New to Real Estate · Humboldt, SK · Member since 2021 · 8 posts · 6 votes
Hi Everyone!
We took possession of our first rental on July 15th and we are self-managing it. We've prepared a pre-screening questionnaire with guidance from Heather & Brandon Turner's Managing Rental Properties book. We have had a lot of interest as the house is located in a small city. However, the people who we have sent the questionnaire to didn't return it, said they don't qualify, said they are uncomfortable with providing us with their personal information, and have gone as far as saying the form is 'absurd' etc... Are we doing this wrong? Are our policies/minimum requirements too stringent? If so, should we change them? Or should we sit tight and wait for the right tenant to come along? We followed the Turner's advice.
Living in a small community is nerve racking and seems to be increasingly difficult as the tenant pool isn't as vast as a larger city. I'm afraid we won't find the 'perfect' tenant.
Rental Property Investor · Riverside · Member since 2021 · 21 posts · 7 votes
5y
How long have you waited? We just set up our rental and after 3 weeks of no good tenants we jumped on the first decent one. Now at 4.5weeks the requests from very prospective tenants are coming in fast. We panicked signed the first lease to pay mortgages but if we had waited we could have made more $$ with the way our furnished rental is set up.
Patience is a good thing if you can afford it I think
Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
5y
You need to manage to your clientele, and we have no idea where your from based on your profile.
I had rentals in Central FL in two separate 'blue collar' areas. I now have rentals in Socal...I'll call it working class professionals. Everything from nurses and engineers, to parking lot attendants and bar tenders who are often their spouses, more of a middle class family area. My screening at each was wildly different. In Central FL 2010ish foreclosure and SS tenants were the norm, they were just people who got over extended and lost their homes. Out here my new tenants have phenomenal credit, but can't afford a home. There I got waiters and 7-11 workers, here they are marketing and software management types.
I've noticed, and hopefully you will too... you need to evaluate the advice given in part based on where the poster is coming from and what kind of business they run. Mom and Pop landlords can run their units more personally and still make it work, where bigger management types can't. Neither is 'better' just different.
New to Real Estate · Humboldt, SK · Member since 2021 · 8 posts · 6 votes
5y
Spencer - we have had our ads up for about three weeks now... We can afford for the rental to sit vacate for a few months. we're just not sure if we're doing something completely out of this world. People in our area are not use to this high of standards and think it is crazy what we're asking of them.
Matt - The rental is located in Saskatchewan, Canada. Lower/middle class applicants, single parents, older couples.. It's helpful to hear that there isn't a cookie-cutter way of finding tenants.. Some of the people who have contacted us find it shocking that we ask for their credit score.. or ask if they have a valid social insurance number (SSN)..
I'm scared that good tenants are right in front of us, but our screening process is too intimidating for them because they are small-town oriented.
New to Real Estate · Humboldt, SK · Member since 2021 · 8 posts · 6 votes
5y
Ron - Good point! Here are our 'qualification standards':
1. Applicants must have valid government photo ID and a valid Social Insurance Number. 2. Background checks will be conducted on all applicants over the age of 18 years old. 3. Income must exceed three-times the monthly rent. (Rent is $1,150.00) 4. All income must be from a variable source, univariable income will not be considered. 5. All applicants must have positive references from all previous landlords from the past five years. 6. Applicants cannot have any previous evictions. 7. Applicants must not have unpaid judgments from previous landlords. 8. Applicants must exhibit a responsible financial life. Their credit score must be a minimum of 650. If no credit score is available, a secondary credit reference must be provided as a co-signer on the potential lease. 9. Applicants must past the background check. 10. Applicants and all people who intend on living in the property must be non-smoking. 11. Maximum 2 pre-approved pets living at the property at any given time. 12. Maximum 2 people per bedroom living in the property at any given time.
Real Estate Broker · Saskatoon · Member since 2020 · 25 posts · 10 votes
5y
Hi Katie. I'm also from Saskatchewan. Chatting first-hand with clients who are renting in very small centres (less than 600 people) it always pays to wait for the right person. It's never worth getting the wrong tenant in your property and it cause you lots of headaches.
I might suggest supplying the questionairre form in a more user friendly format and you might even consider offering some sort of incentive for the filling it out. Best of luck!
New to Real Estate · Humboldt, SK · Member since 2021 · 8 posts · 6 votes
5y
Ronald - A fellow Saskatchewan resident! Our rental is located within an hour or so of Saskatoon. Thank you for your input! Would you mind elaborating what you mean by 'supplying the questionnaire form in a more user friendly format'?
