Please walk me through the process

9 Replies

We are closing on our first property on May 6th. We are going to start advertising shortly and would love it if someone could walk me through finding a tenant. I know to put my qualifications in my ad, but what happens after that? I know I have to give an application to anyone that asks, but what do you do after that? Do you start with calling landlords and employers? Then if they pass that phase do you have them pay for the background check?

I am just confused as to the order of what should happen when. Can anyone help?

A Lecture for New Investors by Nancy Neville

Okay, I understand it.I’ve been there.You’re tired of working for somebody else.You want to be your own boss.You want to make money.Houses are still selling rather cheap, depending on the area, and you think, now is the time to become a Landlord!Just buy a house, rent it out and money rolls in, just like that.

I’ve been on Bigger Pockets for several years and I cringe when I read that someone has just bought a house or a duplex, or a 4plex and they are soooooo excited, that they are about to burst, and then they ask the question.“WHAT DO I DO NOW”?

Oh my goodness!You mean they’re asking this question now, AFTER they purchased a home!Yikes!!!!

I see more and more people buying buildings for rentals and don’t have a clue what to do with them once they have them.

Being a Landlord is a very serious business!!!!I can’t stress this enough.The life of a landlord can be exciting and challenging, but it is 24/7 and it is a business of people management, and doing things legally and doing things right, and making decisions, bad or good.

This is a business of evictions, of fires, of break in’s, of damages, of being responsible for other people’s lives.What THEY (your tenants) do affects YOU!

There are laws to follow in order to make your building legally rentable.One is to have a C of A(Certificate of Acceptance) this is decided upon by the state, or county or city where you live.They have to approve this home to be a rental.Then you receive a C of O (Certificate of Acceptance) decided upon again by the local or state or county authorities. This states the home has been approved and available to be a rental.And some of these must be applied for every time a tenant moves.So check your state laws.

There are Landlord Tenant Laws, Building Codes, and laws that are not laws at all but based on a Judge’s opinion of whether or not a tenant did wrong or not.For instance, normal wear and tear.Judges have various opinions on what they deem normal wear and tear.

This is an Industry of thinking skills.This is an industry of holding your temper and implementing your lease agreement no matter what.You need to think like a Judge.You need to think reasonably.

You need to be a good listener.You need to be in control.

Once you buy a house you need to know how to keep that house and how to keep your tenants long term.

You need to know how to be all things in order to keep your tenants happy, yet make them know the rules of landlording and how to be good tenants.

I always say that one is only as good as the tools they have.You could be the greatest landlord in the world in mind and action, but if you don’t have the equipment, or the education, or the money to invest in the proper tools to make you successful, then you will never make it in this business.

It takes my breath away to read the stuff on here by new investors.And I understand that how can they know what they do not know?That is why I wish there was a Sticky Note on here for New Investors to post posts like mine (and maybe there is and I just don’t know it) that tells them to Read This First before Investing!!!

My husband and I were very successful in the business. (We are retired now due to his cancer). But we owned a huge house.And every time someone would come over and do work on something on the house, they would ask, “Wow are you a doctor?” and I would say no.And they would ask, “A lawyer?” And I would laugh and say no.I’m just a Landlord.And they would say, “Wow and that’s all that you do?”And I’d laugh again and say, “Yep that’s all that I do”.And they would reply.“Wow, I think I’ll become a landlord too”.

And that is the mindset of a new investor. When I say that’s all that I do, let me tell you what to expect in the life of a landlord and all that they do.

  • 3 am Christmas Eve Tenants call-Furnace went out.I get up, phone calls made, emergency call, expensive triple overtime to the Heating Contractor, Tenant has heat. Tenant Happy.Landlord sleepy.
  • 2 am Fire Dept. calls.Fire at such and such a place.We get dress. Blizzard outside.Drive to the home.Access the damages.Look at the big hole in the roof from the fire dept.Plan our strategy.Talk to tenants. Get our guys out to put a tarp over the roof.Meet in the morning with everyone to solve the problem, what to do with tenants, whose fault, where to go from here.
  • You have tenants parking their cars on the lawn
  • oHaving unauthorized guests
  • oDoing Drugs
  • oHaving a dog they shouldn’t have
  • oHoarders
  • oComplainers
  • o(In my case…drive by shootings, bullet holes in rentals, thievery)
  • oWater abuse
  • oDish on roofs when forbidden to have one on the roof
  • oAnd so much more
  • On top of being ready to take care of emergencies any time night or day, and solving tenant issues. You need to also take care of the following.
  • 1.Fixing up a vacant rental so it can be rented out again.
  • a.We had handy men to do most of this, but with 40 rentals my husband and I had to pitch in a do the labor ourselves as well.
  • b.I would paint the house and garages.
  • c.Husband would fix the repairs inside
  • 2.I would take care of the tenants.This entailed
  • a.Taking care of advertising the homes (usually we had more than one vacancy at a time)
  • b.Taking phone calls and screening tenants
  • c.Scheduling open houses
  • d.Staging the house
  • e.Interviewing the applicants
  • f.Making sure I double checked their application forms
  • i.Criteria
  • ii.Employers
  • iii.Verifying funds and income
  • 3.Typing up the lease and making sure they understood the lease
  • 4.Then making sure the Tenants abided by the lease agreement
  • 5.Paid their rent on time
  • 6.And sent that Notice to Quit for Non Payment of Rent the very first day rent is late.

On top of that I did my own evictions and I never lost a case and I dealt with the 36th District Court in Detroit.I won because I covered my butt by having everything in writing.I documented everything.Every phone call I made to them and every phone call they made to me.

I never complained to a tenant because they called regarding a repair.I listened when they told me they couldn’t pay their rent, but even though I understood their problem, I made them pay their rent anyway.

