Am I scaring away potential tenants?

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Am I scaring away potential tenants?

Maria Crenshaw
Member since 2017 · 11 posts · 3 votes

I have a condo listed for rent on all the major sites. I'm getting a fair bit of interest but every tenant who inquires disappears as soon as I share the following qualification standards with them. Am I scaring them away or is this just good filtering?

Qualification Standards

Applicants must meet minimum screening standards to be considered:

 Applicant must have current photo identification and a valid social security number.

 Applicant's monthly household income must exceed three times the rent. All income must be from a

verifiable source. Unverifiable income will not be considered.

 Applicants must receive positive references from all previous landlords for the previous 5 years.

 Applicant may not have any evictions or unpaid judgments from previous landlords.

 Applicant must exhibit a responsible financial life. Credit score must be a minimum of 600.

 A background check will be conducted on all applicants who are or will be 18 years old while living in the

home. Applicant’s background must exhibit a pattern of responsibility.

 Applicant must be a non-smoker.

 Occupancy is limited to 2 people per bedroom.

 Pets are not allowed.

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Colleen F.Pro Member
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
6y

You have too many words in your requirements. I would make it a sentence or two

 I would also specifically get rid of these:  Applicant must exhibit a responsible financial life. Credit score must be a minimum of 600. A background check will be conducted on all applicants who are or will be 18 years old while living in the home. Applicant’s background must exhibit a pattern of responsibility. 

It is enough to say minimum credit score 600, background check required on occupants > 18 yrs old.  You can scrutinize the tenant but you should not sound like the great scrutinizer.  It gives an off putting first impression.   

Also a background check on someone turning 18 is useless. You can typically only get offences that occur after 18.

Is this all you send of do you say open house on x date or try to schedule a showing?

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    6y

    You have too many words in your requirements. I would make it a sentence or two

     I would also specifically get rid of these:  Applicant must exhibit a responsible financial life. Credit score must be a minimum of 600. A background check will be conducted on all applicants who are or will be 18 years old while living in the home. Applicant’s background must exhibit a pattern of responsibility. 

    It is enough to say minimum credit score 600, background check required on occupants > 18 yrs old.  You can scrutinize the tenant but you should not sound like the great scrutinizer.  It gives an off putting first impression.   

    Also a background check on someone turning 18 is useless. You can typically only get offences that occur after 18.

    Is this all you send of do you say open house on x date or try to schedule a showing?

    12Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    I find allowing small dogs is critical.. if its allowed at your condo.

    also you may want to ease up on all this up front and just run you credit and background

    600 ficos are going to have a tough time toeing the line.  what yoru asking for is more like 680 to 800 s
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  • Joseph CacciapagliaBusiness Member
    Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
    6y

    I agree with @Colleen F. that this is coming across like you are going to be critical of all their life choices. I would shorten each to just state the facts. I think @Jay Hinrichs is right that you might need to allow small pets (i.e. under 25 lbs). You can charge a pet deposit and additional pet rent in most markets, and these two things should cover you. I also believe that 3X income doesn't work in all markets. I've seen this relaxed to 2.5X depending on location and the price of your unit. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Joseph Cacciapaglia:

    I agree with @Colleen F. that this is coming across like you are going to be critical of all their life choices. I would shorten each to just state the facts. I think @Jay Hinrichs is right that you might need to allow small pets (i.e. under 25 lbs). You can charge a pet deposit and additional pet rent in most markets, and these two things should cover you. I also believe that 3X income doesn't work in all markets. I've seen this relaxed to 2.5X depending on location and the price of your unit. 

    if rent is 4k a month then 2.5% is 10k a month gross that gives them 6k a month before tax to live on.. 

    if rent is 700 a month I think it needs to go the other way  4X  that gives them 2100 a month to live on as opposed to 3X were they are living on maybe 1k a month that's a pretty precarious situation for many one flat tire and rent gets missed :)

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  • Maria Crenshaw
    OP
    Member since 2017 · 11 posts · 3 votes
    6y

    @Colleen F.

    Great input. Thank you.

    0Reply
  • Maria Crenshaw
    OP
    Member since 2017 · 11 posts · 3 votes
    6y

    @Jay Hinrichs

    I'll think about this. Thank you.

    0Reply
  • Maria Crenshaw
    OP
    Member since 2017 · 11 posts · 3 votes
    6y

    @Joseph Cacciapaglia

    I'll think about this. Thank you.

