Finding Tenants 101 (Residential)

3 Replies

Hi Ya'll,

I have done some scouring of the forums and blogs on information relating to finding tenants and now want to know current information the general BP communities opinion on this matter. 

Should I always have tenants lined up before buying or closing?

What is the most efficient/effective way to advertise vacancies?

How much should I factor advertising(not vacancy allowance) into my expenses?

Please feel free to add information not related to these questions.

Cody,

Depending on how many units you have, you could have a waiting list of folks for your units. 

In general, the sooner you have a tenant in, the better. In my last deal, the sellers allowed showings to prospective tenants while I had the property under contract. We closed, and I had a tenant in within a few days after closing. I didn't have a waiting list. I utilized my real estate agent to do all the advertising, showing and paperwork, since they have a list of potential renters.  In addition, my agent screens potential tenants based on my written renting criteria, a huge bonus! I paid 1/2 of the first months rent, and really got my moneys worth. I don't want to be in that part of the business, so I outsource it. I'm ok being in the maintenance management end, so I handle that part of things.  

If I was doing it myself, I would factor in between 1/2 and 1 months rent, the same as I would pay someone to do the job.

If you want to be in the house renting and property management business, that is different (or in addition to) being in the property investment business. Most folks that self manage do so for one of two reasons. The first is that most property management companies suck (think Pareto Rule) , and no one will look after your property (investment) quite like you would. The second is "saving" money on expenses, if I don't pay a property manager, I "make" more money. As previously stated, that puts me in the property management business, in addition to the property investment business. 

Hope that helps!

Good luck,

Jim

@James C.

I like that process. What is the renting criteria and do you double check the agent to make sure they did the due diligence to confirm the potential tenant actually met the criteria and didn't just lie?

Cody,

I get all the paperwork to verify that they are tenants that I want. The agent is a pre screen so I don't have to wade through those that don't work.

I have several standard criteria,  things like gross income 3x rent, no open collections, no violent crimes etc.

Good luck! 

Jim 

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