We do something in our property management company that I know some landlords and PMs disagree with:
We require an application before we schedule a showing.
I've gotten some pushback on that recently, and I understand the argument. We're intentionally adding friction at the top of the funnel, and we're going to lose some perfectly good prospects who don't want to apply before seeing an apartment.
For us, that's a tradeoff we've made intentionally.
We manage a few hundred units in Rochester, NY. A significant percentage of the inquiries we receive ultimately don't meet our rental qualifications. If we scheduled a showing for every person who clicked on a listing, we'd spend a tremendous amount of staff time coordinating showings, dealing with no-shows, and showing apartments to people we couldn't ultimately rent to.
But I think the part people miss is what happens after someone qualifies.
We don't really look at the application as an application for one apartment.
We look at it more like prequalifying a homebuyer.
Once we've established that someone qualifies to rent from us, they're qualified for our available inventory. At that point, our job changes from screening them to helping place them.
Maybe the apartment they originally contacted us about was just rented. Maybe another unit fits their needs better. Maybe we know something is coming available that hasn't been advertised yet.
That's when we want to give them a much more white-glove experience and help them find the right home within our portfolio.
We're also in New York, where the application/screening process is heavily regulated. We don't treat screening fees as a profit center. The cost is essentially a pass-through subject to NY's limitations.
So our leasing funnel looks more like:
Inquiry → Application/Qualification → Showing → Placement
rather than:
Inquiry → Showing → Application → Approval
Is there leakage at the top? Absolutely.
But I'd rather have our leasing team spend its time working hard for qualified applicants than spend that same time conducting a large number of showings for people who may never qualify.
The metric I'm interested in isn't "How many showings did we do?"
It's "How efficiently did we turn qualified applicants into housed tenants while providing them a good experience?"
I'm curious how other landlords and property managers handle this, especially anyone managing enough units that staff time becomes a meaningful operating expense.
If you've actually tried both approaches, what did the numbers tell you?
6 votes total
So, as a RE Broker, do you have ownership interest in all of these, or are their multiple Client owners for all or most of the properties?
Hundreds of units is not unusual for PMC. I've worked for 3 companies with approx 550, 850, and 3,000 respectively. Only the 3,000 unit PMC owned everything, the rest were all Client owned. At that time I was a senior Leasing Agent, and it was not uncommon to show, process, and move in 5 or 6 families per day. When we initially started the project, about half the units were vacant, which was a sad look into how our Mil folks had been living. The leasing group walked every one of those units, assessed generally the conditions of each unit, prioritized the "easy" ones for Rental Preps. Yes, they were all "new" in appearance by the time we were able to show them, but were still 50 years old singles, duplexes, and some walkup multi fams. While many of our placements were indeed Mil, many were also average Civilian working folks (not Mil contractors).
As for the other 2 companies I worked for, both had extensive S8 rent rolls, and single fam old houses, small multi-fam buildings, and a couple of larger, multi-building complexes. We only performed the most basic Pre-screen for any of these: How many people total; Gross total household income; When do you want to move in; Do you have $x,000 available today for SD; Do you have any, and what type, of pets? Period.
I have always aimed for group showings, but some people simply cannot make the preferred time slots, so we would have some flex, however once a new slot was accepted, we would still try to get others scheduled for the same time. For all showings, you need to be aware of the drive time, and schedule from the farthest point to the nearest as much as possible. I also would never wait more than 15 minutes past the appointment time. Having a solid, consistent, "sales pitch" at the showing is important. This allows you to ensure prospects see the benefits a unit offers, but I also would make clear any deficiencies, to avoid a change of heart after move in. Things like parking issues, annoying neighbor dog, second floor gets hot in the summer, details of the yard maintenance that would be their responsibility, whatever significant issues might be problematic for nearly anyone.
Bottom line, the depth and breadth of the screening process is crucial to select quality tenants, and many, many tenants over the years would not pass a three criteria shortcut, and many, many would not pay for the privilege of viewing our units, even though, in the case of these three companies in particular, they would often have multiple options, and it was not uncommon to suggest a different unit based on prospects comments at a showing. Which takes us back to my first question...if they are all your owned units, no big deal. If I were a client, and you were pre-qualifying as you indicate, I would expect the vacancy gaps to be within a competitive range.
Most PMCs had to do this during COVID due to government restrictions on in-person showings.
