During my tenure of showing rental units to prospects, I've noticed a behavioral phenomenon during showings and I am trying to figure out what it means.
Occasionally, I'll have a prospective tenant walk in to the unit, poke their head into each room, and then declare that they want to proceed with the application process - all in the manner of 15 seconds (no hyperbole). They don't ask me any questions - they want to apply and be considered for the apartment.
To me, this reeks of desperation, but oftentimes these applicants are qualified. Some of them don't need to move right away, either. (It's these folks I am referring to, not the underemployed dude with a sad story.) I worry about these prospects, and traditionally have passed on them because it seems they aren't putting much thought into the place where they intend to lay their head (no emotional "skin in the game") and might be cavalier how they treat the place. Or, should I take this as a compliment as to the quality of my product versus the competition?
Right now, in NY, there is a dearth of good applicants due to the time of year as well as the compounding effect of everyone "sheltering in place" because of COVID. So, I'm reconsidering my stance on these "shoot from the hip" applicants.
Is my sixth sense right? How would you interpret this behavior?
I just rented to a beautiful, professional, 56-year-old that looks like she should be living in a million-dollar home. I may have physically winced when she asked to look at a house that is old, dated, and probably C-class because it's clearly below her station. She walked through it quickly, said it was perfect, applied, and moved in the next day.
It's a common mistake to think you know what someone needs or wants. These people are probably looking for an inexpensive place to crash and your rental fits the bill. I am a B-class kind of person and wouldn't rent this particular house, but an A-class person loved it and will likely turn it into a cute home. Who am I to judge?
I also wouldn't see this as a bad thing, especially if you have a good listing with lots of pictures. They really just need to poke their head around to get a better understanding of spacing and size but they should know already basically what it looks like and how it finished. For a lot of people where they live is more of a factor of cost vs. do they love the place, they don't own it and won't be here forever. That said there are also the people who you are worried about trying to weasel their way in before the open house and will lay down cash today due to being a horrible candidate, that's an obvious no but if they meet your criteria except a detailed walkthrough I would reconsider them. I also look at it as an opposite where if someone is wanting to spend too much time on the walkthrough looking for any issues I see them as someone who is too picky and likely to want modifications which I won't do so we all have our biases I guess.
I wouldn't think they are desperate. Some people are happy in a range of homes and aren't that picky. They want something clean and affordable. The ones who are nitpicky are the ones to watch out for. We had one couple go through a place and ask questions as if they were going to buy the place (eg type of roof, age of roof).
I have noticed this too. Selection criteria has changed for them, they want space and privacy, and it is competitive. They know other potential tenants are right behind them and they came to this realization before we did. If you have properties outside of the inner cities and away from crowds they are golden.
@Wesley W. It would depend on the market. My wife and I rent here in Los Angeles, and even though we have income and excellent credit it took us awhile to get an apartment. That quick draw tenant might just want to get a jump on the competition. Some people are also just extremely decisive. They know what they want.
I’ve seen (and had) this go both ways. As others have said, some people just know what they want. If your marketing materials showcase the property well, they walk in and it lives up to what they saw online, that’s enough for some folks to make their decision. If they meet your qualifications, that’s a win-win. I’ve had tenants who’ve moved from out of state and are staying in Airbnb’s until they find a longterm rental, and they want to start their leases right away. That’s great!
On the flip side, please learn from one of my greatest mistakes. As a new landlord, I did a showing where my ‘spidey senses’ were telling me something wasn’t quite right with a prospect who wanted to sign right away, but I couldn’t put my finger on anything tangible and proceeded because I wanted to keep zero vacancy in the house. She passed all of the credit and background benchmarks, but something just felt ‘off’. One week later I learned that her boyfriend had kicked her out due to an out of control substance abuse issue, and had sobered her up for a day to get her out of his house. This rental was a rent by the room, and she was incoherently walking around the house naked, eating the other tenants’ food. Nightmare? Massive understatement. It was the biggest mistake I’ve made as a landlord and caused me a toxic amount of stress and time to rectify.
Lesson? TRUST YOUR INSTINCTS. Every situation is different. If they don’t ask questions, it doesn’t mean that you can’t. Sometimes it’s fine, sometimes it’s not fine. A casual conversation is usually enough to tell the difference.
In my experience, the tenants who have been more quick and decisive have actually turned out to be the easier tenants. Especially if your property really is a superior overall offering than the competition on the market.
I would probably focus less on how decisive they are and more on their qualifications, financial capability, motivation for choosing your property, etc. It’s very possible you’re just offering a great property for rent.
I’ve done the same thing when purchasing most of my properties. “Yup it’s a room” let’s get our offer in before others see it. 1/2 of them I’ve never been in. Having me inspect a house is like having me inspect your car. “Yup, there’s a motor in it and wheels on it...”
Maybe you did a good job with photos and advertising.
