You need good tenants that are the right fit for your property. It is essential to the success of your rental venture. Even more so if you’re planning to House Hack, and live in some portion of the house. If that’s you, or you’re planning manage a rental property yourself, then keep reading to find how to get a good renter.
In my case, I bought a triplex with the intent of living in one unit. I also ‘inherited’ tenants when I purchased the property. Immediately having tenants provided instant income, and valuable lessons. However, I was very happy when I got to do the screening and selecting, and got my first good renter.
The Lease
Before you welcome rent-payers into your property to call it home, you have some mental and administrative work to do. The more work you do up-front, determining exactly what you looking for in a tenant, what is acceptable or not, and putting it into a rock-solid lease agreement, the better off you will be.
You can do a lease yourself. But as it is a legally binding document and the backbone of your real estate business, I wouldn’t blame a person for getting some legal help. I would NOT take a standard one page lease agreement, print it out, and think I’m done. That’s all the legal-ish advice I will give. There’s lots of good information out of there on the internet for you from better qualified and more interested people than me.
The more work you do up-front, determining exactly what you looking for in a tenant, what is acceptable or not, and putting it into a rock-solid lease agreement, the better off you will be.
The lease is where you will clearly state all expectations and consequences of failing to meet those expectations. As long as its legal, non-discriminatory, if you want to specify it, put it in the lease. My lease is 12 pages long, practically a novella, I know, but developing it helped me get clear on what I needed in a tenant.
Professional Tools You’ll Need
When considering how to get a renter, you first need to be a good landlord. You’re about to enter a professional agreement, so it’s probably best to start looking like you know what you’re doing.
- Background/Credit Check Service: There’s several out there. Until I start getting an affiliate link, I won’t mention which I use. In general, you should have vetted a few, decided which one you’re going to work with, and have tried it out yourself.
- Rent collection method: I highly recommend an electronic rental income system for several reasons. First, it adds a layer between you and your renters in some uncomfortable situations. So, its the website that sends them a reminder their rent is due, their lease end date is coming up, or automatically assesses a late fee. It helps with accounting, you just export a spreadsheet at the end of the year, and viola! There’s also no running around picking up checks, dealing with deposits, of course. Lastly, most modern renters prefer it and will appreciate being able to set up automatic withdrawal and such. Many services are free, when linked with their background/credit check service, which you’re going to need anyway. Although, some will take a few days to transfer funds to your bank.
- Business-ish card: Nothing says “I’m in Business!” like a business card. You don’t anything fancy, just something with your legal name and contact information on it. Something that says to potential renters that you’re a legit, stand-up person who they should trust to answer a phone call in the middle of the night when something breaks.
Ready to go to Market
Armed with your lease and other business materials, it’s time to put your wares up for sale! As part of your property search, profitability assessment, you probably know what it has rented for in the past, what you think it’s worth and what you’re hoping to get. BUT…now is the moment of truth, actually getting someone to rent it for the amount you want to make the place profitable.
Know Your Property
First and foremost, you should know as much as you possibly can about the property, the neighborhood, all the good and bad. Spend time there, be around at different times of the day, if possible, even stay the nigh there. If there’s an Ecstatic Dance next door on Wednesday nights, you need to know that. You can tell potential tenants, and they self-select if that’s good with them. Better yet, you might want to go join the dancing and leave some business cards…the perfect tenant might be there already!
Listing Your Property
Pick your platforms that you’re going to use…i.e. Craigslist, Zillow, Trulio, Apts.com, etc. Some platforms that normally charge a fee might be included with your background/credit check and rental service. Here’s the essential elements of a good listing.
Get Good Pictures
We are visual beings, the importance of an appealing first picture cannot be underestimated. IF you don’t have the skill or equipment to get good pictures, beg, barter, whatever you have to do to get them. I can’t tell you how many pictures I see as the top one for a rental listing and think “that was the best you could!”
Be Accurate
Take good pictures, but not deceptive ones. Don’t try to hide any flaws, in fact, try to document any ‘peculiarities’ of your property and be open about them. You don’t want hidden deal-breakers to waste people’s, or more importantly, your time. In fact, having a floor-plan can be helpful. So if someone is asking themselves, ‘where will my drum set go?’ they can figure that out themselves. (The answer is, of course, in your parents garage, not in my next-door rental 😉 )
Channel Your Inner Poet
Say the best thing about your rental in the first sentence, and make sure it has a few good adjectives. I’m talking DESCRIPTIVE adjectives, not just something like ‘nice’….use ‘sunny, spacious, sleek, homey.’ You need something that sparks a feeling in the reader. ‘Sought-after location, cozy and private…’ catches the emotion more than ‘adequate shelter adjacent to Whole Foods.’
