Three Tips for Tenant Screening

I wish I could jump into a time machine and remember what it was like to learn to ride a bike for the first time. It must have been scary yet exciting. As an adult I often wonder if something is to be truly exciting, must it be a little bit scary?

As a kid, riding a bike for the first time was a big achievement. As an adult, buying our first investment property was one of the most exciting days of my life. With that being said, days two, three and four… were very scary when you start to realize there are still things you’ve yet to learn.

                                      Three Tips for Tenant Screening

If you are thinking about buying a Real Estate investment for the first time, you may have to consider the possibility of being a landlord. You could always hire it out but that is not my style and likely not yours either if you’re taking the time to read this.

If you are going to do this yourself, I want you to not only do it to the best of your ability but to avoid the foolish mistakes I have made over the years and tips I have gathered from other investors.

Tip #1 - Set Clear Expectations

If you are a landlord and you put up “space for rent call - 617…” with no photos, call me if you want to sell your building because this game is not for you. Go above and beyond at every moment!

Take great photos, inside and out. If you can afford to have it done, get a professional to do this, especially if you have recently done renovations. More importantly for today's conversation, be incredibly detailed in your listing.

Let people know what they need to pay to get keys, what they will pay monthly and what minimum expectations you have for your applicants to even get through the screening process.

For us, we require a minimum of a 600 credit score and 3x the rent through a reliable form of income. For other people, you included, these numbers may need to look a lot different for you to feel comfortable. Whatever the number is, make sure you are up front about it in the listing, on phone calls and in interactions about the property.

Tip #2 - Trust But Verify

Now that we have properly set expectations in our listings and in our conversation, I can assure you that you have already weeded out 50% of the bad apples.

Ronald Reagan was known among many things for his quotes. “Trust but Verify” likely making it high up on his list for iconic sayings but I prefer spanning back farther in time to Churchill where he puts it so elegantly -

“Tenants Should Never Be Trusted, Without Verification”

So maybe I traded out “Memories of War” for “Tenants” but for some reason, this version has become one of my core beliefs as a Landlord and I continue to think about this quote every time we go to fill a unit. Yes we are looking for good tenants but more importantly, we are weeding out bad ones.

Thankfully, to do so doesn't have to be expensive or time consuming!

There are dozens of Landlord friendly sites that let you create a Free Profile, post listings, find interested parties and have them apply right then and there.

I personally use ZillowRentalManager which gives me a Snapshot of the Person and their Info, Background Check, Credit Report and allows them to upload income verification all in one secure place.

This cost the tenants $35 dollars out of pocket to accomplish which is the second barrier to entry eliminating another 40% of the bad apples. Now we need to find a way to eliminate the last 10% of unfit tenants.

Tips #3 - Listen More Than You Talk

Take every opportunity to meet a potential applicant in person if the opportunity presents itself. Make small talk! See why they are moving, ask follow up questions, show interest… shit, just be a human.

If you need help with the in person interaction side of things, I would encourage you to read -

              Never Split the Difference: Negotiating As If Your Life Depends on It

                                            by Chris Voss & Tahl Raz

When you start to do a number of showings you will have gut feelings and reactions to people and situations, trust yourself. If someone is frustrating you with questions that seem silly or struggling to get the application in correctly, are they the best fit? That is up to you.

For me, if someone isn't willing to do the application correctly or to its fullest, it's an absolute pass. If someone emails me every night with questions that to me seem like nickel and dime kind of questions, it is a hard pass. These are my rules, you write your own!

Bonus Tip: At the conclusion of every in person showing, walk the respective tenant to their car while continuing to chat. I do this for two reasons, it gives me a bit longer to build rapport but the real reason, to see what the condition of their car looks like.

Do they have Burger King bags shoved into every nook and crevice or is it spotless, top to bottom? I have found this to be a scary good indicator of how well someone will treat your space.

Now get out there and fill your space with amazing people! Don’t forget what our boy Churchill said though - “Tenants Should Never Be Trusted, Without Verification”...