5 Ways to Find the Right Tenants for Your Rentals

by | BiggerPockets.com

You may have found the real estate deal of the century. You may have achieved the best financing available. You may have the best plan, the best forms, the best mentor. But if you get the wrong tenant, you can lose it all. A common mistake with new landlords is to place just anyone in a unit. After all, they’ve worked so hard to get the rental property purchased and now they have a looming mortgage payment and a vacant unit. Fill ’er up, right?

Not so fast! You actually need to find the right tenant, not just any tenant. This begins with marketing. Here I will outline my five favorite ways of attracting tenants to my properties. If I have a lot of vacancies, and I’m having trouble finding a tenant, I might do all five at once. If vacancies are fairly easy to fill, I might only do one or two. However, it’s important for you to understand all five so you can adjust your marketing campaign to fit your local rental market.

5 Ways to Find the Right Tenants for Your Rentals

1. Sign in the Yard

Perhaps the oldest method on this list for finding tenants—a sign in the yard—is also one of the most effective. You can pick up a “for rent” sign at almost any hardware store for around $5 and immediately start advertising your vacancy. I recommend including all the pertinent information about the unit on the sign directly, or as much as you can fit, to weed out those who won’t qualify. For example, if you just place a phone number, every person who drives by will ask the same question: “How much?”

At a minimum, I like to include the rental price, the security deposit amount, the number of bedrooms, and my phone number. If I have space, I’ll write out a couple of the qualification standards as well (which I’ll talk about in a moment), such as “no smokers” or “650 credit score minimum.” This will further limit the number of “tire kickers” who call and will help you get phone calls only from good prospects.

If you want to take your signage to a higher level, you can design and print a custom sign for around $20 with an online print shop such as VistaPrint.com. This can help you stand out as a more “professional” landlord. I have about a dozen signs printed that have only our phone number, business name, business website, and “for rent” on them. When I use one of these signs, I try to attach a flyer box (a special box, usually with a see-through/clear front, meant to hold informational papers) to it (or near it) so people can get more information about the property.

first-rental-down-payment

Related: 6 Reasons Good Tenants Don’t Renew Their Leases

One word of caution, by placing a “for rent” sign in the yard, you are letting everyone know that the property is vacant (or will soon be vacant). This, of course, increases the risk for vandalism, so many landlords choose not to advertise with a sign.

2. Craigslist

Lately, our number one driver of tenants happens to also be the least expensive: Craigslist. Craigslist is the world’s largest classifieds website, and in most areas, it’s completely free to post a “for rent” listing, which will be seen by hundreds or even thousands of potential tenants. In my experience, the leads I get on Craigslist tend to be higher-quality applicants than those from
other sources, though that could just be my area.

When you’re creating your Craigslist ad, I recommend including as much information about the property as possible and uploading as many photos as you can. Spend some time making your ad stand out. I recommend using the free website Postlets.com to create your ad, because this will help you format your ad so it looks amazing and will give you some basic HTML code you can simply copy and paste into the Craigslist ad to stand out.

As with a sign, I recommend including as much information as possible about the property and the minimum standards you set regarding who can rent the property. This way, the tenant can learn all about the property and decide whether it’s worth pursuing before calling you. However, I do not recommend including the address of the property in the listing, because this will only encourage vandalism. Craigslist allows you to instead include the street names of nearby cross streets so that prospective tenants can know the general area but still need to call you for the specific address.

3. Newspapers

Although newspapers may be dying a slow death, they may still be an incredibly effective strategy for driving tenants to your property. This, of course, depends on the cost of taking out a classified ad in one. In my local newspaper, I pay approximately $20 a week for a basic ad that looks like something like this:

2 Bedrm 1 Bth Apt in Aberdeen.
New paint, flooring, & lots of storage.
W/D Hkps. No pets, no smoke.
555.555.5555.

The goal of a newspaper ad is to deliver the pertinent information in as short of a space as possible, so you’ll want to abbreviate as many words as you can, as I’ve done in my example.

One tip that has worked well for me: find out all the different advertising pricing options and devise a strategy based on that. For example, I discovered that taking out a “monthly ad” was only $80, but I could cancel it whenever the unit got rented. In other words, if I order it for a month but only use it for a week, I only pay $20, rather than the weekly rate of $50.

