Author Topic: What's the proper order of acquiring tenants?  (Read 8372 times)

neo von retorch

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What's the proper order of acquiring tenants?
« on: December 04, 2014, 07:18:58 PM »
I put up a CraigsList post, the tenant checked out the room (at the time, an existing tenant I trust was able to show the place, which is 90 minutes from my home), and when he said he was interested, I had him fill out a MySmartMove application. Everything checked out, and I sent him a lease and we agreed on a move-in date. I emailed him a lease to sign and asked him to mail a deposit. Six days later and I check-in with him... and he backed out and is moving elsewhere. Frustrating. Should I ask potential occupants to fill out the MySmartMove application before showing the place to them?

Do you always have them pay the application fee ($35)? When are tenants willing to do that? Only after seeing the place?

niknak

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Re: What's the proper order of acquiring tenants?
« Reply #1 on: December 04, 2014, 10:42:09 PM »
I think you'd at least give the potential tenant a chance to view the place before they fork over any money. Otherwise, how are they going to know that they want to rent it?

Seeking the Brass Ring

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Re: What's the proper order of acquiring tenants?
« Reply #2 on: December 05, 2014, 06:55:01 AM »
I'd say if you require an application fee then the fee should be paid at the time the application is given to you.  I ask for 1/2 the security deposit at the time of application.  The deposit will be returned in the event they are rejected and will be applied to the security deposit if they are accepted.  I found this cuts down on a lot of the 'false starts'. 

I also send a list of qualifying criteria when they first contact me to set up a showing.  It's basic stuff like 'no pets', income requirements, verification of employment etc.  I get a lot of people who see this and drop out of the process immediately.  Cuts down on a lot of chasing around for a tenant who wouldn't be accepted anyway. 

monarda

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Re: What's the proper order of acquiring tenants?
« Reply #3 on: December 05, 2014, 09:24:35 AM »
I never show a unit to just one person. I typically rack up an afternoon of showings and get multiple applications on the same day as the showing. Once I have at least one good qualifier, I check back with the 'finalists' to be sure that they all are still interested before proceeding.

I also send a list of qualifying criteria when they first contact me to set up a showing.  It's basic stuff like 'no pets', income requirements, verification of employment etc.  I get a lot of people who see this and drop out of the process immediately.  Cuts down on a lot of chasing around for a tenant who wouldn't be accepted anyway. 

We don't charge a fee for applications, but we do send a list of qualifying criteria like Seeking the Brass Ring does. We don't want to bother spending time with low end applications, and prospectives drop out of the process. But if it's just income requirements that limits them (and they're relatively close to borderline qualifying), we do state they can have a cosigner if they want. Usually these people drop out and find a cheaper place, though (as they should).
« Last Edit: December 05, 2014, 09:20:53 PM by monarda »

feelingroovy

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Re: What's the proper order of acquiring tenants?
« Reply #4 on: December 05, 2014, 05:46:09 PM »
I'd say if you require an application fee then the fee should be paid at the time the application is given to you.  I ask for 1/2 the security deposit at the time of application.  The deposit will be returned in the event they are rejected and will be applied to the security deposit if they are accepted.  I found this cuts down on a lot of the 'false starts'. 

This is exactly what we do.

Quote
I also send a list of qualifying criteria when they first contact me to set up a showing.  It's basic stuff like 'no pets', income requirements, verification of employment etc.  I get a lot of people who see this and drop out of the process immediately.  Cuts down on a lot of chasing around for a tenant who wouldn't be accepted anyway.

This is brilliant.  I do try to pre-qualify people on the phone before a showing with a list of questions, but this is better.  My husband can never remember the list of questions, no matter how many times I tell him where they're written.  :)

DoubleDown

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Re: What's the proper order of acquiring tenants?
« Reply #5 on: December 05, 2014, 06:30:26 PM »
Already plenty of great advice.

In my case, I treat it like selling a car or anything on Craigslist: First person to qualify AND put up the money gets it. Without those, it's still available for someone else to take. So, if someone says they want the place, I tell them "great" and take a rental application and non-refundable fee on the spot. If they're qualified, I get the lease paperwork to them right away and give them a short turnaround (usually a day) to return it with the security deposit and first month's rent.

NinetyFour

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Re: What's the proper order of acquiring tenants?
« Reply #6 on: December 05, 2014, 09:12:24 PM »
Following...

Megma

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Re: What's the proper order of acquiring tenants?
« Reply #7 on: December 08, 2014, 09:46:04 AM »
I'd say if you require an application fee then the fee should be paid at the time the application is given to you.  I ask for 1/2 the security deposit at the time of application.  The deposit will be returned in the event they are rejected and will be applied to the security deposit if they are accepted.  I found this cuts down on a lot of the 'false starts'. 