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
5y
Your prescreening is probably excessive. We would love to ask 50 questions, but if you don't make it easy, you could turn off qualified tenants.
We have general criteria in our listing:
Each adult must submit application and pay $30 application fee for credit and background check. Qualification requirements include having a responsible financial history, previous landlord references (or home ownership) and combined household income of at least 3X rent.
Then prior to setting up a showing we ask:
1. When are you looking to move in (property is available on X day)?
2. Do you have any animals (list all type, weight and breed)?
3. What is your approximate combined monthly household income? We require over 3X rent.
4. Optional question depending on what they have already provided. We ask for full first and last name, plus phone number.
This is pretty simple and if someone won't answer these questions, they are not going to see the property. When tenants self screen themselves due to published criteria, that saves you time and effort, so it is good. When people say they get a hundred inquiries, it either means the price is way too low or they didn't put pre-screening statements in their listing. Less inquiries is better as strange as it sounds. You are not looking for the most applicants, you are looking for the best applicants.
I also agree with @Spencer Howe that you need to give it time. Selecting the wrong tenant costs more than vacancy in the long run. Even after all these years, we get worried when a good applicant isn't coming along. After rejecting several applicants, it gets a little tiring. When it starts to feel hopeless, someone good comes along.
Feel free to share your requirements with us and where you are located. I am happy to give you feedback.
Another suggestion is look at local property management websites and see what they have listed for requirements. If your requirements are more stringent than typical for your market, that could be an issue.
Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
5y
It is great that you posted your criteria but no one can really answer your main question because we have no idea how many or what types of questions you are asking.
As for your qualifications they are fairly standard. Maybe some regional differences in the wording, #8 in particular. I would not talk about leading a responsible financial life as that is not a standard that can really be judged. I also don't get that everyone must have a co-singer but I am not familiar with the book. Personally, I would state the min. credit scored allowed for this one and leave it at that.
One you leave out is anything regarding the security deposit. May want to list what that is.
If you want feedback on your prescreening questionnaire you need to post it.
As for our experience anywhere from 20-30% will fill it out. On a great house in a great location about 50% and on the opposite side about 10%.
Rental Property Investor · Riverside · Member since 2021 · 21 posts · 7 votes
5y
You may need to market it better, the conditions are perfectly fine. Perhaps try to interview and really sell them on your property before you hit them with all the conditions. I am fortunate that my wife is a killer sales person!
Investor · Clearfield, PA · Member since 2016 · 31 posts · 13 votes
5y
@Katie Willcox how are you presenting your requirements to the tenants? It could very well be the presentation that is scaring them off and making the barrier of entry feel to high. Other landlords are probably using similar qualifications but presenting it or wording the criteria in more accessible ways.
A lengthy list can feel overwhelming, especially if it's a mix of your requirements for the building and details for what's required for the application. It might help to list the apartment criteria separate from the application process. While also outline the application process as a few simple steps.
Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
5y
@Katie Willcox
As many have said it’s better to have no tenant than a bad one. So be patient.
The information presented is fine if the intent is to have tenants screen themselves and to save you time. We put up a similar “guide” when we list our properties. The piece that I would tweak is about the credit score. I wouldn’t necessarily list the score but rather a more vague statement about good credit. In the states many people have bad credit due to medical or student debt but are very qualified renters. We tend to take some discretion when it comes to credit. I normally would tell the tenant that the score is not as important as the payment history and type of debt they have.
Rental Property Investor · Streetman, TX · Member since 2018 · 527 posts · 495 votes
5y
@Katie Willcox
Not to duplicate the excellent comments by others. Where are you advertising? I get some of my best tenant leads off FB Market Place. I use the local "For Sale" page You can post an add with photos for free.
Be ready to be overloaded with inquiries. I typically get 15-20 PM's a day when first listed. I request their email address and follow up with a rental application. Only 2-3 provide emails. In the body of the email I include our rental criteria. Most people self screen, 3X rent to income is a biggie. Out the people I send applications to I usually get 1-2 qualified applicants after a week's posting. I like to only do showings to prequalified applicants.
The trick is to get a high volume of applicants to choose from.
I've also tried Craigslist and Zillow with very limited success.
Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
5y
@Katie Willcox you can research, learn, study, estimate, etc. until you're blue in the face, but the market will always give you the correct answer. What's written in Heather and Brandon's book isn't gospel for every market. It's a guide... You even mentioned people in your market aren't used to things like this.