Related: How to Find a Tenant in Any Market: A Comprehensive Guide

Your local newspaper may have similar pricing strategies. I’ve even heard of landlords with multiple properties negotiating an “annual ad rate” and simply changing the ad to fit whichever property they currently have empty.

exterior-rental-property

4. MLS

If you live in a large city, it’s very possible that the MLS will be the main driver of tenants for your property. Although the MLS is best known for listing homes for sale through real estate agents, homes can also be listed for rent on the MLS, and real estate agents can help bring you tenants—for a price. You will typically need to pay the agent a fee when the property is rented, but this might be a small cost to get a great tenant. If you plan to use the MLS to list your property, talk with your real estate agent about how it’s normally done in your area, as well as the typical prices you may end up paying.

5. Existing Tenants

If you already own a number of rental properties, your current tenants can be a great source of finding new tenants. When I am having a slow time getting a property rented out, I like to send a postcard to our existing tenants offering them the ability to “choose your neighbor.” I also offer a cash reward if they refer someone who ends up renting from me, usually about
$100. This money is only given after their friend has moved in and paid the rent plus deposit.

Which ways have you found most effective for finding high quality tenants?

Leave your comments below!

About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on BiggerPockets.com. Like... seriously... a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of "The Book on Investing in Real Estate with No (and Low) Money Down", and "The Book on Rental Property Investing" which you should probably read if you want to do more deals.

6 Comments

  1. Marina Spor

    I post on Zillow, which automatically also posts on Trulia and Hotpads. It’s completely free. The applicant quality seems to be better than Craigslist, although I post there too.
    These sites make it easy for tenants to search for rentals based on their criteria. I get a good number of leads.

  2. Tim Sabo

    Yard signs in this area tells folks the unit is empty, and for some that signifies a time to break in and steal copper and brass fixtures. We no longer use yard signs due to security issues: in fact, we do not even put the address of our vacancies in our ads or own our website. Tenants deserve privacy and security, and those are our priorities.

    Craigslist is old and outdated. It does not even support hypertext links to your own site. And if you have to use Postlets.com or some other site to create the html for a decent ad, that alone should tell you all you need to know about Craigslist: out-of-touch.

    As for newspapers, ads in daily papers are too expensive. We use weeklies, which offer the same results at a greatly reduced rate. We also use any newspaper’s digital edition-when available-to double the coverage for a fraction of the cost.

    The MLS is great to give you the names of realtors in your area, which can lead you to their own websites. Most realtors and agents nowadays offer Property Management services, so they may have their own site where properties are listed. You can hire them to list your ads, or simply copy their success in your own ads. Post your ads-as Marina suggested-on Zillow/Trulia/HotPads for free (start your listing on the Zillow site).

    Asking tenants for leads can be helpful but can also backfire. If the second tenant does not work out, the first one may move out also. And offering folks money is NOT a good idea: perhaps a discount of the rent for 3 or 6 months-as long as the second tenant remains-is safer.

    • Hilary Mayhew

      This comment is so absolutist it made me giggle :). Alternative ideas and cautionary tales are often helpful, so I appreciate your ideas here. At the same time, all of the strategies Brandon listed clearly *are* working out or proving to be good ideas for his business. They might also work for others. YMMV

  3. karen rittenhouse

    Hi Brandon:
    On the back of the flyers in our flyer box, I always print info about other properties we have for rent. If none are available, I print info about our company – who we are and what we do.

    I also ALWAYS do open houses on Sunday. Anything that’s vacant. I’ve rented tons of open houses at open house over the years. It is a HUGE way to get our name into the community. Many have followed us from open house to open house until they find what they want. It’s great because I meet and speak with the potential tenant face to face, even see what they’re driving and how the kids behave!

    And, I always meet neighbors who come by and have bought many houses from neighbors who show up and say “can you buy my house, too?”

    Open houses are the BOMB! I don’t think investors use them enough. I piggy back on the pattern local agents have created by having them same day and time as they do. Here its 2-4 on Sundays. Fast/easy/effective.

    Thanks for your post, Brandon!

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