How To Find An "A" Class Tenant For Your "C" Class Property
Whether you're an investor or property manager, we're all searching for that quality, "A" Class tenant. You know the type; the one with a 675+ credit score, solid payment history and dependable income. More importantly, we want that tenant who will stay and pay down the mortgage and not trash the place. However, if you or your clients have invested in a C class neighborhood - for example, in older homes or an apartment building located near mini-marts and pawnshops- then attracting and keeping this type of tenant may seem elusive, but it's not impossible. Consider the suggestions below the next time you have a "C" Class vacancy to fill.
Advertise Your Criteria
Let "A" Class applicants know you care about who occupies your property by including specific rental criteria in the ad. For example, include a minimum credit score and income to rent ratio. State in the ad copy that criminal background checks and rental history will be checked. Be sure to include the cost of the application screening fee. Doing so will attract only serious applicants. Although some people may not meet all requirements and apply anyway, most deadbeats will move on to landlords with standards less than yours.
Clean It Up
Would you move into a place with urine stained toilet seats and food on the walls? Remember, clean sells. An "A" Class tenant will be attracted to a unit that sparkles and repulsed by one that doesn't. Invest the money to do a "detailed" cleaning job. Do not show the property if the carpets are dirty and there are cobwebs in the windows. Even if you tell prospective tenants it will be cleaned prior to their move in date, they may not believe you and pass yours up. If you currently have a tenant in the unit and need to show it, offer a cash incentive for that month with specific instructions on how to keep the unit clean for scheduled showings.
Complete Necessary Repairs
True, some tenants can be hard on rentals - that's why there is a security deposit. However, that's no excuse for neglecting repairs that are in violation of city or county housing codes. Further, investors who refuse to replace a bad flush valve or patch a leaky roof because they have neglected to fund for these types of repairs give responsible landlords and property managers a bad name. "A" Class tenants, who are subject to this type of treatment do not re-new leases. Moreover, "A" Class tenants are usually reasonable and will honor tenant charges that are their responsibility. Conversely, tenants with a criminal history are attracted to properties in disrepair and won't report these violations to housing authorities; Broken windows, rickety stair rails and damaged wall siding indicate nobody's watching and nobody cares.
Read Their Credit Reports
"A" Class tenants who occupy "C" Class properties may do so because they have experienced some financial challenges, resulting in dings to their credit report and a lower credit score. Reading an applicant's credit report helps distinguish if they are in that category. For example, past due medical bills, late payments on student loans or a recent foreclosure or short sale can decimate a person's credit score and shut them out of "A" or "B" Class areas. However, if they have kept current on car payments, credit cards, utilities, have a low debt to income ratio, and solid employment history, they may be a good risk.
Please share your suggestions for finding and keeping quality tenants in your lower-income properties. All comments are welcome!