Two thoughts:
1) It really depends on market demand.
In a slow market or slow season, what are you going to do if your method leads to VERY LOW numbers of showings?
The market may force you to change.
2) Have you heard of self-showings?
We've been doing them for almost a decade.
Takes care of the coordination issues and no-shows.
Actually allows you to do MORE showings!
The bottom line is to do what works for you and your clients.
@Mark Updegraff Thanks for laying out the reasoning instead of just the rule. Treating the application as a prequalification for your whole portfolio, not one unit, is the part that makes this model work, because it turns the friction into a placement tool.
I haven't run a portfolio your size, so I can't give you a clean before and after from doing both. What I can offer is what I'd want to measure, since your goal is turning qualified applicants into housed tenants.
First, break the funnel into stages and time each one: inquiry, application started, application completed, approved, lease signed. In a funnel like this the biggest leak is often not at the top. It's the group that started the application and never finished, and the group that waited a day or two for a reply. Those people already showed intent, so an automatic text and email within an hour or two of a stalled application tends to be the cheapest recovery you can build.
Second, the first message matters a lot. Many people read "apply before you see it" as a fee grab. If the first reply explains what you wrote in this post, that one application qualifies them for everything you have and that you'll help place them, fewer people walk away at that step.
Third, a short prescreen before the application (income against your requirement, move date, pets, number of occupants) can keep people who would never qualify from paying a screening fee at all. That's better for them, and it saves your staff from processing applications that were going to be declined.
Fourth, the number that would prove your thesis is the share of approved applicants who end up leasing a different unit than the one they first asked about, and how many days pass between approval and lease signing. If that share is meaningful, the prequalification model is doing exactly what you describe.
One caution for anyone copying the approach: keep it consistent for every inquiry, write down the process, and have a clear way to handle accommodation requests, since uneven application is where fair housing complaints tend to start.
Curious how you track the placement piece today. When someone qualifies but the unit they wanted is gone, roughly how long does it take to get them into another one?
You may get away with this when renting to applicants with weak credentials who already know their options are limited. But for tenants with strong credit, stable employment, and plenty of alternatives, requiring an application before scheduling a showing will only drive qualified prospects away.
Yes, but make it easy.
Zillow has a renter profile: income, credit and pets based on their own estimate. That's the initial filter we use. If someone inquires without any information about themselves, we message back and ask if they meet our criteria on income and credit. They almost never reply, and if then it's weak numbers and they ask if we would make an exception. So I feel it's pretty pointless to entertain people who don't have the credentials to rent a house from us.
I agree, it's basically like a pre-approval letter for a home buyer. Even if it is from an online lender and the applicant filled out their own income and debt, it is a good initial filter.
I don't think that someone who makes a strong income and has good credit would be hesitant to say that when scheduling a schowing. I am also a little spoiled, because Milwaukee has a shortage on rental units, especially nice ones.
@Richard F. Most of the units are client-owned, but I'm also an owner myself. One thing I've intentionally done in our company is make sure my properties go through the same systems as every other owner's. I don't want a special owner/broker lane that hides weaknesses in our process.
So our systems get pressure-tested from both sides. If something we're doing as a management company makes my life easier operationally but produces worse economics for the property owner, I feel that too.
And vacancy is absolutely the test. We're currently running at a very low vacancy rate, so I'm not seeing evidence that application-first is hurting us there. If that changed materially, I'd change the process. The goal isn't operational efficiency at the owner's expense.
@Drew Sygit I agree on market conditions too. I don't view application-first as some universal rule. If demand changed enough that we weren't producing sufficient qualified applicants, we'd have to adapt.
Self-showing is interesting, although I see it solving a slightly different problem. It removes much of the labor involved in showing and the staff time wasted on no-shows. It doesn't necessarily solve the qualification problem. That said, it's something we should probably look at harder.
@Stuart Udis I think you've identified the strongest argument against what we're doing. We undoubtedly lose some highly qualified prospects who have plenty of alternatives and simply aren't willing to jump through the hoop. I don't dismiss that.
The question is whether the good applicants we're losing outweigh the enormous number of unqualified showings we're avoiding. Our vacancy rate suggests the tradeoff is working, but I don't think we've measured the funnel well enough to claim we know exactly where the optimum is.