    0Reply
  • Quincy Lockett
    South Holland, IL · Member since 2017 · 374 posts · 432 votes
    6y

    @Jay Hinrichs

    While I agree with the rent/income ratio of 4/1 for lower income units, in my area (Chicagoland) the people earning $2800 have 0 interest in the $700 unit. ZERO! They seem to ALL want the $1200 plus unit. The less expensive apartments are ‘beneath them.’ We are left with a pool of people least qualified to afford the unit ($2,100/month with car notes).

    1Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    6y

    @Maria Crenshaw

    Just say:

    Credit and background check, minimum income verification, landlord references required.

    All done.

    10Reply
  • Russ B.
    Investor · Cleveland, OH · Member since 2017 · 319 posts · 330 votes
    6y

    Maybe I'm cheap (I am lol).. but if I paid 1/3 my gross income for housing at any point in my life, that would have felt like a LOT. I'm currently paying about 1/12, and it still feels like a major bill. 

    It seems like anybody would be really tight at 3x, so it would have to be quite risky to go below that, especially with lower priced rentals. As mentioned above, a flat tire could be a major expense for someone whose rent is $700.

    As for the original question, I agree with the posts above - keeping the requirements the same but cutting down on wording would probably help. As it is, just the length of the section probably makes people who would get approved think that they won't.

    0Reply
  • Maria Crenshaw
    OP
    Member since 2017 · 11 posts · 3 votes
    6y

    @Jonathan R McLaughlin

    Love it. Thank you.

    0Reply
  • Anthony Wick
    Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
    6y

    @Maria Crenshaw

    I’m with everybody else. Some of your verbiage is making me wonder about my life choices.

    600 credit score, 3 times income to rent, background and credit Check, no felonies, no evictions.

    1Reply
  • Maria Crenshaw
    OP
    Member since 2017 · 11 posts · 3 votes
    6y

    I appreciate all the feedback. I  will adjust the wording. Funnily enough, I got most of this wording from the sample forms that came with Brandon Turner's book!  ; )   ...still grateful for the head start and this forum.

    1Reply
  • Anthony Rosa
    Rental Property Investor · New York City · Member since 2019 · 703 posts · 538 votes
    6y

    @Maria Crenshaw - What class neighborhood is the rental in?

    0Reply
  • Jill F.
    Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
    6y

    @Maria Crenshaw My very nicest spiffiest "A" properties are in a "B-/C+" neighborhood and most of my properties are in C/C- with some in "D/D-" neighborhoods so perhaps my advice will not apply... But when I write an ad, my goal is to get as many reasonably or possibly qualified people as possible to complete my free application. I will not show a unit without a complete application including a copy of a photo ID and a recent paystub. I do not charge for a background check until I am ready to offer the unit it one particular person contingent on a successful background check.  600 is not exactly a stellar credit score, so say--  Fill out our FREE application!! WE have Options for less than perfect credit!! People like to be sold rather than scrutinized  so focus on how great the apartment is-- don't get me wrong, you still have to check people out but the more qualified apps you get the more likely you are to find a great tenant.

    0Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    6y
    Originally posted by @Russ B.:

    Maybe I'm cheap (I am lol).. but if I paid 1/3 my gross income for housing at any point in my life, that would have felt like a LOT. I'm currently paying about 1/12, and it still feels like a major bill. 

    It seems like anybody would be really tight at 3x, so it would have to be quite risky to go below that, especially with lower priced rentals. As mentioned above, a flat tire could be a major expense for someone whose rent is $700.

    As for the original question, I agree with the posts above - keeping the requirements the same but cutting down on wording would probably help. As it is, just the length of the section probably makes people who would get approved think that they won't.

     1/3 is pretty much the norm for many people and what people recommend when preparing budgets.  I have a good salary and couldn't imagine finding many places for 1/12 of my salary.  Most places where I am start at $1K for an apartment. 

    0Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    6y

    @Maria Crenshaw  I think others have given good suggestions-keep it short and simple.  Jonathan has a good outline, but if there is no smoking or pets, I would add that.

    0Reply
  • Michael Peters
    Member since 2019 · 215 posts · 122 votes
    6y

    Everyone seems to have hit the nail here.  Less is more.  Instead of stating background checks on everyone 18+ I would state all prospective residents 18+ must complete an application.  For pets just say that they are considered on a case by case basis or with owner approval.  Responsible people take care of their pets and are often better then irresponsible tenants without them.

