by Umad Javed | Jan 2, 2023 | Landlord
The thought of finding a new tenant is enough to strike fear into the heart of even an experienced landlord.
We all know that a great tenant will pay the rent and take care of the property. This is the tenant that we ALL want.
But, if we don’t have systems in place to find this great tenant, we can just as easily find a bad tenant who won’t pay the rent and who will endanger our finances.
Watch this quick video series to learn how to mitigate your risk when looking for a new tenant.
If you haven’t done so already, please be sure and join my free Facebook Group – Commonsense Landlording. I give away free landlord tips and case studies.
Also look for Parts Two and Three on my Youtube Channel.
by Debbie Vornholt | Dec 8, 2022 | Landlord
How To Find A Great Tenant
Landlords are always looking for a great tenant. The question is, how do you find one?
I was online earlier and someone ask everyone in a group if they have had mostly good paying tenants or mostly bad paying tenants over the years. Of course, the answers were all over the board. Some landlords had mostly great paying tenants, others had mostly bad paying tenants and some were in the middle. Many wondered why that is.
I can tell with absolute certainty that those landlords who have mostly good paying tenants have systems that they use every single time to find their tenants. Systems are the key to running an efficient business, no matter what you do. Without systems, your results will just be a flip of a coin . . . sometimes good, sometimes bad but never predictable.
When I look for a new tenant, I have specific systems that I use. I can tell you that I have mostly good paying tenants.
Have Systems
My systems include:
- Listing system
- Tenant pre-screening
- House showing
- Application process
- Credit screening
- Background check
- Landlord verification
- House visit
I am very thorough and I only deal in facts. Over the years, I have learn the hard way to stick to the system and my rental criteria and not make exceptions. Every single time I helped someone out, gave a second chance, listened to a sad story, etc., I ended up making a bad decision.
These people are not bad people but they do lack the necessary skillsets to keep a job, budget their money and pay their bills on time. I am not taking on a fully grown adult to finish raising and teach them how to manage their money. They either have these skills or they don’t. I look for only the very best tenants and these people have a proven ability to pay not just their rent on time but all of their bills. Again, I have learned that once they fall behind on other bills, it is just a matter of time until they can’t pay the rent.
Because I have these systems and rental criteria, I have very few problems. When I do have an issue, it is because of something that I couldn’t predict. I have a tenant that has been with me coming up on two years and he all of a sudden can’t pay his rent. He told me that he was fired from his job and was too embarrassed to tell me why. This gentleman had been on his job for a little over 5 years and worked for a large, well known company. There is no way to predict this. But, he knew he couldn’t pay and voluntarily moved out.
The easy answer to “How to find a great tenant” is to do your homework. Have systems and rental criteria in place and follow them every single time.
Grab My Pre-Screening System
My pre-screening system is very effective at quickly identifying those people who don’t meet my guidelines. I have put together all of my questions as well as two free training videos. You can grab them here.
by Debbie Vornholt | Nov 22, 2022 | Landlord
Worried About Your Rental Property In The Winter?
Tenants often don’t think about the “common sense” things that need to be done to make sure the property is winter ready. I know better than to trust them to anything without reminding them. I have an email that I send out two or three times a year to all of my tenants reminding them about the important things they need to do to prevent damage to the property.
Feel free to grab my email that I send out here.
by Debbie Vornholt | May 1, 2022 | Landlord
Find A Great Tenant
The number one problem facing most landlords is ‘How to find a great tenant.”
A great tenant pays the rent on time each and every month. You don’t have wonder if or when your tenant will pay.
The reason we all fear renting to a bad tenant is because they are money sucking, time sucking people who drive you to the edge of your sanity! These bad tenants make many landlords hate that they own rental property!
The key to being able to find a great tenant is that before you start looking for a new tenant, remind yourself to be in the right mindset.
GOAL: Do not allow anyone to emotionally manipulate you into making a bad decision.
