Author Topic: Am I turning off potential renters? Why don't they apply?  (Read 3396 times)

rentalnewbie

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Am I turning off potential renters? Why don't they apply?
« on: August 08, 2019, 07:41:03 AM »
Weíre trying to rent our second property and I have had good traffic but canít seem to seal the deal with anyone Ė no one has applied, though several people told me they wanted to both in person or via email after the showing. Now, saying it at the showing, maybe you are just being polite but why email me afterwards to say you want to apply and then go silent for 3-4 days? Several people have also told my unit is the cleanest they have seen, or nicest in the neighborhood. Again, maybe they are just being polite but it makes me think the house is showing well.

I have reduced the price (started at 1250, then 1200, yesterday went to 1175) and itís now $75 cheaper than the unit next door and best price of those listed in the development (based on the photos mine is also as nice or nicer). I allow pets with relatively low fees and my application fee is $40 for credit and background check. Yesterday I also changed my listing to allow for a 6 month lease rather than 12 months.

I am wondering if I am doing or saying something that is off putting? How do you close the deal? Other than continuing to reduce the price, is there anything else I can do?

More background:
My husband and I used to live in this property but recently moved. This property is in an area with lots of rentals but we missed the season somewhat because we had leased it, but they broke their lease and moved out after 6 weeks. At the lower rental price, we are approaching break-even territory when including maintenance + PITI + management time. We could clear about 50-60k if we sold it, after fees based on current prices and since we lived there, wouldnít have to pay cap gains taxes. However, itís also coming up on the slow selling season now so I would like to have it leased at least 6 months so we can sell in the prime season; I regret not selling this spring when we moved out but it seemed worth a try to hold it since we already owned it. Live and learn!

Chickadee

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #1 on: August 08, 2019, 08:35:23 AM »
I would say sell. You just need one buyer.
A bird in hand.. one in bush.

To me 50 - 60 k ahead sounds like a good deal especially since there may a psychological cost. By which I mean it rightfully concerns you enough to worry why it is not being scooped up on rental.
I am also seeing sale prices dip in HCOL areas a bit this summer. Anyone care to chime in on that? Maybe it is just where I am looking but I see reasonable deals go fast but the market seems cooler on the "just good enough for right person prices".

rentalnewbie

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #2 on: August 08, 2019, 09:31:20 AM »
I would say sell. You just need one buyer.
A bird in hand.. one in bush.

To me 50 - 60 k ahead sounds like a good deal especially since there may a psychological cost. By which I mean it rightfully concerns you enough to worry why it is not being scooped up on rental.
I am also seeing sale prices dip in HCOL areas a bit this summer. Anyone care to chime in on that? Maybe it is just where I am looking but I see reasonable deals go fast but the market seems cooler on the "just good enough for right person prices".

Our market was red-hot this spring (though rumblings of a slow down abound everywhere) but we decided to buy anyway because it was a good time for us, emotional reasons. 60k would almost pay off our first rental, we owe about 70k on it or we could keep the money an reinvest if/when a slow-down happens.

Chickadee

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #3 on: August 08, 2019, 10:10:31 AM »
I understand totally.
Sometimes itís just a good personal time to buy.

I live in the sticks just outside (1 h) south central Fl and here the market is starting to stop the crazy rise we have seen since 2016. Itís also because we have a flux of younger people in south Florida and rental demand is higher than purchase demand. People are willing to pay to work and play downtown... where a nearly  800-850k condo can go for 4500$ per month to usually dual income couples .. yikes
Yep I donít think most there are saving !

Bobberth

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #4 on: August 13, 2019, 04:04:51 PM »
That's how rentals go sometime. Sometimes I like it when people don't apply because it means I scared off the bad apples by telling them my screening process :-)

I've noticed, in my market anyway, not only is there a season for renters, there is a pattern during the month as well. Most decent people will be looking 3-4 weeks out from their move in date. After about the 10th of the month, tenant quality starts to go down as the best tenants have already found a place. Also around the 10th of the month eviction notices start to arrive and a new group of tenants hit the market (big jump in calls and people who show up). 5-10 days left in the month, rarely is it worth it to show a property as there are a lot of leftovers and undesirables, although you may be able to find a couple of responsible people looking more than a month out so they can give 30 days notice. 1-5 days before the end of the month you start getting the better tenants coming back on the market. My current vacancy has taken so long that I'm not planning on having it rented Sept 1 because of this trend. Maybe I will get lucky when it hits the market in the next couple of days but I'm not planning on it. Your market may have different timing and maybe you just hit a lull?

