How to find great tenants and avoid the bad ones?

How to find a reliable tenant who treats my property with respect, doesn’t disturb neighbours, pays on time, stays forever and does not cause any trouble?” – is the question every property manager, landlord or soon-to-be-landlord will ask at some point.

Here are 11 principles to keep in mind when looking for high-quality tenants.

1) What is your definition of a quality tenant? This may come as a shock, but we don’t have tenants.  Like any business, we have customers.  Shift your definition of a tenant to a monthly paying customer.

2) What is your value proposition? Customers always look for exceptional customer service and the highest value of a product such as “rental suite”. Therefore, make sure you deliver the value they look for. What makes a big impact? Professional photos, professional cleaning, professional leasing managers. Little things make a big difference.

3) Raise your price. One of the best ways to find great customers is to raise your asking rent. This will attract A type customers. However, your product and service has to match the expectations of A type customers.  Check out the previous blog on how much to charge for rent.

4) Advertise and follow up right away. When you advertise on various websites, make sure you follow up with all the inquires that are sent to your Inbox right away. Email back, call or text back your potential leads.

5) Get to know them. Always ask some screening questions at the first contact. At this point, you want to know if they fit the customer profile you’re looking for. Here’s our standard screening questions:

  • What is your situation, and why are you moving?
  • When is your preferred move in date?
  • How many people will be living at the property?
  • Where are the adults currently working, and what is monthly household income?
  • What type of pets do you have?

6) Impeccable Customer Service. If they meet your initial screening questions, do the showing of the property as soon as possible, while they are interested. It also gives you an opportunity to meet them in person and ask them the same screening questions again to determine consistency. Did they arrive on time to the showing? Where they positive and respectful? Listen carefully for what they say.

7) Sell your value. Present the property in the best light possible. Highlight benefits and not just features. Example: “This place is right next to the transit which will reduce your commute time and save you gas.

8) Use a Rental Application. It helps to create an overall profile for your customer. You can see where there are employed or go to school, where they lived before, how much did they pay in the past and, most importantly, if they have a financial capacity to pay rent. Their housing cost should not exceed 40% of their net monthly income.

9) Check references. Call their last 2 landlords, 2 professional and 2 personal references in addition to the current employer. We ask everyone this one critical question: “Would you rent to Melissa?” If they say “yes”, ask them “why” and listen.

10) Request a guarantor. Not everyone has a stellar credit score, and most students simply have no credit history. Just like the banks, aim for credit score above 680. Otherwise, request for a guarantor to sign the lease with them. Most quality tenants will follow through.

11) Don’t settle. It is a good goal to lease up your rental property immediately. However, keep in mind that dealing with a trouble tenant costs way more than one month of rent in repairs and legal fees…

Finding a great customer is a process, even after so many years in business. There are always more nuances on top of this! If you have additional questions or interested in our Tenant Placement Service to find a perfect customer for your rental property, give us a call! We also have access to a large data base of quality tenants (high tech, government, young professionals) who are looking to rent in Ottawa. If you’re looking to rent out your property right away, we have 15 websites we advertise on. Simply contact us at info@buildinginvestments.ca or at 613-853-4833. We offer a complimentary property assessment without obligations. We offer the best properties for the best people.

Happy Renting!

 

Nick Legault

Winner of the prestigious 2017 awards from the Real Estate Investment Network