    0Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    6y

    @Maria Crenshaw If there are other rental options on the market people will not take the time to read a message this long. Be as short and sweet as possible with your initial contact.

    0Reply
  • Rebecca Cohen
    Member since 2019 · 16 posts · 4 votes
    6y

    @Maria Crenshaw, that looks very intimidating. I would just say, “good credit, background and references a must.” Then you do your thing and you have a list of standards that allows you to say no at your leisure. Keeping the language broad gives you more freedom. And it’s less intimidating for your prospective tenant.

    0Reply
  • Jae Hee Hwang
    Investor · New York, NY · Member since 2017 · 14 posts · 3 votes
    6y

    @Maria Crenshaw The amount of words and wording suggests that you are a nosy landlord. For instance, you can tell them they cannot smoke in the apartment but you cannot tell them that they must be non-smokers. I would also allow one pet but charge annual pet fee.

    1Reply
  • John Ball
    Rental Property Investor · Chicago, IL · Member since 2020 · 10 posts · 1 vote
    6y

    @Maria Crenshaw too many words and you’re coming off as a landlord that would be difficult to work with.

    Your credit score requirement leaves the door open to potential tenants that you may not want based on some other the other requirements.

    If you haven’t yet, do the research on what is usually the acceptable percentage of rent to income in your area.

    Everything will come to the light in the background check, so let that be the deciding factor, you’re potentially pushing away great tenants

    0Reply
  • Wes Byrge
    Contractor · Knoxville, TN · Member since 2020 · 3 posts · 0 votes
    6y

    @Maria Crenshaw background checks don’t really tell you much about who people are they only tell you who they were at one point in life, I speak from experience because I was once a lost cause dropped out of school, hardcore drug user the whole nine yards, I will have 4 years clean this year and own 2 business I am forced to rent because of my background, I’m forced to work for myself because of my background just consider the fact that things aren’t like they were 30 years ago when you could do things on a handshake Ive lived at the same place for 3 years now I pay 1100 a month in rent never been late one time or not been able to pay my bills.

    2. Charge a 350.00 deposit for animals and make them sign an agreement that if the presence of the animal on the lease destroys the house that they agree to pay for all damages urine, feces, structure damage just what ever you wanna put in there, also give your self the right to immediately evict if they miss rent, drink and use drugs , are destructive etc.

    Last but not least it makes more sense to put guidelines, rules, and consequences in place than it does to exclude people because the truth is if they had their life together they wouldn’t need to rent they would own a home of their own 

    0Reply
  • Joseph Walsh
    Brookfield, WI · Member since 2016 · 191 posts · 108 votes
    6y

    I think this phrase is costing you a lot of potentials:

    "Applicants must receive positive references from all previous landlords for the previous 5 years."

    Me:..."Eff that, I am not going to track down 5 years of landlords and get references....", especially if I am 1-2 years out of college, where I moved every year!


    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    6y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Joseph Cacciapaglia:

    I agree with @Colleen F. that this is coming across like you are going to be critical of all their life choices. I would shorten each to just state the facts. I think @Jay Hinrichs is right that you might need to allow small pets (i.e. under 25 lbs). You can charge a pet deposit and additional pet rent in most markets, and these two things should cover you. I also believe that 3X income doesn't work in all markets. I've seen this relaxed to 2.5X depending on location and the price of your unit. 

    if rent is 4k a month then 2.5% is 10k a month gross that gives them 6k a month before tax to live on.. 

    if rent is 700 a month I think it needs to go the other way  4X  that gives them 2100 a month to live on as opposed to 3X were they are living on maybe 1k a month that's a pretty precarious situation for many one flat tire and rent gets missed :)

     I am not saying you are wrong in the intent to make sure there is enough living money, but in practice I have found that my cheaper units (class C) have the tenants paying a higher percentage of their income to rent and they simply live on not much money.

    My B class properties can get tenants easily at 3X the monthly rent (start at ~$2.5K (3 BR) and go up to ~$4K (3 BR)).  However, my C class properties struggle to get applicants that can meet the 3x rule (start at ~$1.7K (2 BR) to $2.4k (4 BR)).  I have used 2.5X rent to income on these C class properties to obtain applicant interest and have not gotten burned by it yet (I suspect I will eventually because these tenants simply do not have much margin to deal with the unexpected).

    The people who rent the lower cost units are used to living on lower expenses.  I suspect they do not have much margin, but my tenants are very reliable with their rent.  It has been quite a few years (probably more than 5 years) since we have had a missed payment.

    0Reply
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