diapasoun

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #5 on: August 13, 2019, 04:34:15 PM »
That's how rentals go sometime. Sometimes I like it when people don't apply because it means I scared off the bad apples by telling them my screening process :-)

I've noticed, in my market anyway, not only is there a season for renters, there is a pattern during the month as well. Most decent people will be looking 3-4 weeks out from their move in date. After about the 10th of the month, tenant quality starts to go down as the best tenants have already found a place. Also around the 10th of the month eviction notices start to arrive and a new group of tenants hit the market (big jump in calls and people who show up). 5-10 days left in the month, rarely is it worth it to show a property as there are a lot of leftovers and undesirables, although you may be able to find a couple of responsible people looking more than a month out so they can give 30 days notice. 1-5 days before the end of the month you start getting the better tenants coming back on the market. My current vacancy has taken so long that I'm not planning on having it rented Sept 1 because of this trend. Maybe I will get lucky when it hits the market in the next couple of days but I'm not planning on it. Your market may have different timing and maybe you just hit a lull?

I'm a renter and this is similar to the patterns I see around here in rentals as well -- the only people who are looking after the 10th are typically looking 6 weeks plus in advance.

Application fees can be a big turn off for a lot of renters, especially if you're in a hot market and may be applying to multiple places. I personally volunteer to supply my credit report and some paystubs (and if someone mentions a fee, will see if they waive it in favor of my self-supplied info). Some landlords are fine with that, some not. If you want to keep the rental, I'd actually up the price back to whatever you started with and see if you can do better with "please supply [credit report, paystubs, whatever you need to feel sure] with application" instead of the fee.

Landlording is totes a hassle, though, so do what is best for you in the end both financially *and* quality-of-life-wise.

Seadog

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #6 on: August 14, 2019, 08:28:20 PM »
That's how rentals go sometime. Sometimes I like it when people don't apply because it means I scared off the bad apples by telling them my screening process :-)

You're likely turning off all the superstar renters too. Top of the line renters don't want to jump through hoops. Just like 1%er employees in whatever field aren't going to bother fellow C-level executives at their current company before even interviewing for a job because you demanded references up front. They will simply tell you to go to hell. On the topic of references for example, someone may not have references because they are a bad renter, or because they've only owned homes before, or as in my case work would either generally supply a place, or show me a few and let me pick one to rent, while someone else took case of the details. If you're a stickler for references, you'll turn off both sets.

Now, to play my own devils advocate, it could be stated that what's to be gained from having a superstar renter over an average renter, pails in comparison with what could be lost over having a loser renter over an average one, so in that case it may be worth it. ie the cost of a false positive could be 10k, the foregone benefit of a false negative could be $500. 

I'm a renter and this is similar to the patterns I see around here in rentals as well -- the only people who are looking after the 10th are typically looking 6 weeks plus in advance.

Application fees can be a big turn off for a lot of renters, especially if you're in a hot market and may be applying to multiple places. I personally volunteer to supply my credit report and some paystubs (and if someone mentions a fee, will see if they waive it in favor of my self-supplied info). Some landlords are fine with that, some not. If you want to keep the rental, I'd actually up the price back to whatever you started with and see if you can do better with "please supply [credit report, paystubs, whatever you need to feel sure] with application" instead of the fee.

Landlording is totes a hassle, though, so do what is best for you in the end both financially *and* quality-of-life-wise.

I would never rent a place with an application fee. This is a business relationship. It's like a job interviewer asking me to pay for my own flight to the interview. I'm investing my time into seeing if this is a good relationship, and if you're not going to extend the same courtesy of investing $40, which is entirely to you're own benefit and for you're own peace of mind because you're incorrectly doubting my finances or credit, then you're already starting things an a very off-putting foot. If you're this much of a pain in what's supposed to be the honeymoon stage, what's it going to be a year from now?

Finally, if you want more applicants, the easiest way is to lower the rent. In addition to more applicants, you're going to get far better ones. A house in a sense is a bond. I sell you a bond with a face value of your house. The coupon rate is the rent. If I'm a AAA high quality renter, I can demand very low rates for my bonds. If I've defaulted twice before and am a D level renter, then my rates will be way higher.   

