STEP #1 begins with your initial contact with the prospective tenant. You’ve posted your vacancy, ran your ads and you now are receiving responses. It’s important that you develop a series of qualifying questions, coupled with important information, you will provide prior to taking that first call. I always suggest you assume the identity of “property manager”, not the owner. Using a PO Box and creating an LLC, in which rents would be paid to, makes great business sense.
- Make it a point to advise them of the monthly rent and deposit needed to move in
- Inform them of the date the unit will be available
- Gather their name(s) and reasons for moving
- Determine if they have children and the number of people who intend to live in the unit
- Ask them to gauge their credit reports from very good, good or average, to challenging or poor. Remember that this is only an initial qualifying question. Credit reports will be mandatory for all adult tenants.
- Ask them if they have pets, (how many etc. – if you are allowing pets)
- Ask them if they will be providing landlord references.
The manner in which these questions are answered, provided you ask them politely, will be your first impression of this potential tenant. Make notes on all of these and keep them separate from other potential tenants.
STEP #2 is the showing of the property. It’s usually a good idea to show the property to a few prospects at the same time. This will give the impression that the unit is in high demand. Possibly resulting in you receiving a higher rental payment than originally advertised. This is, however, not required.
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At this point you begin to qualify your prospective tenant:
- Did they show up on time?
- Did they dress for the occasion? They should be trying to, at the very least, impress upon you their worthiness. If they show up looking sloppy, chances are that’s the way they live.
- Were they polite? Their behavior will indicate, usually, just what type of tenant they will prove to be.
- Finally take a quick look at their vehicle. How a person keeps a vehicle is often indicative of how they will take care of your property.
- Walk thru the unit with the prospect and answer any questions they may have. Determine whether or not they are trying to negotiate rent by knit picking. (Make certain your property is ready for showing. The quality of your rental unit or home will greatly enhance the quality of your tenant.)
STEP #3 involves the application and approval process. It is important that you utilize application forms that are legal and well represented in the industry. This includes your rental agreements. I suggest you utilize forms that your attorney has reviewed. A Landlord’s Attorney is a great ally and usually can recommend the proper forms, free of charge.
- Inform your prospect when you expect the application to be completed and returned. Provide them the form at the showing and have them fill it out on the spot if at all possible. Collect any charges for credit reports.
- Review the application carefully for any incomplete information or inconsistencies. You cannot be too careful with this process.
- Submit the application to your source for credit reports. Again, Apartment Associations provide this service. Your Realtor can also connect you with this necessary resource.
- Review the credit report. If you do not know how to read these reports, gain this knowledge. Your lawyer should happily show you how to read these reports.
- Once you’ve approved the tenant, schedule the lease signing and collection of the upfront costs. It’s also necessary to obtain copies of the adult tenant’s identification.
- Inform your tenants that the keys and possession of the unit will be delivered AFTER the checks have cleared
- Make certain that all of the signatures are completed on the rental agreements, the agreements you obtained from a quality resource, and include a “house rules” form that details how you expect your tenants to behave and treat your property. Have them sign this form as well.
- You should be very informed as to the rental agreement you are using. READ them! Know them, and this will help you when the agreement is being signed. READ it to your prospect or be certain they have read it as well.
YOUR LAST STEP is the move in, and this can be done with or without your presence. I suggest you visit that day, or a few days after, to make certain they have taken possession and that the move in was completed without incident. An out of sight landlord can result in activity and behaviors unacceptable to you. Visiting your property once a month is the very minimum I would recommend, and let them know you are there when you visit.