Real Estate Agent · Salt Lake City, UT · Member since 2017 · 13 posts · 8 votes
Hi all! I'm new to BP and new to this real estate investing world. My husband and I are under contract for our first intentional investment property (to which we will be moving and renting out the basement.) We own our current home and have listed it for rent. This is where I need help.
Its been listed on a well known online local classified site since 2/12 and I've had a steady stream of people calling and coming to see it, and have gotten a handful of applications. The problem is the quality of applicants has been pretty poor. I'm getting all the people with sob stories, who barely make the minimum 3X rent, have past bankruptcies, have unreliable rental history (renting from family, or other "landlords" that seem questionable), people who smoke, illegal immigrants who work under the table and don't have verifiable income, etc. (the list goes on).
Here is the listing:
https://www.ksl.com/homes/listing/rentler/?ad=1793458
Am I doing something wrong? Could it be that I'm asking too much for rent? Any thoughts or suggestions?
Investor · Juneau, AK · Member since 2015 · 980 posts · 741 votes
9y
You will get better and better at this over time Kenya! There are lots of tips on BP for the overall process. Here are some quick, general ideas.
Some good news:
1. The place shows well (I might take down a few photos and the cat tree but otherwise looks good).
2. Interest is high (so the ad and marketing is working)
3. Your application or process is screening out those that are not a good fit (actually good news, more than bad; bad news being they are getting through and becoming your problem tenants).
Some Ideas:
1. Check the "all in" costs of comps. The ad would seem to pre-screen tenants some financially with the terms: deposit (2.4K) and rent amount (1.5) or $3,900 to move in. Decent chunk of change for your target market I would guess. But I might double check if that is common for the move in cost for comps. It could be that the very best, most creditworthy tenants are getting the better deal or lower move in costs (savvy shoppers) and know the opportunity costs of money. Or you could add more specific screening criteria up front in your post if you want to narrow the funnel more (you do state credit and background check, so maybe they are not reading it all; so less could be more in the info on the listing, or position it higher/more prominent/ALL CAP CREDIT CHECK, etc).
2. Be realistic, but don't settle. Renters in general are financially fragile in America (see this study for example:
So you want to be realistic, without settling. That is, get the best possible renter for your market and your property. But keep in mind those with ideal credit and work history may well own or be buying (like you!). Make sure your process and criteria can realistically and reliably produce people who pay the rent and respect the property. They need not be perfect.
3. Vacancy beats a deadbeat any day. I would keep marketing, maybe try a new channel or two with a different demographic, keep polishing the place up, and accepting applications until you get someone who meets your criteria. A strong tenant could be your next call.
4. Keep Improving the Process:
Study your market, make any necessary adjustments to terms or price or application process. For example, would a six month renewable be worthwhile or a slightly lower deposit.
Have an honest third person go through the mock showing/open house, and application and get feedback (smells, fees, deposit amount, curb appeal, rapport, etc). Make sure a strong renter will not be deterred at any point. Ask specifically about any defects in the process.
The pet on approval angle might be one to sell more (but just leave it at that and pull the cat clues if possible for showings). The stronger "cat" friendly bias in the ad may turn off some good renters from applying.
I would put No Smoking in the ad to screen them and not waste their time or yours (not sure if that was in the details).
Make sure the applicants can see themselves (psychologically) in the place, so the very personal items might be taken out for showings.
Imagine your target market (e.g., young professional couple with a pet, etc) and gear the marketing process to them and what might appeal.
Residential Real Estate Broker · Chicago Suburbs, IL · Member since 2013 · 1k+ posts · 594 votes
9y
@Account Closed
Yes, desired move-in date is important. I have had people who want to see it and want to move 4 months from now! And then they get upset when you still won't show it to them anyway. Like it's their right or something to be able to see the place.
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
9y
After doing this a while, my fear is ending up with a turd more than the desire to get the extra extra outstanding perfect renter that will likely buy in a year anyway. Similar to what you are doing.
It sounds like there are some qualification questions in your ad. Only get back to the ones that have answered completely with good answers. I use some key screening questions and no phone number (yet). Sometimes I don't give my ph# until move-in, but that's just me. Answering the same questions over and over from strangers on the phone is not my idea of fun!
I simply ask: How many people? How many animals? Does anyone smoke? When would you like to move? Is this far from your work? I then add: "We check references and are an equal opportunity housing provider."
The folks that answered with their full name (key) and all questions answered favorably get a response. Save your sanity and hang in there! May be a seasonal issue now as mentioned. I have 2 openings and am being patient. Wait for the good one. I have yet to regret patiently waiting for a quality renter.
Investor · Lehi, UT · Member since 2016 · 27 posts · 3 votes
9y
This is not uncommon. The important thing is to be patient. A bad tenant can cost way more than having to wait a few more weeks. I get these bad applications often, and believe everybody does.
Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
9y
Another tip is in your ad say offered by "KA Prop Mgmt" might give renters the idea it's a larger type company and weed out the low life and encourage the others.. It's the terms sometimes in the ad that makes and sets the tone for whom responds.