09/29/2021
TENANT PLACEMENT (BLOG)
Phenomenal tenants are a rare treat. The most we can reasonably hope for is good tenants. Fortunately, bad tenants are almost as rare.
Good tenants pay their rent and bills on time. They take care of the property as if they owned it, having at least some pride in where they live every day. They take it on themselves to change the furnace filters, clean the carpets at least once a year, and dig out their screwdriver when a door handle is loose.
Bad tenants pay rent late or bounce checks, call for every little thing and probably don’t even own a screwdriver. They’re rude to neighbors and cause nothing but headaches for the landlord.
So how do we find those good tenants? By having minimum qualification standards and not deviating from those standards. Potential applicants are typically pre-screened with a set of questions. If they pass the pre-screening, they are invited to view the property.
Ours hands are somewhat tied when it comes to vetting a potential tenant. As a property manager, we cannot legally reveal negative information if someone calls looking for a reference. Believe it or not, if it got back to the tenant that I said something negative, I could be sued for slander. Pretty much all we can say is whether the tenant paid rent on time, and how long they lived there.
So what’s the point? Why should I waste my time calling references when they can’t tell me anything?
The answer is actually pretty easy. Most people are basically good people, and there’s really nothing bad to say in the first place. But I just listen for certain clues when I’m talking to someone. For example, did the person I’m talking to hesitate before answering the question, or is the parent willing to co-sign for their adult child? Most people will give me basic information, including whether or not the applicant caused any damage or if they got their security deposit back.
In fact, when I give a reference, I’m fairly candid. If it was a bad tenant, I would say “no comment” and let the caller draw his own conclusions.
So we rely on the application: i.e., the credit score, and the job and residence histories. Every member of the household age 18 or over is required to complete the application. Yes, even an adult child who is in college but living at home, must complete an application. All adults must be listed on the lease to be held financially liable. If the parents and adult child move in, and the adult child is not on the lease, what happens if the parents move out? You end up with someone in the property who cannot legally be held liable.
Property managers have minimum credit scores and require sufficient residency history, with current contact information. We may require the two most recent paystubs, or bank statements if they have direct deposit or are self-employed, as well as a valid driver’s license or ID card.
Once they submit the application, phone calls are made to their landlords and supervisors. The goal is to verify that the information on the application is accurate. A good property manager makes the calls because an applicant may make untrue statements.
Other requirements include the first month’s rent in full and a substantial security deposit based on the amount of the rent. This requirement goes a long way in weeding out unqualified applicants.
The next step is determining the move in date and creating the lease. In California, there are a myriad of required disclosures. With all the disclosures, and with my addendums, the total lease tends to be 22-25 pages long. The addendums help protect the homeowner in a state where tenant rights reign supreme.
The lease is reviewed and signed and 50% of the deposit is collected.
In the week or two prior to move in, the property is rekeyed and a detailed move-in walk-through is completed, along with a full set of digital photographs.
Finally, the move-in day arrives. I meet with the tenant and exchange keys for the balance of the move-in funds. Always in the form of a cashier’s check. I explain that the checklist needs to be reviewed and returned within a few days.
If all goes well, the only times we ever hear from that tenant is when they pay their rent every month or once in a great while for a maintenance request.