Channel Your Inner Technical Writer
Make the rest of the descriptions as unbelievably detailed as possible. List the number of beds and baths, even if its located somewhere else, depending on your platform. If your pictures of the place have furniture in them, be sure to state ‘unfurnished’ in your listing. Detail the appliances, the flooring type, the heating, cooling, parking….again, even if it says so elsewhere, say it again. I will give people the benefit of the doubt, and say that they’re just stressed out, going through lots of listings, and that’s why they forgot how to read. Also include the requirements, such as back-ground and credit check, non-smoking, no pets, etc. Include all the greatest hits from the master-piece lease you created!
Set Expectations
Now is the time to consider and convey things such as when and how you will communicate with prospective renters. If you want to only be contacted by email, only between 1-5pm, will show only on Tuesday’s and Thursdays…
Let the fun begin!
Anyone who has ever worked customer service will feel me on this one…when people are involved, its going to be interesting! Hopefully you’re somewhat of a people person, or can fake it well enough, if you’ve decided to own and self manage rental property. But I promise you, once you start fielding phone calls and showing the place, its guaranteed you’re going to get things thrown at you that you weren’t prepared for, meet some interesting people, and hear some crazy stories. People will want to negotiate, want you to back down on lease terms, etc. It can be overwhelming, but hang in there…you’ve come this far. If you actually enjoy this part, you’re a special breed with a skill you can exploit!
The Renter Dating Game
You’re listings are live, and its just a matter of time before you get your first phone call. The conservation is going to go something like this…
“Hello, this ‘Insert Professional Greeting?“
“I’m calling about your rental, is it still available?“
“Yes it is, may I ask who I’m speaking with and where you came across our listing?”
My name is ‘Insert Name’ I saw it on ‘Platform X,’ when can I see it?
People always want to jump right to setting up an appointment to see the place! This is where I recommend saying something along the lines of “Before we get to that, I liked to tell you a little about the place and make sure we’re on the same page its going to work for all parties.” Then you spout off what was in the description to them. It’s a 2 bedroom, 1 bath, etc, etc, etc. You will be surprised how often people will immediately say, ‘Oh, I thought it was this other place, or I’m looking for something 6 months now.’ And boom, you just saved yourself a lot of time.
How to Steer the Conversation with your Potential Renter
But first, the basics. Who will be occupying the place? I find that’s a good place to start. Sometimes people call on behalf of other people, which is often a run-around. I would carefully guard my time with someone saying they’re speaking on behalf of someone else. Generally, however, people will start offering information about themselves and their situation, and a conversation can flow quite nicely. They might volunteer that they’re moving to town to do a silent meditation on Wednesday nights, to which you might respond, “well, actually….”. Because you’re awesomely prepared and know your property, you will have saved this lovely person and yourself some trouble.
My favorite question that I make sure I ask is “what are you looking for in a place that you saw this listing and though this might be the right place for you?” Lots of good conversation fodder there. I always ask, “what other questions or needs do you have?” Often, people will put off asking a difficult question until pushed, so this is like a ‘speak now or forever hold your peace’ moment.
Now you’re officially in sort of a ‘dating’ world. Some conversations will clearly end with both parties agreeing the fit was not right. Some, you can tell have reservations, even though your place is clearly the most perfect place for them…which you gloomily end with ‘give me a call back if you’re interested in pursuing further.’ Some will be too eager-beavers on their side, and some you’ll be gaga-eyed over and start practicing writing their name on the lease.
Actually lining up showings, is like rounding second base. You should only have some pretty good prospects that you let get that far. Once you’re 99% sure you have a home run, then I send the prospective tenant a copy of the lease to review, and ask them to review it. Only after knowing we’re all very clearly in agreement in everything in the lease, then I ask if they would like to move to the background/credit check.
Keep Organized!
If you’ve cleared the first hurdle, you’re both being on the same page about the basics of the property, then its time to start taking notes. Digital, old-school pen on paper, whatever, its time to start gathering information somewhere you can refer back to it. People will start to run together in your head, you may want to note areas that if they pursue the rental, you’d want to follow-up on, etc.
Takeaways
Throughout the journey, feel strong in your lease, and lean it on when things come up. Someone asks for something that you’re not sure of how to deal with it, say ‘I need to consult my lease’….if you’re feeling weird about something, there’s likely a good reason. When in doubt, delay. Sleeping on something can really help you get clear, or come up with solutions you hadn’t even considered. As long as its not discriminatory, you can set the policy. If its not in your lease yet, it can be.
As a first time landlord, it can feel a little desperate….like you need to start comprising if you don’t find the perfect tenant right away. Be calm, trust yourself, and most importantly, don’t actually BE desperate. Make sure you’ve budgeted appropriately for vacancy. It is worth it to wait until you have a renter that is very likely to meet all your requirements, and who knows they are very likely to be happy in your expertly managed property.
Helpful Links
- Landlord background/credit check & rent collection: https://cozy.co/
- Canva for business cards: https://www.canva.com/
- some of other article
- OTher affiliate linke?