Sign Lease Without Meeting Prospective Tenants?

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Sign Lease Without Meeting Prospective Tenants?

Priyanka K.
Rental Property Investor · Dallas, TX · Member since 2018 · 93 posts · 28 votes

I have two applicants for a SFR. Ironically booth are from Seattle and claim they are moving to Dallas for new jobs. They don't have the offer letters but have provided contacts to verify the new job offer. Their background and credit checks have come clean. I did reference checks and they look good! They also provided copy of driver's license. One is a military veteran.

They are willing to sign the lease and pay security (mail check or paypal). I am a bit hesitant in leasing to tenants without meeting them! Have you heard of any scams? Why would anyone sign a lase without looking at the property?

What additional checks should I do, if any?


thanks, priyanka 
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Marc Winter
Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
7y

Why are you hesitant?  Something uneasy in the back of your stomach?  

Listen to your gut--do not ever rent to someone that has not been to the property and inspected it.  It's just not good business practice.  

True, we live in a 'virtual' world, but photos, video walkthroughs or drone pix will not take the place of the actual tenant being inside the actual property they will actually be living in.  They gotta experience it, smell it and feel it.  

And if you are a self-manager, you need to do the same with the tenants (meet them) so you feel solidly confident about them living in your investment.

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  • Marc Winter
    Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
    7y

    Why are you hesitant?  Something uneasy in the back of your stomach?  

    Listen to your gut--do not ever rent to someone that has not been to the property and inspected it.  It's just not good business practice.  

    True, we live in a 'virtual' world, but photos, video walkthroughs or drone pix will not take the place of the actual tenant being inside the actual property they will actually be living in.  They gotta experience it, smell it and feel it.  

    And if you are a self-manager, you need to do the same with the tenants (meet them) so you feel solidly confident about them living in your investment.

    3Reply
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    7y

    Where did you advertise the properties to get the applicants?  

    Dallas is a very hot market right now and quality properties are difficult to find right now at the right price.  I would be interested to learn where you advertised and how detailed you were in your ad.  Did it have pictures?  Are you priced competitively below other properties in your area?

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    1Reply
  • Priyanka K.
    OP
    Rental Property Investor · Dallas, TX · Member since 2018 · 93 posts · 28 votes
    7y

    @Chris Clothier, I listed on MLS, I am a realtor as well and it syndicates over to multiple websites - zillow, realtor, trulia etc...

    Yes, I think I just priced it right per the ISD and other houses available for rent and yes, I agree, there are not many available in this neighborhood! They say their new job is in this area. I had many pictures and sent additional pictures to them through email.

    Thanks for your input!!

    1Reply
  • Levi T.Pro Member
    Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
    7y

    We have put plenty in our units in DC like this.. sometimes they show up and want out of the lease after moving in for a few weeks. Kinda getting a foothold type thing and they they can just roll out when they want, or did not vet the unit that well online thinking it was bigger, or better part of town. Up the deposit and move on to the next.

    1Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    7y

    I have had applicants that look GREAT on paper . Then .................I meet them .      Dont do it 

    2Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y

    @Matthew Paul

    I agree . The people in a video might not actually even be the real tenants . This sounds foolish and a haphazard way of doing things .

    1Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    7y

    @Priyanka K. I have rented to out of state people who did not visit the property in person. I was able to call a local business and verify the job. Make sure you can independently verify the phone number of the business is legitimate.

    As far as funds, I would require cashiers check or money order. Ask them to send it certified mail and give you the tracking number. Avoid checks or Paypal because both can be cancelled.

    I don't think doing Skype or Facetime is a bad idea either. Just make it clear to them on the phone that by taking the property sight unseen, they accept condition. I advise people against it and offer a Facetime tour so they can look at any detail they want.

    We get a lot of out-of-state renters because we have a lot of jobs and people moving into the area. They will take a property sight unseen because flying in to go property hunting is expensive. It is totally normal to me, but you need to do due diligence.