Megma

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #7 on: August 15, 2019, 02:12:28 PM »
That's how rentals go sometime. Sometimes I like it when people don't apply because it means I scared off the bad apples by telling them my screening process :-)

You're likely turning off all the superstar renters too. Top of the line renters don't want to jump through hoops. Just like 1%er employees in whatever field aren't going to bother fellow C-level executives at their current company before even interviewing for a job because you demanded references up front. They will simply tell you to go to hell. On the topic of references for example, someone may not have references because they are a bad renter, or because they've only owned homes before, or as in my case work would either generally supply a place, or show me a few and let me pick one to rent, while someone else took case of the details. If you're a stickler for references, you'll turn off both sets.

Now, to play my own devils advocate, it could be stated that what's to be gained from having a superstar renter over an average renter, pails in comparison with what could be lost over having a loser renter over an average one, so in that case it may be worth it. ie the cost of a false positive could be 10k, the foregone benefit of a false negative could be $500. 

I'm a renter and this is similar to the patterns I see around here in rentals as well -- the only people who are looking after the 10th are typically looking 6 weeks plus in advance.

Application fees can be a big turn off for a lot of renters, especially if you're in a hot market and may be applying to multiple places. I personally volunteer to supply my credit report and some paystubs (and if someone mentions a fee, will see if they waive it in favor of my self-supplied info). Some landlords are fine with that, some not. If you want to keep the rental, I'd actually up the price back to whatever you started with and see if you can do better with "please supply [credit report, paystubs, whatever you need to feel sure] with application" instead of the fee.

Landlording is totes a hassle, though, so do what is best for you in the end both financially *and* quality-of-life-wise.

I would never rent a place with an application fee. This is a business relationship. It's like a job interviewer asking me to pay for my own flight to the interview. I'm investing my time into seeing if this is a good relationship, and if you're not going to extend the same courtesy of investing $40, which is entirely to you're own benefit and for you're own peace of mind because you're incorrectly doubting my finances or credit, then you're already starting things an a very off-putting foot. If you're this much of a pain in what's supposed to be the honeymoon stage, what's it going to be a year from now?

Finally, if you want more applicants, the easiest way is to lower the rent. In addition to more applicants, you're going to get far better ones. A house in a sense is a bond. I sell you a bond with a face value of your house. The coupon rate is the rent. If I'm a AAA high quality renter, I can demand very low rates for my bonds. If I've defaulted twice before and am a D level renter, then my rates will be way higher.

Seadog, you make some interesting points but if you tried to say you didn't want to pay the app fee, well you can keep looking. The best offer I would ever make would be to apply the app fee to the first month's rent if you were approved and leased the house. I would absolutely never waive it or not want to see your report and a report from my service, not one you bring me.

90% of potential renters are "tire kickers" and they want to see multiple places before committing. If let people apply without paying a dime, I'd be fronting the applications of easily 10-15 people a week. A reasonable application fee is necessary to know who is serious and who is just shopping around.

Wrenchturner

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #8 on: August 16, 2019, 01:15:47 PM »
Why would you assume someone shopping around isn't serious?  Maybe they'd like to screen where they want to live...

Of course if you live in a landlord's market, you can dictate terms as you see fit. 

I would never pay an application fee but I don't live in a landlord's market.

therethere

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #9 on: August 16, 2019, 01:46:10 PM »
Around here you'd be on the streets if you wouldn't pay a credit check fee. Call me crazy but I wouldn't trust a landlord who didn't charge application fees.

The only landlord I had that didn't charge fees turned out to be broke AF. She needed it rented ASAP in order to pay the mortgage so didn't bother with references or credit checks. I thought she would be an easy, relatable landlord. One month later the unit went up for short sale because she rented it for less than the mortgage + HOA. After 11 months of it being on the market our lease ran out and we found she spent our entire security deposit on repairs during the lease. I'd question any landlord that isn't following general protocol because I want a landlord who knows what they are doing and takes it seriously. I don't want a newbie or someone who is a landlord by default.
« Last Edit: August 16, 2019, 03:02:50 PM by therethere »

Wrenchturner

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #10 on: August 16, 2019, 02:55:10 PM »
Fair enough, I guess it's regional.  I've never heard of anyone paying fees to apply around here, so that is the protocol here.  I'm not seeing how paying that fee ensures a good landlord though.

therethere

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #11 on: August 16, 2019, 03:02:07 PM »
Fair enough, I guess it's regional.  I've never heard of anyone paying fees to apply around here, so that is the protocol here.  I'm not seeing how paying that fee ensures a good landlord though.

