So you have purchased your investment property, it is being advertised and you have received applications…. now how do you choose which tenant you want to secure?
Here are my insiders tips to being able to find the best tenant:
Meet them – if you live nearby or if you are renting out the property yourself make sure you meet the prospective tenants, this is imperative. Use your intuition, what is it saying to you? If you cannot meet them then ask the person who has done this on your behalf some probing questions, were they neatly attired, were they polite, did they show up on time, were they early? Did they have any pets with them? Are they desperate to find accommodation if so why? How many people want to live there? How long for? These are all indicators as to what type of tenant they are.
Ensure that they complete an application form – I remember in the UK when I rented a property, the landlord literally met me and my flatmate and then decided there and then without any paperwork that he would allow us to rent out his property for 12 months. It was great for us but if something had gone wrong he would have been in all types of trouble with his insurer or the Freeholder of the property.
Application form presentation – Have a good look at the application form, is it a mess with scribble all over it? Is it neat and tidy? Was it sent electronically? Was it slipped under your door in an envelope? Was the application presented in a bound folder (don’t laugh I have had this in the past)? I have had others that looked like and smelled like they were filled out in a pub with stains on them etc. You can tell a lot about a person by the way they present their application forms.
Identification – check their ID carefully – I had a colleague who agreed a tenancy but the ID was fake. She did not realise this until the Police contacted her as they wanted to raid the property for drugs and stolen goods. My old boss raced down to the property to prevent the Police from kicking in the door and doing any damage to the property. Constantly ask references to confirm the details on the applicants ID. Get those vital details checked i.e. their date of birth, their address, their mobile phone number etc. The more people who confirm those details the better.
How did they speak to you? I have had tenants who have been so rude to me prior to gaining a tenancy that I would never recommend them for a tenancy. I have to have a relationship with the applicants for a minimum of 12 months. Why would I do this to myself or to my client? I have to admit that I am always astonished at how people think that they can talk to a property manager prior to a tenancy. I will never agree a tenancy to a rude applicant.
Check out their references – this is a very important step. Make sure that you never call mobile numbers, always search for the landline equivalent when it comes to finding out more about the applicants and their jobs. You need to know the name of the company that they work for. Then you look up the registered landline number and you call and speak with the Receptionist – ask for that person by job title not by name. Ensure that you speak with their direct employer/manager. Ask the receptionist who their Manager would be. I could not tell you the amount of times a prospective tenant has put their work colleague down as their “Manager”. Go via the receptionist each time, they will always point you in the right direct.
Use the internet – Check them out on as much as you can on the internet, ensure that you check an industry recognised database to see that they are not black listed by other agents. Do a public records check, I remember doing my due diligence and discovering that a prospective tenant had found out his girlfriend was cheating on him. He learned who the man was and when he found him, he ran over him in his car. My client and myself did not want someone with a history like that as a tenant. I could not imagine the risk that a staff member would have just going into a property with him knowing that there had been past aggression.
Call their personal references – you will be surprised at what information you can glean from them. Most of the time it is 100% accurate and they favour the applicant however I have had a personal reference tell me to not rent the property to this prospective tenant because he was recently involved in a meth lab set up. Thank you for being so honest Mr Personal Reference! A meth lab is a very expensive mess to clean up. In order to clean a meth lab back to a non toxic state, all carpet, curtains, beds, toys, linen, couches and other highly absorbent material must be removed from the affected property and either clean (for high value items) or disposed of. All food preparation surfaces such as kitchen benches will need to be removed and disposes of in most cases. It is a nightmare. Prevention is better than cure.
Ask the applicant to do something for you – supply you with some more information, get someone to call you back – that kind of thing. Test how good they are at follow through. I use this technique when I am hiring staff too! Some people will do as you have requested, others won’t and I am constantly surprised by the amount of people that spend their time doing all of the initial ground work and then fail to do the required follow up. If you have maintenance that needs to be carried out and you need a tenant’s assistance to get it done, you want to work with someone who can and will assist you instead of someone who will not be as responsible.
Phone calls – track how many times they have contacted you during the initial phase. There are those tenants who will call you 10 times a day. It has been my experience that this behaviour will not stop during the tenancy. You want tenants who are relaxed and who will not take up your day with small issues. Alternatively they call so much because they are anxious to secure a property. If they urgently need to move home, this should raise questions too. Why have they had to move so quickly? What has happened, have they had other applications declined? Have they been evicted?
All of the above are red flags and they will help you to assess if you want to proceed with an applicant or not. If you only find one issue that has been brought to your attention or that does not add up then you should ask the applicant to explain to you in further detail.
Sometimes there is a very good reason for an issue, other times it will just not add up. It is when I see a few of the flags that I recommend that an application is declined. If a landlord and I are torn between accepting an applicant or not, we will usually go with my gut.
With over 25 years experience as a Property Manager I have fine tuned my instincts and intuition when it comes to choosing tenants for my clients. So do as the professionals do and listen to your intuition too!