Avoid the "Rush to Rent" - Make Your Tenant Selection Decisions Before You Start The Renta
If all you want to do is fill your vacant apartment as fast as possible, almost any process, or no process, will suffice. You take a good look at the applicant, decide whether or not he or she looks acceptable to you, get three recent pay stubs, collect the first and last months' rent, a security deposit, then give him or her the keys to your apartment. This is how many people fill their vacancies when they are in a hurry for cash. This process is like rolling dice - a big gamble at your expense. I call it the "Rush to Rent."
You want to rent to the best candidate, not the most convenient one. You are looking for a person or family who will hopefully occupy your real estate property for many years. Everyone connected with renting the apartment must be on the same page of the playbook. The owner must be committed to taking or allowing the time and spending the money to find a good tenant…even if it takes more than a month or two.
You want a tenant who has enough income to afford to pay the rent on time, and on a regular basis; will respect your property, and who wants to make a long-term commitment to live quietly and obey your rules and the law. To get this type of person or family, you will need to commit to taking the appropriate time interviewing at least three or more applicants, and spending the money necessary to find that person.
The best way to begin the tenant selection process is to make some decisions as to what kind of tenant you want. This will require research on the Federal Fair Housing Laws. You do not want to be held liable for using discrimination practices. Then, you need to set some ground rules for your search. Who will show the apartment? Who will verify information? How many hours a day will you dedicate to renting the apartment?
You and your spouse or significant other need to decide on the methods you intend to use to get the best tenant from a pool of applicants. Will you require a written rental application from each and every applicant? Yes, you should. How do you intend to advertise your vacancy, without telling the world you have an empty apartment to rob? If you are using a management company, you need to have this discussion with the people who will rent your apartments. You need to do all of this before you see anyone about your vacant apartment.
Every time I overlooked a part of my selection process, and accepted a rental applicant without doing a total due diligence, that missing detail always came back to bite me. Fortunately, I am a fast learner. I learned to heighten my eye-for-details skill. By reading this brief article, you will get the benefit of learning from my few unfortunate experiences, as well as my predominantly positive ones.
Owners of multi-family developments, as well as two and three family houses want to have their apartments rented as quickly as possible. This is good business, good fiscal responsibility. Especially after the new construction of an apartment building, it is important to fill it up with tenants fast. The bank wants their mortgage payments monthly, whether or not you have tenants to help pay the rent.
Applicants for new construction properties are processed at least three months in advance of the projected opening of a new building. If the property is a government subsidized or low-income tax credit property, there are additional pieces of verification and certifications required as part of the overall selection method. Getting this information will sometimes cause delays in approving applicants. Anticipate the extra time needed to ensure you are in compliance with government regulations as you process rental applications.
Why do we need to commit to a process? It is because, as human beings with specific natures, we have inherent weaknesses when we work together. Without a process, we are left to our personal prejudices, emotions, lack of experience renting out apartments, intuition, and other decisions that may not be in our best interest.
With a process, you have a road map that helps to keep you on track and assists you to make informed, fact-based decisions. It also gives an applicant the rules of the road. It should not be ambivalent or a secret as to what criteria will help a candidate get selected for an apartment.
Once we decide what criteria we will use to process information on an applicant, everyone involved must stand firm throughout that process. What will an applicant think of us if we violate our own renting process, such as not doing a credit check? Most think that you will do it again in another matter, such as your rent collection policy.
You must be completely committed to a renting process before you are faced with family or colleague peer pressure, sometimes-conflicting information, hard decisions and choices. Plan your selection process in advance, before you have an empty apartment, and avoid the "Rush to Rent.. Planning ahead is always good advice.
Reprinted by Permission. Visit www.synergyprofessionals.com. Veteran and experienced Property Manager and former company owner Carolyn Gibson writes about homeownership, property management, being a tenant, preventive landlording information, and having a property management business. Her book on tenant screening practices, "How to Pick the Best Tenant" as well as her eviction book, "Secrets to a Successful Eviction for Landlords and Rental Managers,", can be found at her web site and Amazon.com. Ms. Gibson also writes articles at http://www.HubPages.com.Article Source: http://EzineArticles.com/331126