To me it shows they take their job and assets seriously. If a landlord is willing to let anyone in that shows they don't really care about their property too much. I wouldn't trust that they will keep it in good condition. That doesn't mean ones that do a credit check will keep it in good condition. It's just a way to weed out landlords for me.
« Last Edit: August 16, 2019, 03:07:59 PM by therethere »

mozar

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #12 on: August 16, 2019, 03:36:58 PM »
Another perspective here. I say in my ad that a credit check is required but I don't always follow through. I find that saying that scares off enough people. I also don't have an app fee. I used to do all kinds of things to screen tenants. I kept getting terrible ones. So I changed my strategy. I increased my rent above market value. People come in and already think it must be nice. It takes a little longer to get a tenant but its totally worth it.

Seadog

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #13 on: August 16, 2019, 10:32:44 PM »

Seadog, you make some interesting points but if you tried to say you didn't want to pay the app fee, well you can keep looking. The best offer I would ever make would be to apply the app fee to the first month's rent if you were approved and leased the house. I would absolutely never waive it or not want to see your report and a report from my service, not one you bring me.

90% of potential renters are "tire kickers" and they want to see multiple places before committing. If let people apply without paying a dime, I'd be fronting the applications of easily 10-15 people a week. A reasonable application fee is necessary to know who is serious and who is just shopping around.

I'm not sure what you mean by tire kickers. Are they willing to rent it or not? Do you mean you have 15 people come by in a week, all of whom say they're ready to take it and give you a deposit + first/last whatever, and you're saying they're *all* bums? Or you have 15 people who want to see it without committing, well if they're not willing to commit by giving you money, then are they serious in the first place? I mean I don't see how someone paying $40 to "apply" weeds out unserious people if the rest are willing to give you $5000 for first/last/dd that day?

I feel generally you can get a decent feel for people once you spend an hour with them showing them your property, so you get 15 people in a week willing to take it, you tell the best sounding one it's yours if you want it, and then you'd have to run only 1 credit check. I'd have absolutely no problem signing whatever form to authorize you to pull credit, but forcing me to pay up front seems like a heads you win, tails I lose situation. So I pay, you pull my credit and find it's in the 95% percentile. Then you tell me "sorry, I was hoping for someone in the 98th" I've then wasted money because you were unreasonable. And, ultimately that's why I feel the LL should bear the cost. This is something that's being done entirely for *their* benefit to appease their concern and skepticism. Would you similarly pay me $40 so I can run a check on you? It seems like the underlying assumption here is that the LL is more fiscally responsible than the tenant, which as therethere pointed out isn't always the case. I've lived in places where the water got shut off, collections came to the door looking for the home owner, cable got cancelled multiple times. Had I run a credit check on him I'm sure it would not have come back sparkling. Do I really want to a rent a room in a place that's going to be in the midst of foreclosure in 3 months? How do I allay that concern?

Seadog

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #14 on: August 16, 2019, 10:48:37 PM »
Fair enough, I guess it's regional.  I've never heard of anyone paying fees to apply around here, so that is the protocol here.  I'm not seeing how paying that fee ensures a good landlord though.

To me it shows they take their job and assets seriously. If a landlord is willing to let anyone in that shows they don't really care about their property too much. I wouldn't trust that they will keep it in good condition. That doesn't mean ones that do a credit check will keep it in good condition. It's just a way to weed out landlords for me.

Would you pay an application fee to apply for a job? After all, if they'll let any smooth talking bum who has a solid degree, relevant work experience, great interview skills and exceptional references in, how can you trust that they even take their business or assets seriously? Maybe this guy just wants a free trip across the country and to spend a night in a hotel. Forcing people to pay just for the privilege of just a chance to work at your shop will certainly limit the number of people who are applying to multiple companies. Especially those garbage companies that let people in the door to interview for free.