Landlording is about making tough decision and doing things you don’t like to have to do.

Landlording is a Business.

You have to not LOVE YOUR HOUSE.I can’t stress this enough.If you don’t know or understand that this is a business of evictions, damages, and injustices, and fixing this house up over and over again, you aren’t going to be happy let alone successful.

How I wish I could be there for every new investor to help them understand what it’s like to be a landlord BEFORE YOU INVEST.But I can’t and that’s really a shame because it something every new investor should dig into before they invest.

One last thing. Yes you need to have an accountant to file your taxes for you at the end of the year. Our industry involves huge sums of money in our rentals and other people's money. An Accountant knows how to get you back more money at the end of the year because they know the tax laws, not you! So please don't be cheap and try doing it yourself.

Nancy Neville

I already own 2 vacation homes that I rent out, very successfully. So I know very well the work that goes into it. In fact, running a STR is extremely demanding and requires several hours of work per day. But the way we get rentals is very different than the way you would for a LTR. We don't go through the same process you would a LTR.

What I was asking was what is the best order to screen tenants. I am confused about that piece of it so I wanted to ask advice. I assume you don't have every single person go as far as running the background and credit checks, right? How do you weed out which ones get that far?

Thanks for the lecture though.

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You would start by screening in the advertisement, i.e. minimum credit score [email protected]@ required, must pass credit checks/background checks, etc...

Hopefully that will "weed" out the ones that know they wont qualify. Next do a phone screening stating what you expect as a landlord from your tenants at this property, and reiterate the income requirements, and all background checks that you will be performing. Give them an application and tell them you will only look at it, once it's complete with app. fee.

Then check the applications and the ones that look promising you will want to run the checks on. When/if the checks come back ok start calling previous landlords and current employer.

Kristine, Congratulations on your purchase. I also do SFR in Minnesota and am currently in the process of finding and approving a tenant. I would highly recommend "Landlording on Autopilot" by Mike Butler. He has awesome tips on landlording.

Here's an example of how I do it.

*List the property and include as much detail as possible without getting to wordy, include the rent and monthly income they must make to qualify, usually 3X the rent. This helps eliminates a lot of unnecessary phone calls.

*Find a good pre-screening worksheet that you can use when taking phone calls. ( might be a good one in the forms on BP) You can eliminate a few more potential tenants this way.  Ask questions like, Do you smoke inside or outside. Don't ask if they smoke, they alway say no. How many adults, how many children, (state laws vary but most only allow 2 people per bedroom) If you have a two bedroom and 6 people in a family, you can eliminate them right away. Do they have first months rent and security deposit available right not. Do they have good land lord references.

* Schedule a showing and try get them all to show up 10-15 min apart. This save time for you and your current tenant.

* Have applications available at the showing. I let them fill out the apps there or they can mail them in.  I have them enclose a check for $35.00 per person for credit and background checks with the application. Watch to see if they remove their shoes, smell like smoke, dress nice, walk them to their car, is it clean? You can tell a lot just from observing.

* Once I get an application, I read it over carefully, make sure the time lines work. If there is a gap in where they lived for a few month or year, are they trying to hide a bad landlord reference. Don't call the current landlord first, it might be in their best interest to get rid of the current applicant so they might not be truthful. Call the one previous, they are the best. Contact the current employer and verify the income, once you have covered all that an everything still looks good, now its time to cash the check and do a background/credit check. 

*At this point you either accept the tenant or you send a letter of denial explaining why. If you denied them go on to the next application and repeat.

If you accepted the first applicant, return any checks from other applicants explaining that the vacancy was filled.

Keep a file for each tenant with all the paperwork involved with this process.

I also keep the paperwork (prescreening worksheets) on the contact in case I have a vacancy in the next few weeks, I can always call them back with out advertising.

*Do you research on what you should keep and have on hand in case of a lawsuit.

* My realtor also has rentals, so that has been a good source of information for me.

Good Luck!

Congrats on taking action and getting your first rental! I suggest taking a look at these links for more info. Once you find/create your process, document it and automate it as much as possible! It will help keep you sane and will make your process more repeatable and hopefully scalable.

BiggerPockets' Tenant Screening: The Ultimate Guide

Landlordology's Guide to Tenant Screening

Landlordology - Tenant Screening 101 video

I also would put in a vote for the "Landlording on Autopilot" by Mike Butler. That was one of the first real estate books I ever purchased and I still refer to it.

DISCLAIMER: I love BP and I also enjoy I am not affiliated with either site/company other than being a happy customer of each. :)

One tip if you're putting any signs out. I put a sign that only states XX bed / XX bath in the yard, and I roll up the blinds around the house and put the details with contact info on a sheet of paper and tape it to the inside of the windows. By the time someone calls they have already seen in the house because they took the time to get out of the car and LOOK rather than just call as they drove by. The sign has the price per month, deposit, pet yes/no, and other pertinent screening info on it. Helps to weed out tenants before they ever bother with a phone call. 

One other tip about getting landlord references. Instead of calling the previous landlords and asking them random questions about your applicant, just ask the previous landlord for their email address and go to and request a landlord reference online. This way, you will only be able to ask questions that are legal, and you will have a paper trail. Because if you deny someone based on the landlord reference, you have to notify the applicant about it. Now you have a record of your interaction with a previous landlord that you can present as evidence. That's just one reason.

Lots of great advice here! Agreed, put qualifications in the ad.  I also hand out a sheet with all the information to the people as they view the property. It clearly lists all the information needed in order to be approved. Income needed, references needed, let them know a background and credit check will be done. This weeds out most.  For credit and background checks, we use Smartmove. They make it super easy. Of course there are other services out there that make credit and background checks simple.  Congrats and best of luck to you!!