    3Reply
  • Patricia Steiner
    Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
    7y

    I recommend meeting the tenants whenever possible.  I personally would not paper lease to anyone.  As the owner, you have the greater risk. Being able to reiterate your expectations and walk the property with tenants are solid mitigants.  

    2Reply
  • Josue Vargas
    Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes
    7y

    @Priyanka K.

    I would be very hesitant to sign a lease without prospect tenant seeing the property.  Yes, there are scams all over the place for this type of transactions, but if you verified them, most likely they are genuine.  

    Are these the only qualify tenants so far?  Why not wait and find locals that can actually see the property?  

    I would strongly advice to not accept any sort of payment unless certified check mailed to you by their bank (local US banks - no PayPal, nor anything electronically, and then call the bank to confirm transaction).  Somewhat I have run into the check-electronic transfers, then two weeks later money is just gone!, after being verified by my bank.  Don't be a victim, do your due diligence.  

    2Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    7y

    @Priyanka K.

    I second the Skyping and the FaceTiming, although I prefer Google video chatting through the PC and Duo. I've been using the tech hard for business purposes (non-real estate) since 2009, watched it improve impressively year after year. Have a sitdown online with them. You have good scans of their picture IDs, do your best to verify that those are real.

    2Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    I never rent to anyone without a personal interview, usually two interviews. It is important that there personalities do not conflict with my expectations. Talking to someone over the phone or texting does not convey their true nature. I am extremely carful in selecting tenants. The facts are not enough, I need to read the person. You simply can not adiquitly screen from a distance.

    2Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y

    I’d have to say Looking over their Facebook ( if they have one) is the single greatest tool a landlord has to screen people

    1Reply
  • Matt M.
    Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
    7y

    @Priyanka K.

    Never would I rent to someone I haven’t met.

    1Reply
  • Lucia Rushton
    Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
    7y

    @Priyanka K.

    I would have them wire the money only. And consider using acutraq for the background etc. if they come up clean then you can feel more confident.

    1Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    If they want to send a payment greater than the rent with the intent of you passing the extra along to a "cousin" to pay moving costs your getting scammed.

    Applicants from away are usually scam artists attempting to con hobby landlords.

    1Reply
  • Frank Geiger
    Rental Property Investor · NC · Member since 2018 · 776 posts · 776 votes
    7y

    At the very least have a skype interview with them. I would say they are smart to try and find a place to live before relocating.

    1Reply
  • Alvin Sylvain
    Los Angeles · Member since 2018 · 466 posts · 471 votes
    7y

    I think it's perfectly reasonable to lease an apt sight-unseen in the situation as described. I mean, come on, you get a job in another state, you're short on funds, what are you supposed to do? Quit the old job 2 weeks early (income stops!) so you can drive down and search for an apt? (motel expenses!) And what do you do with all your STUFF in the interim? (Storage expenses!) So much easier to just find a place, send a check to lock it in, and on the scheduled date, move you and your stuff on down. Turn in the old keys, pick up the new keys, and get on with your life, with as little expense and disruption as possible.

    1Reply
  • Alex Smith
    Property Manager · Chattanooga, TN · Member since 2018 · 179 posts · 92 votes
    7y

    Priyanka,

    There is some good advice in here. If you feel more at ease meeting them in person before signing a lease, then you should do it. Like it's been said already, trust your gut. 

    I agree with Alvin. To help CYA, you can also have them sign a sight unseen addendum saying that they acknowledge that they haven't seen the house

    1Reply
  • Kevin Kunz
    Cherry Hill, NJ · Member since 2017 · 2 posts · 1 vote
    7y

    You can't find a similarly qualified candidate in the local area that you can meet with?  The more you talk to someone the more information they give you.  Background check and in depth  interviews are the best tools.

    1Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    @Alvin Sylvain

    "what are you supposed to do?"

