With the sales market as slow as it is right now, many sellers are becoming landlords by default because they need to do something to cover their monthly mortgage payment. This has caused a spike in the number of rental properties in many markets. A few weeks ago I blogged about how the Central Florida rental market had softened up quite a bit. It seems like rental amounts have decreased and the quality of prospective tenants has also decreased. I don't like to call some of these prospects the "Dregs of the Earth," but it is Halloween time so something must be going on.
When I first started landlording about 15 years ago, I was fresh out of college and had minimal business experience. Boy was I in for a shock as to how some people lived and acted. Much of what I learned about landlording came by trial and error, but I was fortunate enough to learn about Mr. Landlord.com and I eventually got some decent training from their organization and became a Certified Professional Landlord (CPL).
After being a landlord for a few years I learned that tenants will lie right to your face (or at least conveniently forget about that landlord that evicted them 6 months ago) and will be happy to waste your time and make you jump through hoops. I learned that you need to develop a system to deal with tenants. Once I created a system, I was able to screen out (at least most of the time) the troublemakers and get back a lot of my wasted time.
The first part of my screening system is to make sure the prospective tenant is truly interested in the property. So I always make sure the tenant has at least driven by the property before I will meet with them. The only exception to this rule is that if I am already planning on being at the property (to meet contractors, make repairs, meet other prospects, etc.) then I will meet them without first making them drive by. Half the people that I ask to drive by, I never hear from again. The ones that call back to make an appointment to see inside have already screened themselves a bit by doing a drive by and still liking the property. I also inform them on the phone that I require that they fill out a detailed rental application so that I can do a thorough background check.
If they still want to see inside, I set an appointment to meet with them. I find it absolutely amazing that someone will make an appointment with you (sometimes only an hour prior to a meeting) and then not show up. This was absolutely frustrating to me. So now I never schedule an appointment to show a rental unless I am showing it that day. If they call me on Tuesday and want to schedule an appointment for Thursday evening, I tell them to call me on Thursday afternoon and we can set up a time. Otherwise, the odds of them showing up at all are very slim indeed.
When I meet them at the property, I try to do some more preliminary screening. I always offer everyone a Rental Application so as not to act discriminatory. My rental application has strong wording on it, and I like to point that out to the prospective tenant. I want to know who this person is, that they aren't going to be making trouble for me, and that they are going to be paying me the rent in a timely manner. So I screen heavily and let them know that.
I will go into detail on how I screen applicants in Part 2 of this article.
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Rob Arnold, ABR, CPL, GRI, Full service and investor friendly Realtor, Managing real estate broker, Licensed mortgage broker, Notary Public
407-389-7318 http://www.sdrhouses.com/ http://www.webuyhousesflorida.com/
Sellers are becoming landlords by default here too. Luckily our rents are rising in a huge way! Quality of tenants have always been a little lackluster but lately I have put some pretty good tenants into rental homes.