Finding Tenants Fast

August 8, 2023

Krista and Seamus dive into the process of finding tenants for their rental property. Seamus outlines the efficient timeline from discovering the property on July 3rd, facilitated by recognizing the face of the real estate agent, to securing it under contract the next morning. They emphasize the importance of utilizing publicly available information and incorporating contingencies for thorough investigation, such as assessing the Homeowners’ Association (HOA), into the closing process.

The rapid acquisition of the property, described as equivalent to a cash offer, allowed them to close within 16 days. Anticipating the need for tenants, they pre-emptively listed the property on TurboTenant, leveraging the platform’s rent estimate calculator and the images they already had. This proactive approach ensured they had potential tenants lined up by the time they officially owned the property, showcasing a streamlined and effective method for tenant acquisition.

Tenant Selection Strategy

In their process of finding tenants, Krista and Seamus decided to list their rental property at the higher end of local rents for two main reasons: to enhance the property’s cash flow and to attract applicants with a solid source of income. This strategic pricing helped them draw in a specific tenant demographic, ensuring a better match between the property and potential renters. They found that being explicit about their renter criteria in the property description was particularly effective. It led to applicants self-selecting based on whether they met these criteria, streamlining the screening process without compromising on the quality of tenants. This approach not only slowed down the process slightly but proved to be a valuable tactic in attracting the right applicants.

Pros and Cons of the Pre-Screener

The pre-screener tool proved invaluable for Krista and Seamus in managing the influx of leads while juggling the closing of their new property. This step allowed them to efficiently sift through potential tenants, ensuring they only spent time on applicants who were a good match for their property. By requiring every interested party to complete the pre-screener before scheduling a showing, they streamlined the process, focusing their efforts on serious candidates. This approach not only saved them time but also enhanced the overall efficiency of finding the right tenant, demonstrating the importance of qualifying leads early in the rental process.

Pet Policy Decisions

So another question that pops up often with our landlords is whether or not to accept pets. What did you decide with that?

Yeah, so we went back and forth a lot around that. I know from a statistics standpoint, the majority of renters have pets, right? And so what we decided is to first start without pets, but be flexible on it.

The one thing we really liked about this property is it had hardwood floors throughout. So there were no carpets that could really do some serious damage to. And so our thought process was we start with no pets. If we’re not happy with the lead volume or the options that we have, we can always add on pets afterwards.

It turns out that those interested didn’t have pets and the renters that are current tenants, the individual we end up filling it with, weren’t looking for a property with pets anyways. So it was kind of a win-win from that standpoint.

I’m glad we took that approach. First, we are also very willing to be patient and wait. There wasn’t a high amount of urgency for us. And so we allowed it to be listed for a little bit longer knowing that we were going to restrict our options a little bit by not having pets.

Security Deposits and Move-In Arrangements

Krista and Seamus’s approach to filling their rental property provides valuable insights for landlords on flexibility and strategic planning. By starting the marketing process before closing, they positioned themselves to be selective in tenant choice, leveraging the higher rent as a tool to attract financially stable applicants. They also remained open to adjusting key variables, such as rent price and pet policies, to enhance the property’s appeal if needed.

The decision to set the security deposit at one month’s rent, and then reduce it for tenants with cosigners, showcases a balanced approach to risk management. Assessing the tenants’ and cosigners’ backgrounds provided them the confidence to lower the deposit slightly, acknowledging both the property’s condition and the financial security offered by the cosigners.

The move-in process was uniquely managed due to the timing with the 4th of July parade. Despite the unusual circumstances, Krista ensured a smooth transition for the tenants by providing them with keys and completing the inspection afterwards. This not only allowed the tenants to start moving in according to their schedule but also gave Krista a chance to observe the tenants’ setup within the apartment, further establishing a good landlord-tenant relationship from the start.

This detailed account emphasizes the importance of adaptability, thorough tenant screening, and clear communication in successful property management. It illustrates that being prepared and proactive, while also willing to adjust strategies as circumstances evolve, can lead to a beneficial outcome for both landlords and tenants.

