The process of renting out your property can be emotional, tiring, tedious, infuriating, and fruitless at times.
I used to dread turnovers, but I’ve come full circle with how I find and sign new tenants.
Back in the Day…
When I first was getting started as a landlord, I simply put a sign in the yard and prayed. I’m not kidding!
You can laugh, it’s okay, but there was a time where yard signs were the best way to find new tenants. Back in the day when I started, Craigslist didn’t even exist!
My Biggest Change and Reward
The biggest change I’ve made (with the exception of the technology I use) is that I have transitioned from “trying to sell the tenant on the property” to “letting the tenant sell me on why they are worthy of the property”.
It’s like a job interview. You don’t want just anyone – you want the one.
I’m not trying to sound arrogant, but I’ve found letting the tenant come to me not only produces a higher quality tenant, but it saves me a lot of time, hassle, and headache.
This attitude and business change has resulted in less showings, but the showings I do have are with highly qualified renters.
Many of my friends in real estate, including Lucas Hall, reduce their vacancy rates by showcasing their units while the current tenant is still living in the unit. This does reduce vacancy, but it’s never really worked for me.
I prefer to have the unit thoroughly cleaned before advertising it. Again, for me, it’s about finding a few quality tenants, rather than having dozens of showings.
Pre-screening helps me skip over the tire-kickers.
With that disclosure, I’d like to share with you my exact process to finding and securing new tenants.
Let’s get started.
Step 1. Clean and Capture the Condition
Thoroughly clean the place, take lots of pictures and capture a full video walk-through.
Doing so will help your listings stand out from others.
Related: How to Handle Dirty Tenants
If there is anything negative, go ahead and point it out in the listing. Disclosing some negative items will actually build trust.
For example, several of my properties have wall heat and window units for air. These can be a “turn off” for many people, but disclosing it, will likely save me time from doing a pointless showing of the property. Wholesalers typically do a great job of disclosing issues, and it helps them to create a good reputation.
Step 2. List Everywhere
Create an all out assault plan for listing your rental property.
I have a select list of resources that I utilize when creating an advertising assault plan. The ultimate goal is to create a “feeding frenzy” of potential renters chasing after the property.
When renters compete, you win.
The specific benefits of a “feeding frenzy” are:
- You can schedule “open house” times and not worry about individual showings.
- You can better qualify potential tenants.
- Likely your property will be rented faster using a combination of many different methods.
Related: How to Host a Landlord’s Open House
My Favorite Listing Resources
I’m going to categorize all the resources into one of six fun categories: Old, New, Short-Term Rentals, Organizational and Corporate, and Social Resources.
A. Old Resources
A lot of people disregard “old school” ways to get renters, but it’s so important to consider the demographic you are targeting.
For example, if you own single-family houses in a nice area, you might find that an order demographic will want to live there.
According to the PEW Research Center, the majority of people who read traditional newspapers are over the age of 55. Therefore, the majority of people who will see your classified ad will be over 55 years old. They also might be more inclined to drive around looking for “For Rent” signs rather than searching the Internet.
- Newspaper Ads I have to admit, this is my least favorite. However, there are still enough people reading the newspaper to justify the investment,especially if you have some vacancies you’re struggling to fill.
- Yard Signs Believe it or not, this works fairly well – especially with single family homes. Be sure to put another sign at a major intersection telling them to where to turn. Additionally, I would recommend buying cheap signs in case they get stolen.
- Referrals from Tenants Obviously this only works if you have a good relationship with your tenants. Most investors use some type of financial incentive like a gift card or $100 cash. This is well worth the money if it reduces vacancy time.
- Referrals from Friends This is a good strategy for me. My friends know that I have rental properties in a certain areas. If anyone is ever looking in that particular area, my friends always recommend my rentals. Related: 4 Steps to Creating a Competitive Advantage as a Landlord
- Referrals from Other Landlords and Investors This is another great strategy I use. I’m a pretty small fish in comparison to most of my friends who are full-time investors/landlords. I always help them out if someone is looking in a certain area where I know they have a property and they return the favor when they can or I proactively ask.
B. New Resources
- Postlets LOVE POSTLETS! This is MY FAVORITE SITE! It lets you save your company profile and information from other properties saving you tons of time when you have a new property to lease up. The best part? It populates, Zillow, Hotpads, and Trulia as well.
- Craigslist An oldie but a goodie. Be sure to really fill out everything including pictures and a video walk through. There really isn’t an excuse for not doing this and it definitely helps “sell” the property. Related: The Landlord’s Guide to Marketing with Craigslist
- Zillow Zillow is one of my new favorites. I don’t get as many leads as I do with Craigslist, but the leads are higher quality.
- Hotpads Similar to Zillow, but a little clunkier 🙂
- Trulia For some reason I get leads from people looking to relocate on this site and it has been an excellent resource for me.
- Rent.com Designed and built for large apartment owners, but the word on the street is they are going to be opening it up to smaller players (like me) soon!