I think there are many parallels here. Good company/rentals want good employees/tenants, and vice versa. What's to be gained by putting road blocks in the way of the superstars? The first hour or so meeting is you get a feel for each other. The interview. If everything *seems* above board and you're a good fit for each other, then you can perform the perfunctory credit or reference or degree checks. By that point however, unless they were master manipulators 95 times out of 100 it's merely a motion to go through to ensure they're not 1 of those 5 in 100.

jpdx

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #15 on: August 17, 2019, 12:08:28 AM »
I think $40 is high for the application fee. $25 is what I've always paid as a renter. I also think offering to apply the fee towards the rent is a smart strategy and seems fair.

dragoncar

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #16 on: August 17, 2019, 12:35:59 AM »
That's how rentals go sometime. Sometimes I like it when people don't apply because it means I scared off the bad apples by telling them my screening process :-)

You're likely turning off all the superstar renters too. Top of the line renters don't want to jump through hoops. Just like 1%er employees in whatever field aren't going to bother fellow C-level executives at their current company before even interviewing for a job because you demanded references up front. They will simply tell you to go to hell. On the topic of references for example, someone may not have references because they are a bad renter, or because they've only owned homes before, or as in my case work would either generally supply a place, or show me a few and let me pick one to rent, while someone else took case of the details. If you're a stickler for references, you'll turn off both sets.

Now, to play my own devils advocate, it could be stated that what's to be gained from having a superstar renter over an average renter, pails in comparison with what could be lost over having a loser renter over an average one, so in that case it may be worth it. ie the cost of a false positive could be 10k, the foregone benefit of a false negative could be $500. 

I'm a renter and this is similar to the patterns I see around here in rentals as well -- the only people who are looking after the 10th are typically looking 6 weeks plus in advance.

Application fees can be a big turn off for a lot of renters, especially if you're in a hot market and may be applying to multiple places. I personally volunteer to supply my credit report and some paystubs (and if someone mentions a fee, will see if they waive it in favor of my self-supplied info). Some landlords are fine with that, some not. If you want to keep the rental, I'd actually up the price back to whatever you started with and see if you can do better with "please supply [credit report, paystubs, whatever you need to feel sure] with application" instead of the fee.

Landlording is totes a hassle, though, so do what is best for you in the end both financially *and* quality-of-life-wise.

I would never rent a place with an application fee. This is a business relationship. It's like a job interviewer asking me to pay for my own flight to the interview. I'm investing my time into seeing if this is a good relationship, and if you're not going to extend the same courtesy of investing $40, which is entirely to you're own benefit and for you're own peace of mind because you're incorrectly doubting my finances or credit, then you're already starting things an a very off-putting foot. If you're this much of a pain in what's supposed to be the honeymoon stage, what's it going to be a year from now?

Finally, if you want more applicants, the easiest way is to lower the rent. In addition to more applicants, you're going to get far better ones. A house in a sense is a bond. I sell you a bond with a face value of your house. The coupon rate is the rent. If I'm a AAA high quality renter, I can demand very low rates for my bonds. If I've defaulted twice before and am a D level renter, then my rates will be way higher.

Seadog, you make some interesting points but if you tried to say you didn't want to pay the app fee, well you can keep looking. The best offer I would ever make would be to apply the app fee to the first month's rent if you were approved and leased the house. I would absolutely never waive it or not want to see your report and a report from my service, not one you bring me.

90% of potential renters are "tire kickers" and they want to see multiple places before committing. If let people apply without paying a dime, I'd be fronting the applications of easily 10-15 people a week. A reasonable application fee is necessary to know who is serious and who is just shopping around.

Yeah I don't think I'd pay an application fee either, unless it was somehow an extremely good deal and I was guaranteed to get the place.  This could be what's turning off applicants if that's the only new information they have between the showing and the followup email.

To me, it just seems like a great scam for a place to get a few dozen "application fees" and never have to rent the place out.  Would you pay a tentative renter a background fee so they can run YOUR credit report to make sure you can pay the mortgage and maintenance costs?

If you are worried about tire kickers, sign a lease contingent on them passing your background check. 

Seadog

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #17 on: August 17, 2019, 06:53:12 AM »
Fair enough, I guess it's regional.  I've never heard of anyone paying fees to apply around here, so that is the protocol here.  I'm not seeing how paying that fee ensures a good landlord though.

I was thinking about this, and may need to recant a hair, as I think yes it must be regional, and one of those things where largely everyone has to be on the same page, and the entire market somehow decides, perhaps almost by random chance how it's going to go, then it becomes a self reinforcing loop, because by not doing what everyone else is doing will make you stand out in not a good way.

For instance, in NS/Ontario/Alberta/BC, I can probably count on one hand the number of times I've seen application fees mentioned. Because so few people charge them, charging one would put you at a significant disadvantage, as like I, and several others have said who've grown up in these environments at first mention of a fee we'd walk. 