@Marcus Auerbach Your lighter prescreen may be a really interesting middle ground. If we can eliminate the obvious non-qualifiers before asking someone to complete the full application, we could potentially reduce wasted effort without putting as much friction in front of a strong prospect.
@Michael Clinton You probably gave me the biggest homework assignment here. We aren't currently measuring the placement piece as cleanly as you're describing.
Specifically, I want to know what percentage of people who qualify ultimately rent from us, how long qualification-to-lease takes, and what percentage ultimately rent a different unit than the one they originally inquired about.
That last number is especially important because it's really the thesis behind our process. If someone applies for Apartment A, qualifies, Apartment A is gone, and we successfully place them in B or C, then the application really did function like a portfolio-wide prequalification. If that rarely happens, then I may be giving our process more credit than it deserves.
This discussion has actually changed the question for me.
Instead of “application first or showing first?”, I think the better question is:
What is the minimum amount of friction necessary to protect staff time and screen effectively without unnecessarily driving away good tenants?
Then measure the hell out of it.
@Mark Updegraff Glad it was useful. You can probably get those three numbers from records you already have. For each approved applicant, log the unit they first inquired about, the unit they ended up leasing (if any), the approval date, and the lease signing date. From that you get the share who lease with you, the median days from approval to signing, and the share who land in a different unit.
A few things keep the numbers honest. Group applicants by the month they applied, so people still in progress don't skew the results. Tag every approved applicant who never leased with a reason, such as unit gone, found elsewhere, or changed their mind, because that list is where the real leakage shows up. And if you can, record where each inquiry came from, since some sources may produce applicants who place elsewhere more often than others.
Even a few months of data in a plain spreadsheet will tell you more than gut feel does. I'd be curious what the first numbers look like, if you're ever willing to share them.
“Real Estate is local”
From what I’ve seen with Rochester New York, within the inner city, there are so many non-qualifying applicants that will show interest, that your practice is much more warranted and justified, then it may be elsewhere. The suburbs and more expensive parts of Rochester may be a different story.
This is an interesting approach and I like it, I self manage my personal properties and use a hybrid of what you do its more like this Inquiry → Qualification → Showing →Application → Placement In my local market in Idaho, your system would likely work as our demand for rental housing is high with the amount of relocations and Micron employment boom. We invest in another market in Florida, its a sub market and Im not sure this would work there as the demand isnt as great. I can see how if you managed 100's of doors your system would cut out alot of unnecessary time etc. thanks for sharing
I have to believe that this will, at some point, trickle down the actual performance of the property management company. i.e. your costs are lower, but vacancy rates would be higher.
Great for the PM since you can run your business at better efficiency, but id have to believe that this isn't a great approach for the asset owner. I dont know this of course, but just sharing this view point as its the assumption I would (am I suppose) making, and it would impact how id look at the PM as a vendor. The thought being, the PM isnt aligning their incentives well with mine (as the asset owner).
We do the same thing as far as helping prospects find the best apartment for them and we often place people in a different apartment in our portfolio than they inquired about. This works best when you have multiple apartments available or coming up.
However, we have our own online pre-qualification form (questionnaire) that we ask people to fill out if they haven't already supplied basic information through one of the rental platforms (ie. Zillow) that we advertise on. So, our system looks more like this:
Inquiry → Pre-Qualification→ Showing → Application → Approval
We are typically working on a combination of renting our own properties and renting for other owners. This process works well for us and the prospective tenants that qualify like it too.
We do income and credit prequalification - they must have sufficient income and credit to get a showing. They self-report these to us.
But before that, we have created a YouTube tour of each unit, so they can do a preliminary viewing. If they like the looks of the unit, we'll meet them in person.
Saves us a lot of time. Applicants are very likely to be approved and end up moving in.
I don’t have clean numbers comparing both approaches, but I think the metric you’re focusing on is the right one. I’d care a lot more about how many qualified applicants actually turn into signed leases and how much staff time it takes to get there than the raw number of showings. Ten showings that produce one qualified applicant can be a lot more expensive operationally than losing a few people upfront but spending your team’s time on prospects you can actually place.
Requiring a rental application before a showing can help landlords filter serious applicants, but it may also discourage some genuine renters. It really depends on the local market and how the process is handled. For South African housing updates, is another useful resource. https://hssonlinestatus.co.za/