Real Estate Investment Articles

Tenants spend just as much time and effort searching for a place to call home as you put into marketing your property. Qualifying applicants are just like you.
Good tenants, the ones who pay on time and treat the property with respect, look at their future home almost the same as you evaluate a place to live.

FIRST IT’S LOCATION AND PRICE
Location and price dominate the initial search. They decide on an area where they want to live with a price range they can afford.

Then there are layout requirements: The precise number of beds’ and bathes (rooms.) Maybe a house on one level so Grandpa doesn’t have to climb the stairs. What is trivial to one tenant can be essential to the next. One of my tenant’s primary concerns was finding a house with a swimming pool deep enough that he could give diving lessons in it.

You have little control over these factors. Your house is where it is. It may be four bedrooms and have 2,200 square feet. It may have a swimming pool that will be desirable to some, like the diving instructor, or a turnoff to others, like a family with small children. Even price is dictated by the market; landlords set the rent based on what comparable properties in the neighborhood are renting for. What you can control, though, is how you represent yourself and your property, and those factors often influence whether you end up with a good tenant or a bad one.

“YOU GET THE TENANT YOU DESERVE….”
Good tenants don’t come to bad properties,” said Berne Fleming, one of the new owners of GoRenter.com. If you want to attract good tenants, he recommends making sure the property shows well. Applicants with a poor track records will see an attractive property and drive past thinking there’s no way they’ll ever be able to measure up to the other applicants who live there.

On the other hand, a poorly maintained property indicates that the landlord may not be involved in the day-to-day management of his investments. It signals to the tenant that, if the landlord can’t make the effort to landscape the front lawn, then maybe he won’t make the effort to run a credit check or call previous landlords. Better yet for that less-than-desirable tenant, maybe he won’t realize that the rent is two weeks late.

That’s why curb appeal is so important, according to Leslie Kellett with GoRentToday.com. The first impression makes a big impact, so she advises the investors she works with to spend money on landscaping, in the front and back yards. Landlords should also paint the property inside and out, wash the windows and repair or replace anything that is broken. Don’t give that good tenant a reason to not to rent your property before he even gets in the front door.

Inside, new flooring and upgraded blinds go a long way towards making a good impression. You may also want to invest in new appliances, says Kellett, because the money you spend upfront may drastically reduce the time the property spends vacant. (You can always recoup a little with a slight rent increase of $15 to $20 a month.) “It’s all in the details,” she said. “Spend a little money on things like a garage door opener or carriage lights. Those details can help reduce the vacancy length and attract higher quality tenants.”

THINK LIKE YOU’LL LIVE THERE
If you wouldn’t, Why should a tenant? Kellett suggests that you walk the property as if you were the tenant looking for a place to rent. Is it dirty? Does it smell? Are the window screens torn? Does the built-in microwave work? Good tenants are judging your property against nearby properties where these are not issues; bad tenants aren’t as picky, as long as you’ll hand them the keys.

This is good advice for investors with multi-family housing and apartments as well. E.C. Wingert with Apartment Finders said the tenants he works with want the same things as someone looking for a single-family residence: they primarily want a clean, nice place in a safe neighborhood. “Gated communities are very popular,” he said. Swimming pools, fitness clubs and especially onsite laundry facilities help, too.

INVESTOR OR PROPERTY MANAGEMENT
“Attracting good tenants involves more than just having a nice property; it involves a growing degree of professionalism and accompanying liability, SAYS Tom Caldwell of Brewer Caldwell.

“A landlord may be able to do this with one or two properties but sooner or later issues swamp most do it yourself investors. Their investment plans become limited based on rationing time between family, career and investment management,” says Caldwell.

If you aren’t going to use a property management company, at least be professional. Dress appropriately, in business-like attire. Arrive for meetings on time and come prepared with all necessary paperwork.

Meeting with applicants face-to-face makes a big difference in an age of voice mail and Internet interaction, Kellett says. Avoid lock boxes, and she adds, treat applicants personably. Be responsive to their phone calls, too. If you’re not available and helpful before they move in, a good tenant is going to assume you won’t be available or helpful after they move in.

Even the application process and the application itself can go a long way in determining whether you end up with a good tenant or a bad one. Good tenants may doubt your abilities as a landlord if you fail to run a credit check or ask for references. “I’ve seen applications where landlords don’t even ask for a social security number,” Kellett said. “That’s a red flag that you don’t know what you’re doing. How can you even run a credit check?”

GOING PROFESSIONAL
Using a property management company has its advantages when it comes to attracting desirable tenants who know that property managers are going to have more than one property to show them. Tenants also realize that property managers abide by the Landlord Tenant Act and Fair Housing laws. That’s bad news for the not-so-good tenant looking for a landlord who doesn’t know how to evict them, but it’s a plus for tenants who want to know they will be treated fairly under set guidelines.

Fleming points out that current market conditions have created an influx of good tenants, people who could no longer afford their homes or who had adjustable rate mortgages. These people are used to caring for a home, and they want to own homes again. They may even be interested in lease options, although you may want to wait for their credit to improve and housing prices to settle before starting a lease option program.

Even though there are plenty of good tenants out there, they won’t want to rent a sub-standard property. Make yours stand out by presenting your property and yourself in the best light possible.


RESOURCES
Apartment Finders
www.aptfind.com
602-957-7000

Bennett Property Management
www.bennett2rentit.com
480-969-1818

Brewer Caldwell Property Management
www.ahouseisbetter.com
480-834-9200

GoRenter.com
www.gorenter.com
602-512-8315

GoRentToday.com
www.GoRentToday.com
A Keith Blue Investment company
480-204-9824

National Tenant Network
www.ntnonline.com
800-480-7080

Go to www.PersonalRealEstateInvestorMag.com for property management resources in other cities

Tips for attracting good tenants:
1. Good curb appeal. Landscape and paint, if necessary.
2. Make sure the interior is clean and freshly painted. Replace flooring and upgrade blinds.
3. Pay attention to the details. What you would you think if you were considering renting the property?
4. Be flexible. Don’t turn away a good tenant because they have a small dog or request a refrigerator be provided.
5. Act professionally if you manage your own properties. Be personable and helpful. Return phone calls as soon as you can.
6. Do what a property management company would do. Check references and run credit checks.
7. Even better — Use a property management company. Good tenants know they’ll have more rental options with management companies and appreciate working with professionals.