent a cheap place in a midgrade neighborhood, their credit sucks anyway. Look into the court records of counties they can verify they lived to find any history of eviction for all the adults who will stay in the apartment. You can do this for free online.
Insist on personal references from applicants and talk to them to be certain they are who they say they are. These are the people who will know how to contact the tenant in the event of a problem. Call their job references and see if they are good employees. Their current boss can tell you if they are likely to have an ongoing job.
Charge the neighborhood standard amount of security deposit. Some places can only get one month and not two. Make allowances for the condition of the house. There may be something that is repellant that a tenant will accept if there is some concession on your part.
If you use this you can avoid some of the background check fees. If you are going to rent in these areas you have some additional risk that you are going to have to face in exchange for the high rent to low-cost ratio.
Definitely, follow some of the advice above regarding showings. If you schedule everyone at one time, you will get several applications just because of the competition. All those people will make your place seem like everybody wants it and tenant prospects will act out of urgency and fear of loss.