Bad Tenants Excel At Emotional Manipulation
Bad tenants have an entire tool box of things that they use to convince landlords to give them a second chance. One of the easiest ways to convince a landlord to “take a chance on them” is to make you feel sorry for them. It is actually very easy to do because landlords are people and we have feelings!
These bad tenants use our emotions to emotionally manipulate us and convince us that this time it will be different. This bad tenant just needs to convince a landlord to throw out all of their rental criteria and emotion is the best way tot do that. Once we feel sorry for these people, it is every easy to convince a landlord to do something that they should never do . . . throw our guidelines out the window!
I learned the hard way that systems and rental criteria help keep landlords on track. Following your systems helps you as a landlord sidestep these bad tenants. When you follow your systems, you don’t allow yourself to “take a chance” on these bad actors.
Bad Tenants Lack Certain Skill Sets
Remember, it isn’t your job to save anyone or give anyone a second chance. Your job is to take care of your property and your family. These bad tenants usually lack certain skill sets. They have never learned to keep a job, budget their money and to pay their bills on time. It is not your job to take these people on and teach them how to be great tenants. Most of them also lack the will power to actually live on a budget and behave appropriately.
REPEAT AFTER ME:
- I am only looking for a GREAT tenant.
- I have made the decision to stop renting to bad tenants.
- I will release my feelings of fear, stress, anxiety, dread, (fill in the blank – other feelings) during the process of finding a new tenant.
- I will always remember to put my business and my financial well-being first.
- This is a business.
- I will make every effort to not get on the phone with prospects until they have filled out the pre-screening form.
- It is not my responsibility to give people a second chance if it threatens my business and financial well-being.
- Prospects and applicants who do not meet my guidelines are not bad people.
- These “bad tenants” simply lack the skill sets to be good tenants.
- I do not have to justify my guidelines to anyone.
- I will not feel bad or guilty for putting my business and financial well-being first.
- I will remember the phrase “Company policy requires . . . “ and use it as needed.
- I will not fall in love with or pre-rent to any prospect or applicant until I have properly screened them.
- I will never try to force someone to fit my guidelines.
Landlord Mindset Video Training
I run across landlords every single day who have fallen victim to bad tenants. It is so easy to fall for their stories and agree to take a chance on them! We all know how that ends up!
I put together this video to help every landlord out there be able to easily identify when they are being emotionally manipulated and then learn how to side step these people!
CLICK HERE to watch this FREE video on how to sidestep these bad tenants!
by Debbie Vornholt | Apr 28, 2022 | Landlord
Finding a great tenant is the goal of every landlord but in order to determine if someone has the potential to be a great tenant, reading a credit report is something you have to learn to do.
Unfortunately, landlords find this process to be intimidating. I have seen a lot of different credit reports over the years and I have to agree that some of them are very difficult to look at and interpret. Finding a credit report that you like the look of and using the same credit report every single time makes reading a credit report a lot easier.
The issue that I have been running across a lot lately is that applicants are lying more than they used to. At least that is what I have found.
I pulled out a credit report that I just ran and I am going to talk about it. Obviously I can’t show you the entire report but I will go over the important things to look at. I pulled this one out on purpose because it is a little more complicated than your average situation.
Systems
There are some things that you need to know about me. I use systems for everything I do, including finding a new tenant. I have a pre-screening system that I use. The first thing that happens when someone wants to see a property is that I email them a pre-screening form to fill out. If they meet my guidelines, they get to tour the property and then apply. This allows me to sidestep anyone who tells me up front that they don’t meet my guidelines. I also only deal in facts. It is very easy to get derailed by someone who gets in front of you with a sad story. I don’t allow myself to involve emotions in this process. While I feel terrible for some of these people, I stick to facts!
This applicant first filled out the pre-screening form and appeared to meet the guidelines. He then toured the property, loved it and applied. Everything looked fine after reviewing the application. He had attached a document called “Income verification” and it wouldn’t open. I went ahead and ran credit and asked him to email me the document directly.