Setting Up a Positive Relationship With Tenants

Krista and Seamus emphasize the importance of a detailed move-in inspection process, akin to renting a car, where tenants are encouraged to identify any pre-existing issues. This approach not only protects the tenants from being held liable for damages they didn’t cause but also strengthens the landlord-tenant relationship by demonstrating the landlord’s commitment to fairness and transparency. Conducting the inspection together with the tenants further reinforces this, ensuring they understand the landlord’s genuine interest in protecting their security deposit.

Moreover, Krista’s additional efforts to prepare the property for the tenants—such as turning on the air conditioning, upgrading the thermostat, replacing an old toilet seat, and providing essential supplies like toilet paper, paper towels, and cleaning products—go beyond basic requirements. These thoughtful gestures not only enhance the tenants’ move-in experience but also subtly encourage them to maintain the property’s cleanliness and condition.

These practices suggest that small, considerate actions can significantly impact establishing a positive and respectful landlord-tenant relationship from the start. By investing in these initial steps, landlords can set a cooperative and communicative tone for the tenancy, potentially leading to smoother management and more satisfactory experiences for both parties.

Landlord Tips From Experience

Krista and Seamus wrap up their discussion by emphasizing the importance of due diligence, particularly when dealing with Homeowners Associations (HOAs). Seamus shares his realization of the impact HOAs can have on the financial viability of a rental investment, highlighting it as an essential area for research and understanding due to the potential for significant, often overlooked expenses. This insight is particularly relevant in areas like Colorado, where HOAs are common, underscoring the necessity for landlords to fully grasp all aspects of their investment, including those that might not be immediately apparent.

Additionally, Seamus touches on the value of preparing a property for new tenants with thoughtful gestures. He suggests that landlords consider what they would appreciate if they were moving into a property and act accordingly. This approach, he notes, can foster a strong landlord-tenant relationship from the outset. Simple, inexpensive actions, like ensuring the property is clean and stocked with basic necessities, can significantly impact tenants’ satisfaction and perception of their landlord.

The conversation concludes with an invitation for feedback from the audience, encouraging the sharing of different perspectives and experiences. This open-ended closure reflects the dynamic nature of property management and the continuous learning process it entails for landlords at all levels of experience.

Key Takeaways

  • Swift Property Acquisition: Seamus and his wife found and put a property under contract within a day of viewing it, emphasizing the importance of acting quickly in real estate transactions. They were able to insert contingencies for due diligence into the closing agreement, such as investigating the homeowners’ association (HOA).
  • Strategic Tenant Search: They listed their rental on TurboTenant right before closing, opting for a higher rental price to attract tenants with stable incomes and to enhance cash flow prospects. The property’s high-end listing also served as a filter for potential tenants.
  • Effective Screening Process: Implementing a pre-screener for all potential tenants ensured that only serious and qualified individuals were considered, saving time and effort. This tool was pivotal in managing multiple leads and improving the efficiency of the tenant selection process.
  • Consideration of Pets: Initially, pets were not allowed in order to maintain the quality of the hardwood floors. However, there was flexibility in the policy, such that if acceptable leads were not found, the policy on pets could be reconsidered.
  • Initial Tenant Relationship: Taking extra steps, such as upgrading fixtures and providing initial cleaning supplies, facilitated a positive start to the landlord-tenant relationship. Additionally, conducting a thorough move-in inspection with the tenant proved beneficial for setting clear expectations and accountability.

Video Transcript

Krista: Hi, I’m Krista. This is Seamus, and we’re here to help you be a better landlord. So, last episode, we talked about how you found your property, everything that went into assessing that deal. This time, I’d love to learn more about how you found your tenants. Finding the tenant was super easy. Just in terms of a timeline, we found the property on July 3rd, and my wife came across a Zillow listing for it, right? We recognized the face of the real estate agent. We called them that afternoon. We got into the property. Wow, and by the next morning, we had it under contract. All these steps that I’m talking about, we did very, very quickly because, fortunately, the majority of this information is publicly available, or you can write it into the contingency of closing.

