©2007-2009 Chris Compton
When your property is vacant, you don't want to wait to find a tenant. Every day that the property is vacant costs you money in the form of debt service, taxes, HOA dues, insurance, utilities, lawn maintenance and lost revenue. There are lots of steps you can take in order to find a qualified tenant. Here are the most important areas to focus on.
Top Ten Factors in Finding a Tenant
Number 10: Willingness to sell the home at some point in the future.
Well over half of all tenant applicants ask me if the home can be purchased somewhere down the line. They aren't asking for a lease-purchase arrangement, they just want to feel like they have options. None of us can know the future. Circumstances change, plans change, people change. But for right now, the right answer to this question is, "We will definitely consider your offer when the time comes." You haven't made any promises, but you have made them feel hopeful. They will treat the home as if they might own it someday, and that's a good thing. If, on the other hand, you shut the door by saying, "No. We plan to move back in a few years," your property is going to plummet on their list. Even if you think you will definitely move back to the property, keep in mind that you don't really know and leave that door open.
Number 9: Having a Fenced yard
Most renters have families and a high percentage have pets. A fenced in yard is the feature that the most tenant applicants ask for by name when describing what they are looking for. It is more often a want and not a deal breaker, but fenced in yards rent faster than open yards.
Number 8: Appliances
I recently had a client tell me that the tenants would need to provide a stove. That was a first, and he was joking, but appliances are no laughing matter. Tenants don't have appliances. They assume that what they need will be in the house. The better your appliances, the more attractive the home will be. Just assume that your tenants expect a stove/oven, dishwasher, microwave and refrigerator. If you want to stand out, throw in a washer and dryer. As the housing goes up in price, the appliance needs change. In a more expensive rental, tenants may be looking for higher end appliances and double ovens, but they will often have their own refrigerator and will almost always have a washer and dryer. Be flexible. If you have a refrigerator in the house and your applicants already have one, offer to put yours in the garage or remove it entirely. If they have a washer and dryer, take yours away.
Number 7: School District
A large number of renters have children attending school. The school district and its reputation plays a big part in the decision of where to live. You can't change this factor, but you can learn to sell it. Find out about the schools and be ready to explain why the schools are great. No matter how bad they are, each individual school has some outstanding teachers and programs and has probably won some awards and been involved in the community's development. Have that information handy for your prospects.
Number 6: Maintenance
When a prospective tenant looks at your home, they are subconsciously imagining themselves living there. It is of major importance that the home is in good repair. No broken bannisters, no rusted railings, no plumbing leaks or running toilets, no holes in the walls or stained carpet. What they see on that first visit is what they are going to believe as truth about how you will maintain the property. This is your one chance to sell them on your home. Take advantage of it.
Number 5: Cleanliness
Does your house smell clean? Good tenants are not going to move into a dirty, smelly house. If you are showing the home to prospective tenants and it's not clean, you are begging for tenants who don't care how they live. Tenants like that will not maintain the home and they won't be particularly concerned about paying rent, either. Set the example at the very beginning of the relationship. Give them a sparkling clean home and let them know you expect it to remain that way.
Number 4: Vacant and Available
Renters are not the same as buyers. One big difference is time frame. Buyers are expecting to take 45-60 days to obtain a loan, perform inspections, negotiate, etc before moving into a home. It is better when selling a home to have it nicely furnished and looking like a model. Renters, on the other hand, are usually looking for a place to live in the very near future, sometimes they need to move in the very next day. If they visit a home which is occupied, it is hard for them to imagine that you will really be able to move all of that stuff and get the place clean in time to meet their needs. If your house is competing with a similar, but empty house, the empty one is going to win. In addition, if a prospect wants to see the house, you need to show it to them right away. Renters are working on a short time table and if you miss the first opportunity to show them the house, they will probably choose another home.
Number 3: Pet Policy
If you are not going to accept pets, you are cutting down the pool of renters dramatically. If you are unreasonable as to your required pet deposit and whether or not it is refundable, you will lose some of the better prospects. While pets are a concern for homeowners, the majority of pets in rental units will not cause any damage and the enormous majority will not cause damage that cannot be repaired with the standard security deposit. A reasonable pet deposit depends on your area, but think $150-$200 per pet. This deposit should be refundable if there is no damage. Having a portion of it be nonrefundable as a carpet cleaning fee is acceptable to most renters.
Number 2: Price
As in most things, the price plays a major part. If you price yourself out of the market, no amount of marketing can get the house rented. Don't believe me? Think of it this way: If market rent is $1000 per month, what can you do to get a renter to pay $5000 per month? That seems ridiculous, so how about $4000 per month? No chance, right? And you can keep going down until you get pretty close to market rent. Maybe you could get an additional 20%, so $1200 per month if you provided some extra services such as lawn maintenance, allowed pets, made improvements requested by the tenants, provided exceptional appliances and were willing to take a chance on some iffy applicants. What would I do? I would price it at $995 and rent it in a few days instead of a few months.
Number 1: Exposure
If prospective tenants don't know your home is available, they cannot rent it. The internet is the number one source of tenants. Almost all tenants looking for a new rental start online. The key to internet marketing is getting the home listed with a Multiple Listing Service. this is the same service realtors use to market homes for sale. The reason this is so important is that the MLS systems automatically export their listings to all of the major real estate portals. If your home is listed with a MLS, it is immediately on www.Realtor.com, www.ReMax.com, newspaper sites like www.AJC.com and all of the other big sites. Even individual realtors' sites, like mine at www.HomeTeamCoach.com pick up lisitngs automatically from the MLS database. Another advantage of being in the MLS is that a surprisingly high number of renters have agents helping them find their next rental. These agents are trained to look in the MLS as their sole resource and will bring renters to you. There is some cost associated with being listed on the MLS. Call a realtor or property manager for details and realize that different companies may offer you different arrangements. In Atlanta, be sure to call me! In addition to the MLS, you need to post and frequently update an ad on www.CraigsList.com. CraigsList is an internet classified site used nationwide and is often the first place a renter will look. Advertising rental property on CraigsList is free. Other sites like www.Rentals.com and www.Rentclick.com (sister sites) charge a monthly fee for listings and are probably not good investments for individual advertisers. Ads in newspapers worked well back when people read newspapers. Don't spend your resources there.
This top 10 list is critical to finding a new tenant. Make these ten things happen and the applicants will come. What do you do with the applicants? That's a topic for another day. If you have any questions concerning property management, landlord/tenant issues, general real estate concerns or just need the best possible team managing your North Georgia Property, call me personally at 770-682-7735.
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