I also send a list of qualifying criteria when they first contact me to set up a showing.  It's basic stuff like 'no pets', income requirements, verification of employment etc.  I get a lot of people who see this and drop out of the process immediately.  Cuts down on a lot of chasing around for a tenant who wouldn't be accepted anyway.

This is great advice! I am looking to get started with rentals in the next year and will be doing this!

Bob W

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Re: What's the proper order of acquiring tenants?
« Reply #8 on: December 08, 2014, 10:09:54 AM »
I'd say if you require an application fee then the fee should be paid at the time the application is given to you.  I ask for 1/2 the security deposit at the time of application.  The deposit will be returned in the event they are rejected and will be applied to the security deposit if they are accepted.  I found this cuts down on a lot of the 'false starts'. 

I also send a list of qualifying criteria when they first contact me to set up a showing.  It's basic stuff like 'no pets', income requirements, verification of employment etc.  I get a lot of people who see this and drop out of the process immediately.  Cuts down on a lot of chasing around for a tenant who wouldn't be accepted anyway.

This is great advice! I am looking to get started with rentals in the next year and will be doing this!

+1

richschmidt

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Re: What's the proper order of acquiring tenants?
« Reply #9 on: December 08, 2014, 11:27:33 AM »
I put up a CraigsList post, the tenant checked out the room (at the time, an existing tenant I trust was able to show the place, which is 90 minutes from my home), and when he said he was interested, I had him fill out a MySmartMove application. Everything checked out, and I sent him a lease and we agreed on a move-in date. I emailed him a lease to sign and asked him to mail a deposit. Six days later and I check-in with him... and he backed out and is moving elsewhere. Frustrating. Should I ask potential occupants to fill out the MySmartMove application before showing the place to them?

Do you always have them pay the application fee ($35)? When are tenants willing to do that? Only after seeing the place?

I've never had anyone fill out an applications without seeing the place first. :)

I just rented out one of our two upstairs apartments this past weekend. I've had it on Craigslist for about a month. When people email me about it, their first question is usually, "When could I see it?" When I show it to them, I have applications with me and describe the MySmartMove thing. They usually take the application with them and return it to me, though I've had people fill them out right then and there. They can either include the $35 application fee with the application, or they can pay it directly to MySmartMove.

Once the background/credit check is done, and I've contacted their references, I make a decision... and if it's to rent to them, I let them know right away and set up a time to meet them to sign the lease & get their deposit. If they're moving in right away, I also get their first month's rent and give them the keys. If there's a lag of a week or two, I let them wait until the lease begins to exchange keys for rent. But I get the deposit at the lease signing.

I actually had something happen to me similar to what you described above about a week ago. An applicant loved the apartment, got her application to me, and I got the MySmartMove process going. (She was paying, not me.) The next day, I hadn't seen action on it, so I emailed her... and she just hadn't gotten to it yet. Then the weekend hit. By Monday, I still hadn't seen action on it, so I emailed again, and she said she'd decided not to rent it.

So that cost me a few days... but I still had others interested and hadn't stopped showing it, so I had another applicant within a day or two, and they moved in that next weekend.

gimp

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Re: What's the proper order of acquiring tenants?
« Reply #10 on: December 08, 2014, 02:41:50 PM »
As a renter, I would never fill anything out before seeing the place.

On the other hand, when I last moved, the apartment has a $35 fee plus a $500 security deposit, completely refundable if either party backed out, due on application. I had no issues with paying that on application; it's a great way of locking the place down (nobody wants to let go of $500 without reason!) while still giving me space to maneuver.

Fishingmn

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Re: What's the proper order of acquiring tenants?
« Reply #11 on: December 09, 2014, 06:32:07 AM »
I never show a unit to just one person. I typically rack up an afternoon of showings and get multiple applications on the same day as the showing. Once I have at least one good qualifier, I check back with the 'finalists' to be sure that they all are still interested before proceeding.

Please check with your state laws. This is illegal in Minnesota. You must process applications in the order received. They do this in order to avoid discrimination.

The way to do this is set stringent, written criteria ahead of time so that only qualified people apply. I personally would never take an application before meeting them at the property. I also call current employers and past/current landlords before running the background check.

Skyhigh

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Re: What's the proper order of acquiring tenants?
« Reply #12 on: December 09, 2014, 02:10:50 PM »
I never show a unit to just one person. I typically rack up an afternoon of showings and get multiple applications on the same day as the showing. Once I have at least one good qualifier, I check back with the 'finalists' to be sure that they all are still interested before proceeding.

