I am new to the game and just acquired my first rental property, a quad, a few weeks ago. I am looking to fill all units for 1500 a month with leases to begin Sept 1. To qualify, an applicant's income must be 3x the rent with a credit score of over 650. I published my listing on all the platforms. I've received two applications so far, both with guarantors.
My questions are:
1) What should my policy be on guarantors?
2) Why am I getting interest only from such applicants?
3) Also, am I posting my listing too early (late June for a Sept 1 start date, with tenants currently in property)?
4) Does one have to do with the other?
Annecdotal evidence certainly, but here are my thoughts - 1) Guarantors can be treated like tenants, so long as you have the contractual background to ensure that they are fully and properly legally bound. In other words - the guarantor needs to sign EVERYTHING for you to properly be protected. Guarantors should be individuals and not entities (LLCs or corps), and you should for sure do plenty of background on them (honestly more than the tenant) to verify they have the repayment power should things go sideways.
2) This one is tough without a lot more info. Where is the building, how old is it, where do you lie on the low-mid-high end spectrum for housing, how close to industry, etc., etc. Overall, your rent requirements seem fairly reasonable from an industry standpoint as a whole, but the devil is in the details. That being said (addressing point 4) you are early in posting and it's the desperate that will be looking that far out, so isn't too surprising to me.
3) This could be the reason for the type of interest being received now, that's pretty early for the average renter to be looking.
4). Yes, I do believe this can and is having an impact. Also, you might want to be careful listing early. Though not quite as problematic as selling, if a property has been up for rent for long time with no agreement, there is a bit of an inherent worry - what's wrong with this that it hasn't rented in so long? You can ameliorate this a little bit by putting in the ad now something to the effect that this is an early listing and highlight the actual availability for move-in.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.
Annecdotal evidence certainly, but here are my thoughts - 1) Guarantors can be treated like tenants, so long as you have the contractual background to ensure that they are fully and properly legally bound. In other words - the guarantor needs to sign EVERYTHING for you to properly be protected. Guarantors should be individuals and not entities (LLCs or corps), and you should for sure do plenty of background on them (honestly more than the tenant) to verify they have the repayment power should things go sideways.
2) This one is tough without a lot more info. Where is the building, how old is it, where do you lie on the low-mid-high end spectrum for housing, how close to industry, etc., etc. Overall, your rent requirements seem fairly reasonable from an industry standpoint as a whole, but the devil is in the details. That being said (addressing point 4) you are early in posting and it's the desperate that will be looking that far out, so isn't too surprising to me.
3) This could be the reason for the type of interest being received now, that's pretty early for the average renter to be looking.
4). Yes, I do believe this can and is having an impact. Also, you might want to be careful listing early. Though not quite as problematic as selling, if a property has been up for rent for long time with no agreement, there is a bit of an inherent worry - what's wrong with this that it hasn't rented in so long? You can ameliorate this a little bit by putting in the ad now something to the effect that this is an early listing and highlight the actual availability for move-in.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.
Thanks so much Jason - I was particularly struck by your point about the connection between the response I'm getting and the time of my listing: ("it's the desperate that will be looking that far out, so isn't too surprising to me.") I've already put the fact that the unit isn't available until Sept 1 in the listing, but perhaps I should remove the listing entirely(?) If I remove it, when is the optimal time to re-post? Sorry for all the follow-up questions but your feedback is really valuable!
1. Guarantors need to be screened as carefully as tenants.
2. It's too early to tell. This seems to me to be more by chance. An alternative would be that your screening criteria is too strict, but what you put in the post does not seem to be.
3. I'm fine with an early start date. You can have prospective tenants sign a deposit to hold agreement. I agree with Jason, this early might limit the interest.
4. Not sure, but rely on your (new) guarantor policy and you shouldn't have concern if the tenant has a guarantor.
1. Guarantors need to be screened as carefully as tenants.
2. It's too early to tell. This seems to me to be more by chance. An alternative would be that your screening criteria is too strict, but what you put in the post does not seem to be.
3. I'm fine with an early start date. You can have prospective tenants sign a deposit to hold agreement. I agree with Jason, this early might limit the interest.
4. Not sure, but rely on your (new) guarantor policy and you shouldn't have concern if the tenant has a guarantor.
Thanks Benjamin, I'm going to sit tight and wait then to see if I get more interest closer to the date.
@Emily B. Always happy to help! I also agree with the responses from Benjamin, especially number one. I don't have too strong opinion on removing now and putting it back up, though now that you have it up (and have clearly listed the actual move-in date) you can probably just leave it up. Just keep your standards up for the tenant and any potential guarantors and be patient as it's likely the more serious interest and applicants may come closer to a month to 2 weeks from move in.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.
@Emily B. Always happy to help! I also agree with the responses from Benjamin, especially number one. I don't have too strong opinion on removing now and putting it back up, though now that you have it up (and have clearly listed the actual move-in date) you can probably just leave it up. Just keep your standards up for the tenant and any potential guarantors and be patient as it's likely the more serious interest and applicants may come closer to a month to 2 weeks from move in.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.
My pleasure and best of luck moving forward!