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:
- 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.
- 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.