Tenant Screening Tip #2

Proper tenant screening is the absolute key to a successful rental property. Good tenants take care of the place, pay rent on time, which equals a happy owner. You could have the right property, at the right price, with the right management team, but if you get the wrong tenant, they can quickly turn your property from bliss to misery. In my previous blog post I revealed a tip on how to attract more applicants that will have incentive to be more honest in the application process. In these tenant screening tips blog posts I will not go over the traditional, or conventional methods that 100% have their place and are very important (credit checks, rental verification, employment verification, etc.). What I want to touch on is an unconventional method that serves as a support to all the traditional methods that we use.

Social Media.

That’s right, I use social media to get better insight on prospective tenants. Now how would this be useful or helpful? Let me give you a recent example. We had what looked to be a qualified applicant for a nice home in Gilbert. They had good credit and good jobs and had indicated on their application that they had a “Lab mix” as a dog. On this particular home, the owner was okay with a single pet with her approval. I looked up the people on Facebook and sure enough there were countless photos of their dog on their page. You could tell they loved their dog and she was a big part of their life. The perfect pet owner, right? Here was the problem, the dog was not a “Lab mix” as stated on the application, she was a Pit Bull. This would have posed a huge liability for the owner and their insurance would not have covered an incident with this breed of dog. Of course there are other methods of finding this stuff out like requiring a photo of the pet, inspections, etc. But by spending about 1 minute on social media, I was able to detect a major issue and expose an applicant that was willing to lie to rent this property.

Most of the time social media doesn’t support or expose prospective tenants, and that is fine. But every once and a while it really helps us avoid a a potentially bad situation by identifying a discrepancy in the application that a credit report might not find. If it’s there to use and possibly help in deciding whether or not to rent to someone, then you should use it!

Tenant Screening Tip #1

Attract the best tenants possible all while being ethical.

For the last several years, the Phoenix rental market has been on fire, and even more so of late. If the rental product is quality and priced right, it should rent within a few days. This has given a nice advantage to the investors, and has made life a little more difficult for the renter. The most common method to rent property is to collect applications, along with the application fees, and then select from the pool of applicants. This has given landlords choice, which is a great thing when trying to put the best tenant possible in their rental property.

So what happens to the other applicants? They get declined.

So what happens to their application money? The property management company keeps it.

That doesn’t seem right, does it? Many companies are taking advantage of the hot rental market and using this as a money making scam. Yes, I said scam. The reason so is they will collect applications for a week, full knowing that they will only accept one. This is a disservice to their owner by waiting and possibly losing a good applicant to another property, and the applicants who are waiting in hopes of getting the property who will lose out on time if declined. The reality is if there are a large number of applicants for a particular property, then some qualified applicants are getting declined. I can’t tell you how many times I’ve had a prospective tenant ask “are there a lot of applications on this property?” They ask that because they are sick of, or just cannot afford to lose more application money. In a market like this, properties rent fast and it is very competitive.

I don’t believe in this method. Here is what we do:

I make all application money refundable. Am I leaving money on the table? Of course, but let me explain the payoff. The advantage to this approach is 2 fold:

  1. Applicants will apply without fear of losing their money. This will provide more opportunities to my owner, whom I represent to locate and place the best tenant possible.
  2. There is a caveat to the application money being refundable. The applicant must answer everything 100% truthfully on their application. Tenants don’t want to chance losing their application money, so they open up about everything. This gives me, as the property manager, so much more insight that a credit report might not tell.

Despite these clear cut advantages to making application money refundable, it’s just the right thing to do. I can’t tell you how many applicants have thanked our firm for this practice. Placing the right tenant is part of the foundation to having a successful rental property. This is just one of the many unconventional methods that we deploy to attract and secure the best tenants our market has to offer.