In Texas, I would say over half the places charged them, and they were generally the higher end ones. Mind you, where I lived there was a ton of vagrancy and illegals, so that may have been part of the issue. Instead of an application fee turning off potential people, not having one would attract the vagrants. I still refused to pay one though on principle, and rented a room from a coworker. 

I also recently visited a friend in London. There he said rental ads like you see on kijiji generally don't exist for nice places. Instead, it all goes through an agency, which simply don't exist here or in the US from what I've seen. Literally on every block you have a show room with a glass display showing 40 or so places to "let". You sign on with an agency, he said it's several hundred pounds for them to run all the checks, and they almost act as like an escrow between the renter and owner to try and protect both sets of interests. He said on both counts, they only places or people who don't go through agencies, are in the bottom quartile of each. Frustrated the hell out of him coming from here, but again that's the system, and one person has about as much power to change it as they do the government. 

Wrenchturner

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #18 on: August 17, 2019, 08:13:26 AM »
Fair enough, I guess it's regional.  I've never heard of anyone paying fees to apply around here, so that is the protocol here.  I'm not seeing how paying that fee ensures a good landlord though.

I was thinking about this, and may need to recant a hair, as I think yes it must be regional, and one of those things where largely everyone has to be on the same page, and the entire market somehow decides, perhaps almost by random chance how it's going to go, then it becomes a self reinforcing loop, because by not doing what everyone else is doing will make you stand out in not a good way.

For instance, in NS/Ontario/Alberta/BC, I can probably count on one hand the number of times I've seen application fees mentioned. Because so few people charge them, charging one would put you at a significant disadvantage, as like I, and several others have said who've grown up in these environments at first mention of a fee we'd walk. 

In Texas, I would say over half the places charged them, and they were generally the higher end ones. Mind you, where I lived there was a ton of vagrancy and illegals, so that may have been part of the issue. Instead of an application fee turning off potential people, not having one would attract the vagrants. I still refused to pay one though on principle, and rented a room from a coworker. 

I also recently visited a friend in London. There he said rental ads like you see on kijiji generally don't exist for nice places. Instead, it all goes through an agency, which simply don't exist here or in the US from what I've seen. Literally on every block you have a show room with a glass display showing 40 or so places to "let". You sign on with an agency, he said it's several hundred pounds for them to run all the checks, and they almost act as like an escrow between the renter and owner to try and protect both sets of interests. He said on both counts, they only places or people who don't go through agencies, are in the bottom quartile of each. Frustrated the hell out of him coming from here, but again that's the system, and one person has about as much power to change it as they do the government.
Exactly what I'm thinking.  An application fee is going to screen out those that might try to swing a deal with a sob story, or some other shenanigans.  As we all know, there are people out there that will sink time into something if there's no overt opportunity cost and a dream of swinging a deal.  It's the mindset of a scammer, only takes one win after dozens of attempts to possibly break even or make a profit.  Not that all those people are scammers mind you.  But a highly competitive rental market would drive this im sure.

To contribute to the original post, you're probably missing something in the market.  It could be the fee, it could be the rent price, it could be seasonality.   Or maybe there's a pile of nicer rentals available. Or maybe it's just fluke; it'll take a few weeks or months to know if it's a trend.

Fishingmn

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #19 on: August 18, 2019, 01:26:16 PM »
You are setting yourself up for failure if you don't do a background check. Here's my process -

- Post vacancy 45-60 days before available. Better tenants plan ahead. Worse tenants need place at the last minute
- Research rents on Hotpads, Craigslist and Rentometer. Charge at or just below going rate
- Advertise on Postlets (to get on real estate sites) and Craigslist. Postlets is part of Zillow - I find best prospects there. Could try Facebook Marketplace too. All free
- Make people call you to schedule an appointment. You want to screen them over the phone first. Ask about move in date, income requirements (I use 3x income to rent), who's living there (to understand their situation and to know who needs to be screened), pets and smoking. Ideally you are getting people to screen themselves out if they won't qualify so they don't waste your time.
- When you schedule a showing make sure they call or text you to reconfirm 1-2 hours before the showing. No need to drive over there if they aren't going to be there. This also is a great tool to understand who is responsible enough to remember to reconfirm.
- Ask if they want application at the showing. Include a document of your approval process and what parameters could get them rejected.
- Once they apply do pre-screening to verify employment, income and call previous landlords. I also do internet searches on social media to try and verify as much as possible. If you can't verify employment/income then ask for pay stubs or W2
- If they pass those then do the background check. I use mysmartmove.com which checks criminal, credit and eviction history. Tenant puts in credit card ($40) so I don't touch the money. Sends immediate results.