Now you have an option: do you adjust your standards or wait for the right person(s) to come along?
I would make sure you're getting feedback directly from the prospective tenants and understand what their reservations are. I would also try to speak with them in person or over the phone. Some people may find the entire questionnaire too intimidating and don't want their rental experience to be the same. But, if you're able to speak with them you can mention the whole point of the questionnaire is to have the right people in place and you want to build a long-term relationship with them. That's a little more inviting than a long questionnaire.
Rental Property Investor · Edmonton, Alberta · Member since 2015 · 307 posts · 200 votes
5y
Hi @Katie Willcox I'm in Edmonton, and I agree that those qualifications are reasonable. We once accepted someone with a credit score below our standards (at beginning of covid because we were worried about vacancies), and it would have definitely been better to just look for someone for another month or 2).
Real Estate Broker · Saskatoon · Member since 2020 · 25 posts · 10 votes
5y
@Katie Willcox I've noticed in my business if the application is easy, intuitive and user friendly people are much more likely to take the time to fill it out. There are lots of online resources for survey creation.
Real Estate Broker · DeLand, FL · Member since 2019 · 2 posts · 3 votes
5y
I'd maybe think about doing a simple 1st screening and then do a more extensive application after that. There are likely people that have a 600 credit score with steady verifiable income and a good rental history and you wouldn't want to scare them away.
Investor · Hampton, VA · Member since 2017 · 49 posts · 86 votes
5y
This is a question that no one can really answer who's not very familiar with your market you've got some good general advice.
#1 Have patience. It's more important to get a good tenant in than just any tenent. I've made this mistake before. It's not pretty
But the thing that stuck out to me is that if a potential tenants thinks its more than normal than it probably is more than normal. For example, in the neighborhood where I rent my houses no one has a credit score above 620. If they did they could just buy a house. So I pull the credit but don't really use the score. I'm more concerned about evictions. I don't care if they didn't pay a cell phone bill or something like that. Now, this is a B/C area so that's expected. If I had a rental 20 minutes away in an A/B area than I would definitely be using credit as a criteria.
My point is look at what other landlords are doing to get a feel for what's the norm in your market.
Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
5y
I love your questionnaire. It looks like it is doing its job and disqualifying people.
"Uncomfortable" providing financial information. Then you should be uncomfortable renting it to them.
"Absurd." Great, you just found someone who will not be your tenant.
Now, for initial showings - I would only screen lightly. If they are interested, then you proceed with asking more personal financial information.
Also, some have used application fees. I find that those turn away good tenants sometimes. My high preference is for the landlord to pay for screening.
Rental Property Investor · Akron, OH · Member since 2021 · 31 posts · 19 votes
5y
Hi Katie!
I am also self-managing/house hacking a duplex currently. For my property I ran a full background/credit check/income verification on the potential tenant(s). I stated up front that the cost of this would be (x) amount of dollars. This helped weed out anyone who was serious vs. those who would potentially waste your time. If they were willing to pay the money upfront to run the background check then we took them as a strong potential tenant.
I just made sure to let anyone know that if we did not choose them that the background check fee was non-refundable and if you were chosen, you would get reimbursed on 1st month's rent. This has worked out great for us and our tenants have been phenomenal so far.
Those who are unwilling to provide simple basic information are those I would stay away from. It is always a great idea to have as much information about your tenants as possible. I personally would rather wait and find the right tenant(s) than rush to get someone in the property who is a consistent problem.
I am also self-managing/house hacking a duplex currently. For my property I ran a full background/credit check/income verification on the potential tenant(s). I stated up front that the cost of this would be (x) amount of dollars. This helped weed out anyone who was serious vs. those who would potentially waste your time. If they were willing to pay the money upfront to run the background check then we took them as a strong potential tenant.
I just made sure to let anyone know that if we did not choose them that the background check fee was non-refundable and if you were chosen, you would get reimbursed on 1st month's rent. This has worked out great for us and our tenants have been phenomenal so far.
Those who are unwilling to provide simple basic information are those I would stay away from. It is always a great idea to have as much information about your tenants as possible. I personally would rather wait and find the right tenant(s) than rush to get someone in the property who is a consistent problem.
Best of luck! Hope I could help.
Pro tip, I would not offer to refund screening fees if someone is selected. This puts you in a bad situation when multiple qualified people apply. If someone wants to rent from you, they will just accept application fees as a cost of moving. That is how it works everywhere else. Of course they will take their money back and thank you. I am just saying it is not necessary or expected.