Property Details
- 3 bed, 2 bath property.
- Rent is $1,200
- Deposit is $1,200
- 3x the rent is $3,600
Requirements Stated On Application
- Income of 3x the rent.
- At least 12 months on job. Job history can meet this in many cases.
- At least 12 months of rental history. I require this for single family homes.
- Credit score of at least 600.
Information Provided By Applicant On Pre-Screening Form And Application:
- Stated Gross Monthly Income: $4,000
- Stated 2 years on job.
- Stated 2 years of rental history on pre-screening form.
- Stated credit score of 710. Further stated that he had excellent credit.
- Income statement attached but couldn’t open.
His Credit Report
- Credit score 559.
- Total debt: $53,788
- Debt in collections: $52,883
- Mostly student loans.
- Car payment behind 3 months.
Income Statement
- Was actually a letter of intent.
- Training Pay $18.22 per hour and $27.33 per hour OT.
- Once training is complete, promoted to recruiter.
- $865.38 base per week starting week 23.
- $45,000 annually.
ISSUES:
There are several issues with this applicant right off the bat.
- This person stated that he has been on this job for 2 years. That is inaccurate as he has attached a letter of intent dated April 22, 2022. It is April 28, 2022 as of right now. He hasn’t even started his training! Remember, he put that he was on his job for 2 years.
- The “income state” or proof of income is just a letter of intent with no pay stubs.
- The base training at $18.22 per hour is the pay for 13 weeks of the 26 weeks and isn’t income of 3x the rent.
- The credit score is below 600 which is stated in the online listing and the application.
- He has a large amount of student loans and a car payment in collections at this point. He hasn’t paid on the car in 3 months.
- I am also concerned with the large amount of debt in collections =>$42,883
- He doesn’t have any rental history at all. I asked him about it and he said he lived with family while in college.
This is one of those applicants that annoys me. He was very nice and I liked him. But, we started off on the wrong foot when he lied about his job history. Yes, those are strong words but I have a huge problem with any applicants who doesn’t tell the truth right off the bat. I asked him why he put that he had been on his job for 2 years and he said that he had signed a contract with them for 2 years. I told him that I considered this to be a lie since he hadn’t even started his job yet. He said “It was an honest mistake”. I didn’t see it that way. A letter of intent is not job history.
He had also put on the screening report that his credit score was 710 and actually said that he had excellent credit. I called him out on that also. He told me that he had never run his credit before and had just guessed. Someone told him that most landlords don’t run credit so he shouldn’t worry about it. He was shocked when I ran it and he saw how low his credit report was. He said that he intended to start paying on his student loans once he had a job.
He was also untruthful about his rental history. Again, he said he didn’t think that I would check.
I have a serious issue with any applicant who lies and will always disqualify them. They will only get worse as time goes on. The credit score also disqualified him for me because it was just too low. If you don’t believe in having a pass / fail credit score, have a way to mitigate your risk. I will accept down to 575 with an extra deposit and / or a co-signer.
His income is also an issue because in the beginning, he won’t meet the 3x the rent threshold for 13 weeks. Moving is expensive and he will have to put out a lot of money just to get in. Income is something that is always a pass / fail criteria because when you make exceptions, you can harm an applicant or tenant.
Rental Guidelines And Rental Criteria
I have guidelines and I make no apologies for having them and sticking to them. Following my rental guidelines and having rental criteria have saved me from renting to a lot of bad tenants. I don’t like chasing after tenants who don’t pay. Evictions make me angry! It means that I screwed up somehow by renting to a tenant. Bad tenants are usually not bad people but they do lack the skillsets to make them successful tenants.
My message is simple. Stop renting to bad tenants! Have rental guidelines and rental criteria and stick to them every single time. Run credit so that you know what you are getting into!
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