Seamus: Yeah, so we looked at the property, and within 16 days, we had closed. Since it was the equivalent of a cash offer, before we even closed, we listed the property on TurboTenant. Because we had all the images, we literally uploaded them. We did the rent-ask estimate calculator. As I said, we settled on what we would ask for rent, and we had it listed. And so by the time we closed and got the keys, we already had a handful of leads that were interested in coming and seeing the property. That process was very, very smooth. One thing that we did do that slowed the process down a little bit, but I would absolutely do again, is we listed it at the high end of the local rent for the area for two reasons.

One, obviously, the more you can get from a rent standpoint, the better the property is going to cash flow. But two, having it on the higher side from a rent perspective also will change some of the applicants you’ll get. We wanted to attract applicants that had a solid source of income, and so that helped a great deal. In fact, because we are very explicit within our property description with our renter criteria, we actually had renters contacting us. They would mention as part of the pre-screener that we do, they would actually mention whether or not they fit our requirements, which is really helpful because they kind of would select themselves out.

Krista: No, and that’s a great way to keep things moving quickly without sacrificing quality. So you mentioned the pre-screener really quickly. Tell me more about that. How valuable was that to you as a landlord moving through all of these leads?

Seamus: Yeah, so you’re doing a lot of things at once as a landlord, especially when you’re purchasing a brand new property. We’re closing on the property. We have leads coming in. Any lead that came in without a pre-screener, first, we would give them a couple of hours to fill it out after they actually submitted the lead form. Then we would just reply to them, thank them for their interest, and give them the link actually to the pre-screener. And so we got a pre-screener from every single person that we did a showing for. We actually made it a requirement. We would say, “Thank you for your interest. Please fill out this form, and then we can schedule a showing afterward,” which was really, really helpful, just to make sure that we were not showing it to people that it wouldn’t be a fit for.

Krista: Sure, no, it’s a great way to qualify the lead and make sure you’re not wasting your time or theirs. So, you mentioned the pre-screener. I’d love to know more about how you use that and if it helped you sort through your leads.

Seamus: Yeah, so we required anyone that we were going to do a showing to first fill out the pre-screener. And so previously, I hadn’t done it with the tenant before. I had given them the form; they just sent it to me. But the act of doing it with them, I really liked, and it let them know how much I was trying to investigate different things to make sure that they weren’t unfairly accused of causing any damage at the time of move-out.

Krista: Yeah, I mean, I feel like that sets up your landlord-tenant relationship really well. It’s another conversation that you guys have, where you’re saying, “Hey, I have a vested interest in you getting your money back at the end of this tenancy.”

Seamus: Exactly. And because we closed faster than I anticipated we would, and we started marketing the property before we had even finished closing, it felt like we were ahead of the game enough that if we had to be a little bit pickier, we could. And that’s the way we thought about the rent price as well. We started out high, knowing that, “Hey, if we don’t fill it by a certain time, we can drop the rent, we can allow pets. There are different things that we can do to sweeten the deal for a tenant.” And one of those levers you could pull is the security deposit. Talk to me a little bit about that. Did you decide to do it as one month’s rent, something else?

Seamus: From a security deposit perspective when we had it posted, we just had it as one month’s rent. And then the tenants that we found actually had co-signers. And when we saw the background and the credit reports of both the tenants as well as their co-signers, we felt very secure from that standpoint. And so we actually reduced the security deposit in that conversation to less than one month’s rent. One thing that I didn’t fully appreciate was the investigation into HOAs. That is one of those underlying expenses that can really flip a good investment, you know, into a break-even investment or even an upside-down investment. That is a big thing that I would encourage everyone to make sure that they’re looking at.

Seamus: And the last thing is just when you’re thinking about prepping a property for someone to move in, just think about those little things as if you were moving into a place. What would you want in there? And I think it’s a really good way to set up a strong relationship, and honestly, as a landlord, it’s very inexpensive and doesn’t take a lot of time.

Krista: I love that. Well, Seamus, this was a blast. Thank you so much for answering all of my questions.

Seamus: You’re welcome. And if anyone has other tips or things that I did to find a tenant that they feel is completely wrong, please let us know in the comments. And don’t forget to subscribe.


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