Finding the “Perfect” Tenant; How Do We Do it?
If this is your first time reading our blog, I’d like to welcome you and I sincerely hope you enjoy yourself. I’ve made it a personal goal this year to blog more often. Embarrassingly, I studied Literature in University, so you’d think I’d be pumping out blogs like crazy. Turns out not so much…
So, I decided to do a series of blogs about what it’s like to work at a Property Management company. I think there’s a lot of misconception about what actually goes on behind closed doors in Property Management, so I think a peak behind the curtain might answer some questions (If you feel like encouraging me, leave a comment or suggestion down at the bottom.)
In previous blogs (HERE) I’ve talked about finding the ‘perfect tenant’, and why we go to great lengths to put the ‘right person’ into each of our clients’ properties. The newest of my responsibilities at Drummer is to be the first point of contact for owners inquiring about our services, so I get the following question a lot:
“How do I know Drummer is leasing my property to a ‘good’ tenant?”
It’s a fair and important question. As an owner, it can be nerve-wracking handing over the care of such a substantial investment to someone else. You’d want to be assured that those taking over responsibility would treat it as if it were their own, right?
To partly answer that, it’s a rarely known fact that Drummer is its own biggest client. We put our money where our mouth is because to truly deliver the best possible service to our clients, we believe that we should have a vested interest in the quality of that service.
As I’ve explained in a previous Blog post (HERE), it’s in our best interest to put the ‘right’ person into each property. It’s the only way our business works!
But how you ask? Well, for starters we fully understand who we’re working for; our owners! And with that in mind, our Property Managers do everything by the book; we never lease a property to someone based on gut feeling alone. We have a rigorous screening process that we subject every applicant to before approving their application. I will cover the requirements of this process in just a moment.
What I want to impress upon you, my dear reader, is that because we don’t own the property in question; we are often far stricter than most owners would be. Part of the advantage of hiring us is that we have the resources and infrastructure to thoroughly screen and investigate each applicant before approving them.
So let’s talk about how we do that.
For starters, we pull their credit. A person’s credit can be a great indication of their financial responsibility, stability, and often their personality. It also gives us a private look into their past, so in some instances we find red flags that will disqualify an applicant a private owner might overlook. On the flip side, we occasionally approve tenants that have less then perfect credit because we can see steady improvement in their credit history. Something like a divorce, or unexpected job loss can temporarily harm a persons’ credit, but not beyond redemption. At the end of the day, we try and be as understanding as possible. That being said, protecting our clients’ investments is our main priority, so in most cases we simply can’t look past credit issues.
Second, we confirm the applicant’s employment status and total income before taxes. There is a certain ratio of rent to income we look for when considering an applicant’s suitability for a certain property. We won’t lease a property to a tenant who can’t reasonably afford to pay the rent. Simple as that. For all applicants we personally call their employer and verify the income they have reported to us is accurate. If they don’t have an employer (for instance, those on disability funding, self-employed, or retirees) we require proof of incoming/present funds and consider that when looking at the ratio of affordability.
Third, we require past rental references. And not just their current landlord, wherever possible we go back 2-3 references. Reason being if they are a poor-quality tenant, their current landlord may say whatever he/she thinks we want to hear just to be rid of them. We ask questions like; “Do they pay on time?”, “Do they keep a clean home?”, and “Do they get along with their neighbors?” among others.
Fourth, we consider if the applicants are a “reasonable fit”. An example would be size of family to number of bedrooms or walk-of-life differences that could result in friction with other residents (ex. University students vs. senior residents). We take into account the resulting wear and tear on the property, the quality of living for the residents themselves, and the longevity of their tenancy in this case.
Lastly, and only in the case of two equally qualified and approvable applications, we rely on our Property Manager’s instincts. At the end of the day, we want a good fit for our client’s properties. When one of our Property Manager’s has a bad feeling about somebody, we listen and take that into consideration.
It’s worth noting that there are exceptions to each of these conditions. We consider each application independently and take into account every applicant’s unique circumstances.
That being said, we are ultimately hired to ensure the proper care of our client’s properties, and the continual income they generate.
So yes; we want to find tenants for our clients. But not at any cost… Placing the ‘right’ tenant is essential for both our clients and the continued success of our business.
Want to know more about how Property Management works? Leave a comment below and I will find out and answer you with a Blog!