Having a detailed process is your best opportunity to get good tenants. I don't care if they are top 1%. I just want people who pay on time and don't damage my property or disturb others. 10 properties and I've never had to do an eviction in 8 years using this system.

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #20 on: August 18, 2019, 02:59:29 PM »
You are setting yourself up for failure if you don't do a background check. Here's my process -

- Post vacancy 45-60 days before available. Better tenants plan ahead. Worse tenants need place at the last minute
- Research rents on Hotpads, Craigslist and Rentometer. Charge at or just below going rate
- Advertise on Postlets (to get on real estate sites) and Craigslist. Postlets is part of Zillow - I find best prospects there. Could try Facebook Marketplace too. All free
- Make people call you to schedule an appointment. You want to screen them over the phone first. Ask about move in date, income requirements (I use 3x income to rent), who's living there (to understand their situation and to know who needs to be screened), pets and smoking. Ideally you are getting people to screen themselves out if they won't qualify so they don't waste your time.
- When you schedule a showing make sure they call or text you to reconfirm 1-2 hours before the showing. No need to drive over there if they aren't going to be there. This also is a great tool to understand who is responsible enough to remember to reconfirm.
- Ask if they want application at the showing. Include a document of your approval process and what parameters could get them rejected.
- Once they apply do pre-screening to verify employment, income and call previous landlords. I also do internet searches on social media to try and verify as much as possible. If you can't verify employment/income then ask for pay stubs or W2
- If they pass those then do the background check. I use mysmartmove.com which checks criminal, credit and eviction history. Tenant puts in credit card ($40) so I don't touch the money. Sends immediate results.

Having a detailed process is your best opportunity to get good tenants. I don't care if they are top 1%. I just want people who pay on time and don't damage my property or disturb others. 10 properties and I've never had to do an eviction in 8 years using this system.

All of this, except Craigslist.  We just don't do Craigslist.  Too many scammers and otherwise dodgy people.  We also check the local court records in Arizona.  The commercial services don't generally pick up the municipal court cases or the family law issues, especially evasion of child support. 

ender

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #21 on: August 18, 2019, 03:06:55 PM »
For instance, in NS/Ontario/Alberta/BC, I can probably count on one hand the number of times I've seen application fees mentioned. Because so few people charge them, charging one would put you at a significant disadvantage, as like I, and several others have said who've grown up in these environments at first mention of a fee we'd walk. 


+1

My experience and background is no app fees. They seem kind of silly to me, honestly, literally paying for the privilege of paying you more money? Meh.

That being said, I am also someone who would is on the higher end of quality tenant soooo meh. If there are places without app fees and people want to charge one, I'm not going to pay any app fee. You'd have to have a really compelling reason for me to do that.

Zamboni

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #22 on: August 18, 2019, 03:48:47 PM »
I'm going to offer a middle ground, compromise position on the application fee issue:

The last place I rented (which was 10 years ago, admittedly), had an application fee listed on their boilerplate information sheet. We had been chatting and looking at the place prior to getting down to the nitty gritty details like fees. So, as they handed the sheet to me once I said I was interested in renting, they told me that of course they would waive the $50 application fee listed on the sheet since I worked for a "preferred employer". I did work for one of the bigger employers in the area. In fact, not only would they waive the application fee, but they would cut the amount of the required deposit in half. She took her pen and crossed out the application fee and crossed out the deposit amount and wrote half the number next to it. I had to provide the past month's paystub, and still had to pass their credit/background check, but there was not a fee in my case.

They managed to make me feel special by waiving the fee and reducing the deposit. I kind of think this is an ideal strategy if you sense that you really do have a highly qualified renter in your presence. It could be illegal somehow, though, as it might lead to discrimination based upon other factors  . . .  be sure to know your local laws.

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #23 on: August 18, 2019, 04:39:13 PM »
When we were looking to rent in a hot housing market application fees were not unheard of. We were the perfect renters: dual-income professionals, no kids or pets, homeowners. I put together a packet with our latest credit scores, a generic rental allocation form filled out, and copies of our latest pay stubs. I had several copies of those packets that I would just drop off with the landlord of any place we were interested in. Thankfully everyone seemed okay with it.
I would have been put off with having to fill out separate forms or pay extra to confirm the info that I had already pulled together, so you could make an exception if potential renters can provide a similar packet of info proving financial worthiness.

powskier

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #24 on: August 18, 2019, 11:35:56 PM »
Fair enough, I guess it's regional.  I've never heard of anyone paying fees to apply around here, so that is the protocol here.  I'm not seeing how paying that fee ensures a good landlord though.
Regional for sure. There are plenty of s#itty landlords who charge application fees and plenty of good ones who don't, and vice versa.