Please check with your state laws. This is illegal in Minnesota. You must process applications in the order received. They do this in order to avoid discrimination.

The way to do this is set stringent, written criteria ahead of time so that only qualified people apply. I personally would never take an application before meeting them at the property. I also call current employers and past/current landlords before running the background check.

I agree, in our state you are supposed to take each application in the order they are received and select the first qualified applicant that meets your stated standards and not pic the best of the bunch.




neo von retorch

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Re: What's the proper order of acquiring tenants?
« Reply #13 on: December 09, 2014, 02:33:03 PM »
Thanks everyone - I basically agree with all that. I was just frustrated with the guy backing out, and a little concerned that I might travel for people that did that. I've updated my listing with a lot of help from this thread - http://forum.mrmoneymustache.com/real-estate-and-landlording/renting-out-a-room-(live-in-landlord)/msg476035/ (His situation is VERY much like mine, except for the fact that I no longer live there!) I hope to do my best to pre-screen applicants, show them the room (more than one in a short window on the same day if possible), then have interested parties fill out the application. And possibly ask for a refundable deposit in person when showing the room if they are interested to make things clear. (If more than one person was interested, I'd have to be clear that the first qualifying application would get the room, and the deposit would be refunded to others.)

AnnFlem

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Re: What's the proper order of acquiring tenants?
« Reply #14 on: December 23, 2014, 09:09:11 PM »
I would only give them application form after they have seen the house. Also I speak to them about the list of criterias I have if they want to rent the place. Only if they agree to this, I move to the application form part. But before you start meet a litigation lawyer and ask them if there are any specific rules or something that you have to follow. Sometimes you won’t know the requirements and may end up in trouble. I am a landlord and I went to the Y Family law firm to about how to proceed before giving out a place for rent in Vancouver.

adamcollin

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Re: What's the proper order of acquiring tenants?
« Reply #15 on: December 24, 2014, 01:38:25 AM »
This is wrong on the part of the tenant. You should be very  careful next time and take a deposit at the time of application, so that he cannot back out.

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Re: What's the proper order of acquiring tenants?
« Reply #16 on: December 30, 2014, 08:03:01 AM »
I ask for 1/2 the security deposit at the time of application.  The deposit will be returned in the event they are rejected and will be applied to the security deposit if they are accepted.  I found this cuts down on a lot of the 'false starts'.

Do sign some sort of contract to that effect? There is no way I would hand over that much money without a written agreement in place first.

Also, unless you can guarantee that their application will be approved (and of course you can't, or at least shouldn't) it's totally legitimate for a potential tenant to continue viewing and/or applying to other places while they wait for your response.  The OP's situation is a different because he had already approved the application and even agreed to a move-in date when the tenant backed out, which imo is totally wrong.

neo von retorch

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Re: What's the proper order of acquiring tenants?
« Reply #17 on: December 30, 2014, 09:02:34 AM »
Yes - I made the big mistake of paying for the application, which I won't do in the future. Mistake because I'm out that money and... psychologically, if someone spends $30-35 on an application, they've already "invested" in something and are more likely to follow through with the bigger investment of renting.

richschmidt

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Re: What's the proper order of acquiring tenants?
« Reply #18 on: December 31, 2014, 02:06:04 PM »
Yes - I made the big mistake of paying for the application, which I won't do in the future. Mistake because I'm out that money and... psychologically, if someone spends $30-35 on an application, they've already "invested" in something and are more likely to follow through with the bigger investment of renting.

Ahhh... Now it makes more sense. I hadn't realized that YOU had paid their application fee. I thought you used MySmartMove.com and had the applicant pay them directly. That's what I do, if they're not handing me the application fee with their application.

I would never pay an applicant's application fee for them.

neo von retorch

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Re: What's the proper order of acquiring tenants?
« Reply #19 on: January 02, 2015, 08:04:03 AM »
Rookie mistake! It was the first time using it and I had just heard about it, and in a way "sprung" the process on the potential tenant. But I definitely won't do that going forward.

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Re: What's the proper order of acquiring tenants?
« Reply #20 on: January 02, 2015, 08:11:47 AM »
I have prospective tenants pay me the $25 fee up front with application, but if they rent the place, i credit it back to them in the first month's rent.  Only costs $12 to run the credit and background check.

richschmidt

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Re: What's the proper order of acquiring tenants?
« Reply #21 on: January 02, 2015, 01:11:55 PM »
I have prospective tenants pay me the $25 fee up front with application, but if they rent the place, i credit it back to them in the first month's rent.  Only costs $12 to run the credit and background check.