    That's the tenants problem not the landlord. The landlord has the option to rent to someone local and is better off doing so. They should not give a dam about applicants from away. If a applicant from away wants to qualify they need to reduce a landlords risk otherwise they get rejected. They had better be prepared to jump through hoops or they are going to be s**t out of luck. This is not a business where we are forced to rent to just anyone only someone we want. As a applicant if you do not meet my requirements you need not apply.  

    1Reply
  • Jim Cummings
    Residential Real Estate Broker · College Station, TX · Member since 2013 · 1k+ posts · 969 votes
    7y

    @Priyanka K. 

    Depending upon how many local showings you are getting and how soon you feel the property might lease to a local, I would consider them with the following conditions:

    1. Written Acknowledgement they are accepting it Sight Unseen. 

    2. I could get the Security Deposit, and 2 Months Rent, sent via Certified Check. 

    3. All Funds to be NON-Refundable. I would credit the second Month's Rent back to them at end of 6 Months, if all went well, paid on time for 6 Months, etc.   

    1Reply
  • Alvin Sylvain
    Los Angeles · Member since 2018 · 466 posts · 471 votes
    7y
    Originally posted by @Thomas S.:

    @Alvin Sylvain

    "what are you supposed to do?"

    That's the tenants problem not the landlord. The landlord has the option to rent to someone local and is better off doing so. They should not give a dam about applicants from away. If a applicant from away wants to qualify they need to reduce a landlords risk otherwise they get rejected. They had better be prepared to jump through hoops or they are going to be s**t out of luck. This is not a business where we are forced to rent to just anyone only someone we want. As a applicant if you do not meet my requirements you need not apply.  

     I understand all that. I'm just saying that coming in from out of state shouldn't automatically disqualify someone. The background check services are nationwide and have the ability to vet anyone anywhere, so if there's an eviction or a bankruptcy or a 300 credit score or a felony rape conviction, that information should available no matter where the applicant hails from.

    If you can get all that info, and as necessary charge an extra application fee, what do you care if he's from next door or from Mars?

    1Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    "what do you care if he's from next door or from Mars?"

    I don't care as long as all those intending to live in the property are prepared to meet me for my personal interview faze of screening. That is not negotiable. If you want to live in my property I need to meet you in person first before I will approve. Prior to the personal interview I have all ready screened them in every other aspect and they are the most qualified. In reality, and knowing this is difficult for those from away, I generally just eliminate them early in screening so as not to waste my time on someone not able to meet.  I will ask early on if they can meet and their response will simplify the process.

    I usually eliminate applicants very quickly upfront without contacting them based on my "personal" requirements.

    1Reply
  • Grant Rothenburger
    Investor · Taylor Mill, KY · Member since 2016 · 2k+ posts · 964 votes
    7y

    I know it happens a lot, I would have them wire the funds or cashier check or money order. Certified mail with a tracking number.

    1Reply
  • Priyanka K.
    OP
    Rental Property Investor · Dallas, TX · Member since 2018 · 93 posts · 28 votes
    7y

    Thank you all with the input! …interesting point of views! I know I was hesitant about signing the lease without meeting the tenant and without they seeing the house as I have never done that before but there is always a first time. In this day and age, a lot of work is now possible virtually and I do not want to miss a fair chance of helping a genuine person. Of course, there are scams and we need to do additional checks to be sure.

    To be clear – it is not the scam that sends extra money. If it were a scam, they would not have applied and paid for background and credit check ($40). I carefully reviewed the reports, verified address on DL with reports and public records, talked to references and future employer. I will get security deposit through cozy which is the standard portal I use for local tenants as well.

    I have been in touch with the prospective tenant, talked and texted multiple times and found absolutely no holes in all the conversations and all the checks. 

    I have to agree with @Alvin Sylvain, being out of state should not disqualify anyone! 

    I am going to sign the lease and will post updates here!

    Thank you all again for your inputs!!

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