I've watched perfect on paper people have their lives fall apart and go from stellar to crappy tenants and seen the opposite.

If everything about the property is great and the market is great maybe you are putting off a certain vibe? Fear not,  I'm not judging that over the internet, no trying to poke you in the eye and start a forum fight :)  but just saying that is something that can turn off folks.  We are all usually unaware of how we may be perceived.

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #25 on: August 19, 2019, 03:59:53 PM »
The best offer I would ever make would be to apply the app fee to the first month's rent if you were approved and leased the house.

Every application I've personally dealt with as a renter, and
I've been on both sides of the fence -- has applied the fee toward
my rent payment upon application approval.  Not directed to OP, but
I wouldn't consider any other arrangement, since I'm essentially
taking the upfront risk of lease approval.

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MsPeacock

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #28 on: August 22, 2019, 03:27:45 PM »
You are setting yourself up for failure if you don't do a background check. Here's my process -

- Post vacancy 45-60 days before available. Better tenants plan ahead. Worse tenants need place at the last minute
- Research rents on Hotpads, Craigslist and Rentometer. Charge at or just below going rate
- Advertise on Postlets (to get on real estate sites) and Craigslist. Postlets is part of Zillow - I find best prospects there. Could try Facebook Marketplace too. All free
- Make people call you to schedule an appointment. You want to screen them over the phone first. Ask about move in date, income requirements (I use 3x income to rent), who's living there (to understand their situation and to know who needs to be screened), pets and smoking. Ideally you are getting people to screen themselves out if they won't qualify so they don't waste your time.
- When you schedule a showing make sure they call or text you to reconfirm 1-2 hours before the showing. No need to drive over there if they aren't going to be there. This also is a great tool to understand who is responsible enough to remember to reconfirm.
- Ask if they want application at the showing. Include a document of your approval process and what parameters could get them rejected.
- Once they apply do pre-screening to verify employment, income and call previous landlords. I also do internet searches on social media to try and verify as much as possible. If you can't verify employment/income then ask for pay stubs or W2
- If they pass those then do the background check. I use mysmartmove.com which checks criminal, credit and eviction history. Tenant puts in credit card ($40) so I don't touch the money. Sends immediate results.

Having a detailed process is your best opportunity to get good tenants. I don't care if they are top 1%. I just want people who pay on time and don't damage my property or disturb others. 10 properties and I've never had to do an eviction in 8 years using this system.

This is basically what I do as well. Paper application w/ no fee first, copy of DL, copy of paycheck, and landlord or professional reference (e.g. if they haven't been previously renting). If all that checks out I use cozy.co for the background and credit check ($40 directly paid online by tenant to cozy). I have never had anyone "fail" the paper application, and generally only have to ask one prospective tenant to do the cozy.co check, and it is already clear they are going to get the place unless something crazy turns up. I have had zero push back on this from interested tenants - and work on a first come, first serve basis for acceptance. Renters who are interested can turn the paper application around to me in a couple hours usually. Online check takes less than a day. As a tenant I would be turned off if every place I wanted to look at asked me for an application fee - but I don't get the impression that is what is happening here.

Adding - I see a rental more like a bank loan and less like a job. Yes, paying to apply to a job (where you are paid to perform a service) would not make sense. Paying for a mortgage application - where someone is lending you money/something of value - that is how it works.

Debonair

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #29 on: November 09, 2019, 06:13:42 AM »
Probably the application fee, I know it's regional but that screams "this is a bad neighborhood" or you are connected to gangs to me. So maybe avoid gold chains and bling when talking to potential clients.

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Re: Am I turning off potential renters? Why don't they apply?
« Reply #30 on: November 15, 2019, 09:37:37 PM »
Application fee is standard in most areas. I reimburse it on the first months rent to the successful applicant. You're playing with fire if you dont do a background check and you'll waste tons of money if you dont make the tenants pay for it up front. The application fee is my first line of defense in the screening process. I tell everyone that I reimburse it if they pass and rent the place. Deadbeats won't pay the app fee if they think they're gonna fail.