Hello BP- i just purchased my first multi family in NJ. I renovated and listed one apartment on Craigslist and Zillow. I clearly stated in the add; credit, backround check, income verification and refrences required. I am getting a few emails about prospects wanting to see the property. Should i show the property first then have them fill out the application and sumbit backround info or vice versa? Is there a generic rental application most people use? Thanks!!
Yes, they should look at it before applying. You may be wasting time if you let them apply sight unseen.
If you use an online application processing service, the tenants can probably fill out the application online.
You do pre screening by phone or e=mil first to get a general idea if they will pass screening, you then show and if interested they submit a application to allow full screening.
I'll share our process, but it's certainly not the only way to do things! We pre-screen interested individuals before offering to show them the property (we have them verify they make at least 3x the rent in monthly income/if they smoke/what kinds of pets/requested move-in date/etc. Once they assure us they meet our pre-qualifications, I give them a few timeframes to pick from to see the property. I schedule all showings over a couple of evenings, and set them at half hour intervals. I know others have success with showing the property to several applicants at the same time, but this method has worked out well for us. At the showing, I have applications available for people to fill out. Sometimes people ask to fill out an application before viewing the property, esp. in high demand areas, in which case I will email them an app, but again, only after they meet the screening criteria.
Our application is pretty detailed; I don't use a generic form. The template I used as a base for creating our app came from Mike Butler's book, Landlording on Autopilot (but we have tweaked over time). There are some great tips in there on what to ask for in an application and why!
Next, we process one application at a time, and don't do background checks until everything else on the application has been verified, and all looks good. The background/credit check is basically the last report, to make sure that everything checks out and that there are no red flags.
Hope that helps!
I use Zillow as well. I do not allow an application be filled out without them seeing the property. This satisfies a couple of important conditions. I am able to meet and visit with the people, I see what kind of car they drive and get a feel for the perspective tenant. I go over the requirements again.
We are all so accustomed to using social media where there is little one on one contact. I believe this is a mistake. Pre-screen on the phone. It will save you time as well as them. Everyone has a story; credit challenges, no job, divorce, etc. It is your job to identify the important factors.
I schedule tenants with a time frame. An example would be between 1 and 3 on Saturday. I am not worried if they come at the same time. If you were flipping the property you would love to have multiple people at the same time. It shows the property is in a hot area and they will need to decide quickly.
I will send the applications out by email. Last week I sent out three and had one return it. If they meet my criteria at that time I let them know I will need the application fee. The fee must be cash or money order or other certified funds. I charge $41 per tenant 18 and over. I only charge what I am charged I make no money on the application.
Be careful to treat everyone the same. No discriminatory tactics.
If the background checks out (Credit check, criminal check and eviction check), I verify employment, talk to previous landlords, request banking information. If all checks out I contact them and make arrangements to sign the lease. Funds must be certified funds i.e., money order, cashiers check etc. I give them info on the city for water/sewer, garbage pick-up, electric and gas companies, etc.
Hope this helps. Good Luck.
Thanks everyone- great feedback!!
@Vincent P. We fill a lot of rentals here in CT for clients and our own rentals. This is the process we follow when someone contacts us regarding a rental.
1. Come up with pre-screening criteria to run by every applicant when they inquire. Have these criteria available so you can copy and paste in text messages and emails it makes the process a lot smoother.
2. Some examples of pre-screening minimum criteria may be: "Here are the landlords minimum requirements: they will not consider anyone with any previous felonies or evictions, they will look for a minimum take home income of 3 times the monthly rent per month, and will look for a minimum credit score of 600." Make sure your pre-screening communication is exactly the same for each inquiry so you can't get accused of anything down the line.
3. From there, the tenant candidate will either disqualify themselves, have follow up questions, or you will proceed to schedule an appointment to view.
This is a big time saver and keeps you from taking time to show the apartment to people who wouldn't qualify anyway which is just a big waste of time for everyone involved. The key to all of this is to stay consistent, and make sure you have criteria that is reasonable for the type of area the apartment is in. If you do not have experience filling rental units or just don't want to deal with the hassle it may not be a bad idea to hire a professional to fill the unit for you. Mistakes made in tenant screening will cost you a whole lot more than the fee you will pay an agent to fill the apartment for you.
For all inquiries, I send the same e-mail, the only change being if appointment times are already filled. It states "typical qualifications" and then a sentence about space provided at end of application if they want any exceptions to these qualifications considered. For those who then want to set an appointment to show (usually a 2-hour window on a weekend), I e-mail the application with a statement that I accept applications at their showing appt or any time thereafter, not before they've seen the unit. While I do set appointments at 1/2-hour intervals, I've also added letting more than one applicant come at the same time as I've had too many people cancel the day of the appointment saying they got tied up and want to reschedule.
When you show an open apartment, it is a bi-directional process. Not only are prospective tenants getting a chance to view the apartment, you are getting a chane to view the prospective tenants. This gives you a chance to learn a little about them as well, observing things like neatness of themselves, what kind of car they drive, do they smell like smoke (especially if no-smoking), and other things. Kind of like a job interview. Both sides are checking each other out.
I always pre screen them on the telephone. Some interested parties are not worth the property visit. And some scheduled property visits will be no shows.
There are really two ways to look at this. On the one hand, doing in-depth screening before you even show the property saves you a lot of time by weeding out people that don't meet your criteria. On the other hand, you will scare off some prospective tenants if you make them apply before they even get to see the property.
I think the best solution, as stated in some other responses is to thoroughly pre-screen people over the phone, here's a simple list of 7 questions that will get you headed down the right path.
1. Is this rental for you or someone else?
2. Why are you moving?
3. What is your planned move-in date?
4. How many people do you plan on living with?
5. What’s your current monthly income?
6. Can you provide employer and landlord references?
7. Are you willing to submit a credit and background check?
If you make it through those I would say, time for a showing. If you wanted to go a step further, you could do credit and background checks after this call, before screening but this still may scare some potentials away if there's a lot of competition out there that are willing to do showings pre screening.
Feel free to DM me if you want to chat a little more about this, I have a few good resources I could dig up and share with you on tenant screening that may make this all a little easier for you to find good tenants for your properties.
I'm a remote LL so showing is a problem (it's 2hrs one-way). I have a box on the wall with applications and the the prospect to get one and fax it to me; when I get it we can THEN schedule a showing. This gives me time to run the screening process. Some prospects will not comply - - so what - - I didn't have to do the screening. For those that do AND pass screening, I invite them for a walk thru and ask them to be ready to sign and make the deposit *IF* they want the unit.
It's worked for almost two decades for me.
Another great option if you want to save some time is to have them apply first and do the basic credit / criminal screening, but discount the application fee off the first month's rent if they end up moving in. This way you can have the basics on the applicant prior to showing and do a more in-depth screen / reference calls after they see it.
Also if safety is a concern having basic information on the renter prior to a showing greatly reduces any safety risk.
This also gives you the advantage of not wasting time showing the unit to less-than-serious or unqualified applicants.
Of course you have to do a good job at marketing the unit so you have enough people interested to be able to request application first.
We've found this to be a very popular combination for our landlords.
@Vincent P. as others have stated on here I would only run the background check/screening on the tenants you are seriously considering. You don't want to deal with someone requesting a refund for the screening fee if they were never seriously considered.
You should be able to find a free online application so that you can narrow down the potential candidates without either of you paying anything until the screening.
Thanks everyone- great information. I been asking everyone the same questions and after mentioning the credit and backround check, never heard back from some candidates. Will keep everyone posted how it progresses. Makes it easy the property is 1 mile from my own home.