How to Find Tenants and Keep Them
Tips for Finding Good Tenants and Keeping Them
As real estate investors, the thing that often keeps us awake at 3 am is keeping rentals filled with decent tenants. The cost of finding new tenants, screening them, and getting them settled in can quickly crush our profits. That says nothing of the stress and tension vacant rentals can create.
But how can we find good tenants in the first place? Once we’ve found them, how do we make sure they don’t move on to greener pastures, leaving us scrambling to find suitable replacements? Use the tips below to fill your vacancies quicker, and keep them filled for longer.
Network, Network, Network
One of the most powerful ways for real estate investors to find good tenants is to form relationships with others in the field. Other real estate investors, realtors, and rental managers are excellent connections to encourage. A property owner’s advertising doesn’t stop working when all her units are at capacity. She’ll most often pass referrals to others in her inner circle. If that’s you, you’ll benefit, making her your best potential source of solid tenants.
Advertise in the Right Places
Good tenants don’t look for rentals on free ad sites like Craigslist. Rentals.com and RentalHomesPlus.com are good places to start instead. Referrals from friends and family are solid options, as is hanging out a shingle on social media sites like Twitter and Facebook. List all the positives you can think of about the rental, from number of rooms and bathrooms to neighborhood to special features like a garage, swimming pool, or laundry room. Also consider placing flyers with the HR departments of local businesses that hire good people.
Fix Your Broken Windows
The Broken Windows theory maintains that a little evidence of disorder breeds increasing turmoil. What’s that got to do with finding good tenants? If a tenant finds your rental property unkempt, grimy, or with a corner of crown molding hanging free, that sends a signal. Even before you advertise, clean and inspect the house or apartment with a tenant’s eye. Don’t worry about high dollar items, but look at all the little, curb-appeal details. If you see anything askew, sort it out, and fast.
Don’t Be Desperate
Finding a tenant who stays only a short time can be worse than not finding one at all. Cleaning costs and missed opportunities can quickly eat up whatever we earn from a fly-by-night renter. Take the time to screen each applicant thoroughly and then avoid making an emotional decision out of panic. For added security, require a deposit and wait for the check to clear before accepting tenants.
Have a Rental Application, and Use It
A rental application should collect an applicant’s name, driver’s license number, social security number, income sources, references, number of pets, and other useful information. Don’t have a rental application? Google “free legal forms” and get one.
Next, use the rental application. That doesn’t just mean getting prospective tenants to fill in the blanks. It means performing a background check through a reputable firm like CreditInvestigators.com. They’ll dig into credit history, employment, evictions, bankruptcies, criminal records and other details to make sure you find the best tenant you can. They cost around $50-$80 per report.
Keep the Tenants You Already Have
Maybe more important than knowing how to find good tenants is understanding how to keep them. The simplest way? Follow the golden rule. As the owner of one of the top ten Harley Davidson dealerships in the country said when asked how he made his fortune, “I just treat people how I’d want to be treated.”
- The 2-month interview. To keep good tenants, talk to them at the 60-day mark to ask how things are going. Is there anything they’d like done? Would they like a room painted? A faulty washing machine replaced? A $150-$250 concession may hurt your budget, but not as much as losing a good renter. Do they want the moon? A good tenant will understand that you have budget constraints as well.
- Address concerns fast. If a good tenant complains about a slippery driveway every time it snows, keeping them can be as easy as calling back instantly to listen to them gripe. Even if you can’t fix a problem right away, making a good renter feel heard and sharing your timeline with them can go a long way toward keeping them around.
- Invest in quality. Buying the cheapest fridge, stove, or dishwasher may seem like a wallet-booster, but it isn’t. Aside from the likelihood you’ll have to replace cheap fixtures more frequently, chintz sends a message to your tenants that you’re not committed. Once they understand that, why should they stick around? Keeping a good tenant can mean nothing more than proving they can count on you. A few hundred more spent on a fridge sends that message several times a day.