Where do you get the checks run for $12? I see that MySmartMove.com charges $35 now. I'd be very interested in a cheaper solution.

Fishingmn

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Re: What's the proper order of acquiring tenants?
« Reply #22 on: January 02, 2015, 02:48:10 PM »
Where do you get the checks run for $12? I see that MySmartMove.com charges $35 now. I'd be very interested in a cheaper solution.

$35 is very reasonable - I've never had a tenant complain about that as being out of line with what other landlords charge.

richschmidt

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Re: What's the proper order of acquiring tenants?
« Reply #23 on: February 02, 2015, 04:11:21 PM »
Where do you get the checks run for $12? I see that MySmartMove.com charges $35 now. I'd be very interested in a cheaper solution.

$35 is very reasonable - I've never had a tenant complain about that as being out of line with what other landlords charge.

I haven't received any complaints, either... but I'm always open to a cheaper option! :)  As long as it works well, of course.

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Re: What's the proper order of acquiring tenants?
« Reply #24 on: February 03, 2015, 08:08:53 AM »
We scheduled an entire day of showings and took applications. 

We told them we would only run the background check ($50 is what we charged, I think) if the applicant before them did not take the place, so we returned checks to 5 people when applicant #3 got the place.  IIRC, applicant 1 was not qualified, and applicant 2 did the same as your tenant- turned us down after we offered it to her.  It only took us overnight to process it all, but she knew she was #2 and got nervous and signed a lease elsewhere.




richschmidt

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Re: What's the proper order of acquiring tenants?
« Reply #25 on: February 05, 2015, 09:21:58 AM »
I'm about to show one of our rentals to 5-6 prospective tenants today and Saturday. Is there any reason I don't collect applications (with application fees) from all who are interested, run them all, and then pick the best-qualified candidate? That's what I did last time... but I see lots of people who do the "first-come, first-served, stop after finding first qualified candidate" thing, as iowajes just described.

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Re: What's the proper order of acquiring tenants?
« Reply #26 on: February 05, 2015, 10:00:18 AM »
Quote
I'm about to show one of our rentals to 5-6 prospective tenants today and Saturday. Is there any reason I don't collect applications (with application fees) from all who are interested, run them all, and then pick the best-qualified candidate? That's what I did last time... but I see lots of people who do the "first-come, first-served, stop after finding first qualified candidate" thing, as iowajes just described.

We were quite scared about discrimination claims if we didn't do first come first serve.  Or claims that we were profiting on application fees (illegal in my city, so we set it just at the cost of the background check) if we had many applications- hence why we returned checks.

richschmidt

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Re: What's the proper order of acquiring tenants?
« Reply #27 on: February 05, 2015, 10:10:55 AM »
We were quite scared about discrimination claims if we didn't do first come first serve.  Or claims that we were profiting on application fees (illegal in my city, so we set it just at the cost of the background check) if we had many applications- hence why we returned checks.
Thanks. Our application fee is just the cost of the screening, so no worries there. In fact, they can pay mysmartmove.com directly, if they choose. And since this is a $1,000 house (middle of the market, not low end), I don't think we'll face any discrimination claims. Plus we don't plan to illegally discriminate, so there's that. :)

Does anyone have any other reasons against batching applications and comparing them instead of going one at a time?

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Re: What's the proper order of acquiring tenants?
« Reply #28 on: February 05, 2015, 01:07:49 PM »
Fair housing laws.  I'd process them first come first serve, but if you get a bunch at once, that may be impractical. But if someone emails you their app a few hours later, I wouldn't process theirs above others.
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richschmidt

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Re: What's the proper order of acquiring tenants?
« Reply #29 on: February 05, 2015, 01:25:33 PM »
Fair housing laws.  I'd process them first come first serve, but if you get a bunch at once, that may be impractical. But if someone emails you their app a few hours later, I wouldn't process theirs above others.

A year and a half ago, on this same house, I had a TON of people email me from the Craigslist ad. (It photographs well.) So I did a couple of open houses, and out of those had 4 people submit applications: two single men and two single women, all caucasian. I processed them all (credit/background), and none was clearly the best-qualified. (The two men were clearly NOT the best-qualified, though.) I called one of the females to tell her I was going with someone else, when she offered to pay a higher rent amount because she was so in love with the house. So I went with her.

I've advertised a higher rent this time, and it's winter, so I haven't had nearly as much interest this time. On our other two houses, we haven't had this issue. (They're bigger, nicer, and more expensive.) The interest on those usually trickles in, so I only have one application coming in at a time. We'll see how many applications come in from the 5-6 showings I have lined up. Who knows? I might have only one applicant!