- ApartmentGuide.com Obviously built for apartment owners. I haven’t used it, but a lot of apartment managers say it’s a good investment.
- Realtor.com If you are in “emergency” mode, why would you not use a realtor to get them to help you lease up a property? Great cash for them for the amount of work.
- PadMapper The reason this isn’t my favorite is simply that a lot of tenant prospects don’t use it. Nevertheless, I think it has a lot of potential for the future and I still use it occasionally.
- Facebook This is part of the referrals from “Friends” section. I usually just post a link from the Postlets listing, making it easy to share.
- YouTube For some reason I’m the only one in my area who uses this and people really love it. It saves me a ton of time qualifying tenants.
C. Short-Term Rental Resources
Some have created a sustainable business from short-term rentals, while others use it as a last resort. I’ve had a lot of fun with this type of housing and encourage you to try it out. Once I rented an empty house for a weekend and made $400!
- Airbnb This is by far my favorite site. It’s easy to sign-up and easy to use as both a renter and a property owner. Related: How to Make Extra Money by Allowing Tenants to Sublet with Airbnb
- VRBO This site has been around longer than Airbnb and receives more traffic. However, it’s more difficult to use. I would only use this if you were serious about making money part-time.
- HomeAway I haven’t used this site, but friends who own full-time vacation rentals love it. VRBO is part of the HomeAway family of sites.
D. Organization and Corporate Resources
There are several organizations that will actually pay the housing costs of certain types of tenants, for example, lawyers or nurses. I’ve never used this strategy but I sense it’s a solid strategy and will pursue this with future properties.
- Section 8 There’s probably no other type of rental property that is more debated than Section 8. On one hand you get guaranteed rent (kind-of). On the other hand, if the tenant no longer qualifies for Section 8 and refuse to move out, you have a bad situation. In my opinion, you should either focus on this or not – all or nothing.
- Churches Many churches provide temporary housing. Excellent option, particularly if you have furnished housing.
- Non-Profits Some non-profits help certain disabled groups and/or other groups of people and can be a great source of revenue.
- Businesses I know some businesses that like to pay for a year’s rent up-front. This can help your cash flow tremendously!
- Veterans Administration Excellent organization. I haven’t ever used them but intended to. I served in the Marine Corps and loving helping my brothers out.
E. Social Resources
The simplest form of social media marketing for potential tenants is simply asking your followers and fans if they know anybody looking to rent a place. Every investor I know utilizes social media, however, there are several other ways you can enhance this resource.
I listed some social resources above, but there are a variety of ways landlords can use social media resources to their advantage.
- Facebook Videos are extremely hot right now on Facebook. I highly encourage you to post video walk-throughs of your rentals on your fan page. If you have large multi-family properties, consider creating a Facebook group for your tenants. You could offer incentives for referrals in one central place.
- Twitter The key with using Twitter is the search function. You can use the search function to find people who have been looking for a place to rent in your area. Additionally, you can use # (hashtags) to easily sort through this information in your feed.
- YouTube For years I’ve been doing video walk-through tours of my properties. This drastically reduces the number of showings to people who don’t like a particular characteristic of one of my properties.
- Google+ Hangouts You can host a live hangout with Google+ and do a video walk through tour and answer questions. Note: you can also do this with Periscope.
Step 3: Human Relations
Working with prospective applicants.
Before I go into this process, I’m going to share a personal story that made me rethink how I did things.
My wife and I recently sold our house (wasn’t even on the market) and we had 30 days to scramble to find our next home in a nice area that was affordable. Well that should be easy… shouldn’t it?
Neither I, nor any of my friends with rentals had anything available, therefore we become renters for the first time in 13 years!
The property management companies that I contacted were just as bad as their reputation. They all sounded irritated when dealing with me and I had to keep following up with them just to get a showing.
It was a horrible experience.
A Promise to Be Better
After this episode, I promised to create a better experience for my tenants. For starters, I switched to using online rental applications. 13 years ago, I just simply gave them a paper form, and asked them complete it on the spot.
Sometimes I would email the application; they had to print, sign, and send it back, but I never knew if they would or could return it. It was a paperwork nightmare, especially considering I had a business partner and he needed to review the applications too. This created an entire new circle of email chains.
Better Technology = Happier Tenants
I use Cozy to collect online rental applications!
I recently solved this paper problem with Cozy! I’ve been watching Cozy grow for the last couple years, and had always wanted to use them to collect rent.
Recently a property became empty and in less than 5 minutes I had signed-up for a free account at Cozy and sent a rental application to my tenant.
The best part for me was that my business partner could see everything. Entirely eliminating email 🙂
Since then, I’ve discovered the other amazing benefits Cozy… but that will have to wait for my next guide coming soon!
About Jimmy Moncrief
Jimmy is a multifamily real estate investor and bank credit officer. He has written a complimentary bank negotiating guide on how to get around the 80% LTV rule which can be found at http://realestatefinancehq.com/