Here is the scenario: You have a great opportunity to boost your income by introducing your rental property to the real estate market. The research is done, the investments are made, and now a vacancy is primed for amazing tenants to make it their new home. The problem you now face is; how do you find these amazing Residents?
Many landlords, property managers and real estate agents find themselves in this situation time and time again where the rental market competition is fierce. Statistics have shown that one-third of the population are rental Residents and the common mindset is shifting to this living scenario being a preferable option. Furthermore, Residents are not just the college age demographic with little to no credit. There are nearly as many Residents age 30-65 years old as there are renters who are under the age of 30. This now begs the question; “How can one of these potential applicants become my new, great Resident?
With such a broad span of ages regarding potential Residents, there should be an equally diverse range of methods to attract them to your vacancies.
Here are some of the most successful methods for filling a vacancy:
1. Word of Mouth. This is not the old game of telephone you played as a kid, where you give someone information, they pass it along to someone else, and you hope it returns to you the way you intended. Today, leveraging technology can turn anyone’s voice into the most effective megaphone you can imagine. Some of the most trustworthy Residents can come from those you know. Tell everyone you can about your vacancy through every channel at your disposal.
2. Check your phone contacts and text people who might know a potential applicant.
3. Use every social media network you have at your disposal. Post the rental advertisement on Facebook, Twitter, Instagram, etc. Be sure to include photos.
4. Incorporate your vacancies into small talk conversations as you go about daily activities. A simple “. . . my day has been going well, I’ve been looking to fill a vacancy. . .” can open the door to finding your new Resident.
5. With any method you use do not forget the old adage, “a picture is worth a thousand words.” Keep multiple photos of your rental property on your cell phone and share the photos any time you promote the vacancy online.
6. Know Your Target Audience. Is your vacant property close to schools, malls, business parks or other areas of interest in the city? Look at this information and use it to your advantage to find some high-quality applicants. If a college is in the vicinity, post flyers on campus and highlight features of the house that might be attractive to renters who may not have much experience living on their own. Do not just consider advertising in locations close to shopping, as a perk to consumers. Anywhere with a large number of businesses have employees who likely would be excited to have a short commute.
7. Know Your Policies. There is more to filling a vacant rental than just finding someone to occupy it. The ultimate goal is find well qualified renters who will treat the property with care and pay their rent on time. You will want to filter out the riff-raff that can waste your valuable time trying to rent a property for which they are clearly not qualified. Worse, they could end up creating additional, unnecessary costs for the property. To establish a set of clear, concise and most importantly legal rental policies, there are a few steps you can take:
8. Begin by educating yourself on jurisdictional rental laws. These can be found by doing a search online and referencing a state’s government (.gov) guide and the city website. For example, California released an online guide to outline the responsibilities of landlords and tenants.
9. Once you know the essentials of what is legal and illegal when renting a property, the next step should be writing a set of criteria to be consistently applied with each applicant. This should be a ‘go-to’ document that can be easily read by applicants to know whether they are qualified before they request your time to view a property. Common elements of these criteria include: A base credit score for acceptance; status of rental history (prior evictions, poor payment habits, etc.); minimum, provable income per month; and specific criminal convictions that will result in a denial.
10. Make sure policies you create are compliant with federal regulations, set forth by the Fair Housing Act and also state and city regulations. Many of these requirements ensure no discrimination takes place during the application process –both intentional and unintentional.
When a clear, concise and legally permissible rental policy is available for applicants, they can decide before they apply whether your vacancy is a viable option. This alone not only protects you, but will help bring in more qualified applicants to view your rental property.
Don’t Schedule ‘Interviews’, Plan ‘Viewings’
It is in our nature as people and within our society to know and trust people. This is a good thing, but when it comes to renting a property it can pose some potential problems. The ‘interview’ stage of filling a vacancy is based on perception and opinion by the renting agent. This type of subjective reasoning can get the best of us in trouble and even eliminate the greatest potential tenants.
If an applicant has found your property, they know your rental policy, and they are still interested in it; the next step is to use methods that can keep all applicants on a level playing field. The most common of these is performing a background check that will provide the same type of non biased searches on all applicants. These checks will provide objective information that can be backed by credible data so the decision does not fall on any kind of ‘gut instinct’ that can lead to an applicant feeling they were discriminated against. This is the time when many sections of your rental policy can be checked off to ensure the applicant is a good fit for the property.
Be Patient and Proactive
Finding great tenants can be a game of patience, but the more pre-planning that goes into it, the better you can expect the end result to be. If you can begin the process the right way, you can build the type of relationship that makes re-listing properties few and far between.
This post is intended to spark your thinking on the topic. Please add your comments and suggestions. I am always willing to update articles with thoughts, suggestions and new ideas from our loyal readers. BY: Ryan Green for Multifamily Insight
Mr. Wilhoit is the author of two books: How To Read A Rent Roll: A Guide to Understanding Rental Income and Multifamily Insight Vol 1 – How to Acquire Wealth Through Buying the Right Multifamily Assets in the Right Markets. Multifamily Insight Vol 2 is set for release in 2015.
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About This Blog: Multifamily Insight is dedicated to assisting current and future multifamily property owners, operators and investors in executing specific tasks that allow multifamily assets to operate at their highest level of efficiency. We discuss real world issues in multifamily property management and acquisitions. This blog is intended to be informational only and does not provide legal, financial or accounting advice. Seek professional counsel. www.MultifamilyInsight.com