In this post I’ll be covering a step by step guide on how to get tenants. This is the second post in our 5 part series on “How to be a Landlord”.
Advertising to tenants
One of the most important tasks in getting tenants is building a good advertisement that will draw the potential renters in. You want to be honest with your audience (those tenants you want) about the best features of your home and I like to be ready with the one or two annoying things about the place as well. This will help you to come off as the “honest Joe” that you are, and people won’t think you’re trying to scam them by only mentioning the good features of your home.
Use the “How to get tenants” – rental property ad checklist template below to do a quick walk around your home and think about the best features of your home that you want to call out in your ad.
Here’s a quick primer on the template (both a screencast video and an explanation of each section in text below):
Advertising your home’s interior to potential tenants:
In this section you’ll fill out the top 3 features of your home’s interior that you want to call out. Some examples of what to think about:
- Giant master bedroom closet, practically a fourth bedroom!
- Vaulted ceilings make the rooms seem extra-large!
- Tile floors throughout the home makes for easy cleanup and keeps it cool in the summer!
- Large doggy-door installed in the living room, Fido can let himself out when he needs to go!
Advertising your home’s exterior to potential tenants:
In this section of the ad checklist template you’ll want to walk around the outside of your home and think about the best features you want to call out from the outside of the home. Some examples of what to think about:
- Large Pool with hot tub!
- Large grass backyard with plenty of room for dogs to play and rough-house!
- Three car garage with storage cabinets and ceiling mounted storage racks!
Advertising the neighborhood to potential tenants:
In this section of the ad checklist template you’ll want to call out all the features of the neighborhood and surrounding areas. Some examples of things you may want to call out:
- Walking distance from TanSan Mall, with lots of restaurants and shopping!
- Community pool with hot-tub, showers, and bathrooms lots of fun all summer long!
- Cul-de-sac lot with lots of room for the kids to play out front!
Talking to tenants about your home’s drawbacks:
I don’t use this section in the advertisement itself but rather as I’m having dialog with the potential tenants as they are doing a walk through of the home. Try to come up with the one or two things that are trivial but annoying to you about the home. Again I don’t use this in the ad itself but it helps me when I’m sitting down to talk with potential tenants. Some examples of things I’ve called out in the past:
- The light-switch in the kitchen isn’t where you’d think it would be. The switches closet to the room are for the connected living room while the switches further away are actually for the kitchen. It’s annoying, not sure what they were thinking when they built it.
- In the master bedroom the electrical outlet that can be controlled by the light-switch is under the window instead of next to the bed… you’d think they would connect it to the electrical outlet next to bed area when they built it but they didn’t.
The importance of good photos in getting tenants.
I can’t emphasize enough the importance of taking some good photos of your rental property. Find a friend that has a nice camera (preferably a DSLR) and buy them a beer or coffee in exchange for taking some great photos of your property. Make sure you have the place cleaned up… both inside and outside. You want to put your make your rental property look great in your ad and you do that by taking and displaying the best photos of your rental property! Here’s my checklist of shots you’ll want to have make sure you take:
- All the top features of your rental property that you wrote down when going through the above section.
- A screenshot of your neighborhood on a map (like Google Maps) with call-outs for the features you called out in the section above.
- At least one picture of each room.
- At least one picture of each appliance that come with the property.
- A curb appeal shot (a nice shot from the front of the home).
Don’t forget to save your hard work!
You’ll need to keep all these documents in a safe place so you can use them lease after lease. My favorite place for storing all these documents is Dropbox. If you put this docs on Dropbox they’ll all be automatically backed up and versions created. On top of that you’ll always know where to go when your tenants lease is up and you want to start advertising again!
Where to advertise to get tenants.
Now that you’ve gotten that ad written (or at least the details you’ll need to write a great ad for your rental property so you can find some tenants) you’ll need to put your ad someplace. There are lots of free and paid options out there in this section of the post we’ll run you through our favorites.
- Your front lawn: An excellent way to find tenants is to put a sign up in your front lawn. I have friends that rent out multiple homes and they swear by this method. These friends of ours claim that they get more folks that call on their place and become tenants from the sign in the front yard than they do advertising any place else! You can find big “House for Rent” signs at your local home depot or you can make one yourself on the cheap. You’ll want to list your phone number (preferably a Google Voice phone number for landlords) in dark black sharpie pen on the sign so people can call you on it. Often times it’s neighbors or someone who lives in the neighborhood that knows of someone whom is looking to become a tenant that you’ll get the referral from… so be sure to ask how they heard about the place. Assuming they heard from neighbors you can speak with your neighbors to learn more about your potential tenant’s.
- Craigslist: Our second favorite place to advertise is on Craigslist. This only works well if you are in or around a city where they use Craigslist a lot. We get tons of calls from Craigslist but probably 50% of them are from folks that aren’t all that serious. You’ll want to come up with a good template for Craigslist and post often (at least once a week) as your property will get pushed down in the listings. Craigslist is a free service.
- Rentals.com: Rentals.com is our favorite paid site. They have you fill out a great form that captures all the relevant data about your property and allows people to search by these characteristics of your rental property. You can also pay to have your rental property promoted to potential tenants by moving it up in the search ranking to the top of the list.
- Facebook: Nothing beats a little word of mouth advertising and if you have a large base of friends that live in your area I’d certainly promote your rental property to potential tenants using your Facebook network. I’ve even seen some folks offer incentives to their friends by putting a gift card up for grabs for the first person that gets them a serious referrals and even finders fees for friends that land you a tenant.
So you’ve found some possible tenants, now what?