I told the listing agent I wanted to make a full priced offer on my current residence after walking through the front door, through the living and dining rooms, and out onto the back deck. I'd been there for about 30 seconds.
I didn't need to see the kitchen, family room, bathrooms, bedrooms, etc. because it already checked off the boxes that were important to me. Only they know what their boxes are.
As it goes, it's the second best decision I've ever made (you never know when your wife might read your real estate posts...).
Evaluate the application in front of you once it is completed and base your acceptance/denial on that info. Maybe they have looked at a lot of places and know what they want or don’t want right away?
It is all based on the perspective of the tenant and what fits their needs. To be honest, they know that more than you do.
This is a good question. It also happened at my last Zoom showing. These people were ready to say yes before I walked them through the place -- they were sold by the photos and the location. All they really wanted to do was confirm I wasn't a wild-eyed crazy.
One thing that I've learned in psychology books that's absolutely true is that there are "maximizers" and "satisfiers" in life. Your maximizer will reliably look for the best value and to get the most out of whatever they're getting in any deal. They're willing to deal with making multiple offers to buy something, bargaining, walking away and coming back later, all kinds of negotiating techniques. Your satisfier pays list price and accepts things as long as their basic criteria are met.
I think as long as you're sure they can come up with the rent reliably, choosing to rent to a maximizer versus a satisfier isn't a distinction that will make you more profit. The one thing I do like about maximizers is that they really do know a good deal when they see it. So if you're offering a good deal, and I always try to, you're simply going to have more appreciation from your maximizer, and that can be valuable down the line. I don't think you're in the same market segment as I am, Wes, so I'm not sure this is all that important for you.
To me, I am totally fine with someone who knows what they want and I am less worried about this kind of behavior because maybe this tenant has just been to a bunch of places without finding exactly what they want and saw your place, which was the right fit for them.
My wife and I wanted to buy a home here in TX but we had to fly in from MD, and our agent probably thought the same thing you were thinking, as my wife and I had to look at about 20 homes over a weekend, so we didn't have time to be faffing around.
When we saw our home I went for about 1 min and my wife walked in for about the same while I waited in the car with our sleeping baby, the agent came out, and we told that's the house we want, put an offer in right away. I am typing this from that home right now a year later.
For us, we didn't have time to be asking 1,000 questions as we knew exactly want we wanted as our criteria were in the forefront of our heads and maybe because we are real estate investors too.
I have shown our units to tenants who asked a ton of questions and seemed very eager and I have NOT heard back from some of them till this day while others who didn't seem too interested ended sending in an application the same day.
Everyone is different, so I try to keep my mind in check.
I have given up trying to understand the psychology of folks . All financial decisions are emotional and it’s not my duty in life to figure out what someone’s emotions are or why they make the choices they make , if they pass the simple tests I sign them up and move on . Trying to micro analyze people is a tough business and doesn’t work well . It will be evident if the person is a piece of crap and the bigger concern should be looking for true red flags like them asking if your willing to change this out or nitpick about stuff before you even sign anything . Those folks rarely will pass my screening because I have enough problems in life
You are overcomplicating this process, screening should be a simple, repeatable process that requires no analysis whatsoever. You should have it published exactly what your criteria for a tenant are- credit score, income, criminal history, etc, so anyone who inquires should already have a good idea if they qualify or not. The first person who qualifies and pays you (deposit, first, last, whatever you require) and signs the lease, they get the place.
Once you start thinking about people's motivation, if they are the "right" fit, etc- not only are you overcomplicating the process, but you are opening yourself up to a fair housing lawsuit. How do you prove that you selected a tenant objectively when you haven't published your criteria and are trying to determine their motivation? You can't. You might find yourself in court trying to convince a judge of that.
Following that process will make the decision easy and you'll get a great tenant 98% of the time.
So by definition, I have been a "quick draw" investor for 30+ years. I rarely spend more than 15-20 minutes during a walk through and I never do an inspection nor see the property before I have an accepted offer. However, I only by at a price that I cannot lose
Many tenants today operate in the same way. Most of my rentals are in small Texas communities. I have rented 2 properties in the last few months to people that have never been to the town nor the state of Texas. Just people working remotely that wanted to escape areas where rent was insanely high. Times are changing and with pictures on a website(usually Facebook for me) people feel comfortable making a decision
Some people research cars for a year before they buy, scouring the internet and consumer reports, and all the car magazines, analyzing safety, gas mileage, repair costs, and hunting for the best deal. Others buy while leaving the car running with the family out in the parking lot. Everyone is different. I've had plenty of buyers and sellers buy and sell and rent long distance without ever seeing the property in person. Others look for years for the "perfect" place to spend a lifetime. Everyone is different....and it is also tough to judge finances I find. I've seen well paid doctors never pay one bill on time and banquet waiters have $50,000 cash tips ready to use as a down payment.