After you’ve found some potential tenants you’ll want to vet them a bit and make sure that they are really someone who you’ll want living in your place for the next six months to a year. I’m defining potential tenants as people who have approached you about wanting to apply and see what the next steps are. You want to get a good feel for whether you think they’ll be able to make rent each month, if they are trust-worthy, and if they seem like reasonable people. Here’s the different tools / techniques we use for finding the right tenants:
- The Rental Application: You’ll have them fill out a template rental application that will tell you general things about them like what their full name is, how long they’ve been employed at their current job, how much money they make, where they last lived, their current address, personal and professional references, etc… You’ll also have them pay a fee for applying that will cover the cost of their background and credit checks.
- Talk to them: Have a good conversation with them. Read their body language and how they react to being shown your rental property. Be observant and look for subtle clues about what it might be like having them as a tenant:
- What is their attitude like?
- Did they complain a lot about their past landlord?
- Do they smell like smoke (assuming you have a no-smoking policy).
- What kind of questions did they ask you?
- How did they answer questions you had for them? We they articulate and to the point? Did they speak in generalities? Were they overbearing or aggressive?
- Did they give you a lot of stories with drama with out your asking?
- The Internet
- Google Search: Here you are looking for any questionable complaints about these people or photos that might give you a clue to their character. Sometimes you’ll find blogs they’ve written or articles about them.
- Facebook / Twitter / Other Social Network search: Here you’re looking for their Facebook page. You’re hoping to find things that clue you off to what they might be like as renters. As an example, if you have a strict no-smoking policy in your rental property but you find lots of pictures of them smoking on Facebook and they don’t seem to take your “no smoking policy” discussion seriously you might want to think twice about renting to them. Also are there clues about where they last lived or any complaining they did about their past landlord online that you can compare to their application form.
- Linked-In and other Professional Networks: See if you can find them on Linked In. If so does their employment history their match what they told you in their rental application?
- Craigslist: This one is a bit dicey but I’ve known a couple of landlords that have found some really questionable stuff (like escort services, sub-letting, drug paraphernalia sales, etc..) on tenants they thought were going to be great from talking with them and it probably saved them much hassle. You’ll want to search by name, search by phone numbers they’ve given you, and search by email address.
- Professional Services: Generally these are services that you need to pay for. I always pass along the cost to my potential tenant and let them know that if they are serious they will need to pay an application fee. I don’t mark up the application fee at all, just pass the cost along to them. In Phoenix I use AAA Landlord Services and they do a pretty good job. AAA Landlord Services does both Criminal and Credit checks and the fee is pretty reasonable. The service you use will walk you through the process and tell you how to go about collecting the information they need if you just ask.
- Criminal Background Checks: A criminal background check will show you any issues they’ve had with the law over the past 7 years or so. This will help you understand if the person is someone you want to rent to. I generally give people the benefit of the doubt when I find something in the background check and ask them to tell me about it. If nothing else you’ll usually hear an interesting story. You’ll need to read their body language and look for queues whether they are being honest with what they are telling you. In the past I’ve rented out to some folks that had a shady background 7 years ago with no issues since. They were very up front about what was found in the background check and they turned out to be some of the best tenants I ever found.
- Credit Checks: A credit check is just what it sounds like, it’s going to check the person’s credit and tell you what their credit score is and show you any questionable items in their past. This will allow you to have dialog with your potential tenant on anything that looks suspicious or makes you nervous. You can change your security deposit or negotiate with them on rent based on your comfort level here.
After you’ve singled out your tenant and want to sign the lease.
So you’ve done your due diligence in creating a great ad that pulled in lots of potential tenants, you vetted all those potentials and you’ve narrowed it down to the “the one”, now what? I’ll tell you, from experience, make sure they have some skin in the game especially if you are 21 days or more from the move in date. To do this you’ll want to make sure they put down a non-refundable deposit to hold the place for them until move the move in date. Sometimes tenants don’t have their full security deposit until after they move out of their current rental property. In that case, assuming you want to work with them, you’ll want to have them put down a good chunk of it now in order for you to pull your property from any listings you have out there. This should be enough to deter them from walking away or finding another place at the last-minute putting you back at square one. A few other tips and tricks as you’re signing the lease with them:
- Practice: Talking with your first tenant can be intimidating especially when it comes to signing that first lease. You want to come across as having everything under control so we recommend spending some time mocking up the lease and addenda with friends or your spouse. This will really help you to look like you know what you’re doing when it comes time to sign the lease for the first time.
- Communicate what is in the lease that they are singing up for: Make sure you walk them through the lease and explain all your key points. The lease addenda is huge and very helpful. I usually go through ahead of time and highlight the document in yellow all the areas that I want to make sure to verbally cover with them.
- Talk with them about communication styles: Let them know it’s your property and your most important investment so you’re going to be interested in how things are going and that the place is being taken care of. Show them your regular maintenance and check up schedule and be up front with them on what to expect with respect to visits and phone calls. This is important because they might take your questions as accusatory if you don’t cover this and the tone of those phone calls up front. Also let them know what your preferences is on forms of communication (do you like emails better than phone calls, do text messages work for you, etc..). Ask them what works for them… can you text them, how long should you wait on a response to email before you call, etc…
- Don’t negotiate on labor / home improvements in lieu of rent if you don’t have to: If you do we have some templates to help you think through trading for rent, but in general based on our experience we don’t recommend it. Also if you have to we would highly recommend getting the rent money up front and then once the work is done and inspected and considered up to standards you can refund the traded amount.
How to get tenants – Summary
So that’s the skinny on how to find tenants folks. It’s not as hard as it seems and once you’ve gotten into a groove it can be pretty easy. Do your homework, prepare, and above all trust your instincts and you’ll do just fine in finding tenants for that rental property of yours!