Don’t Feed the Alligators

A Personal Finance Blog from a Small-Scale Landlord’s Perspective

Creative Commons License photo figure credit: tifotter

Since I’m currently out of work and home during the day I get tasked with tenant turnover and must wear the Property Manager hat. I have to say it’s been fairly successful this time around and I haven’t been too discouraged by the potential tenants. One thing that has been nice is the feedback I am getting from the people at the showings. They are impressed with the apartment and find it to be clean and welcoming. They also have indicated that what we offer for the price is reasonable.

This is the third time we have listed our unit on Craigslist and we also have a simple yard sign for the second time. We found that advertising in the newspaper was expensive and didn’t yield great results. We found that by being able to post photos on the internet, people know what they are getting before they take a look thus saving everyone’s precious time. I have shown the apartment about 9 times. More than half had seen the Craigslist ad and the rest were drive-bys.  I had only one person fill out an application so far and a handful of people take an application. In contrast, last year we had 4 applicants and ended up with the 4th one for a variety of reasons: bad credit, decided not to move, and vanished into thin air! 

We have found in the past that unless someone is willing to fill out the application on the spot, he is probably not interested. This is not always the case. I did have one person view the apartment twice and our current applicant took the application and dropped it off the next day.

Until today everyone who scheduled an appointment has shown up. Today I have had 2 no shows which makes me very angry. Although I did not have any plans, if we did not live in the building it would be annoying and time consuming to have come to show the apartment and have a no show. Common courtesy is a good quality in a tenant. These people, if I hear from them again, now have red flags.

For our applicant screening we have been using a service called Clear Screening to conduct credit and background checks. I have found Clear Screening to have great customer service and they provide a good product for a fair price. We can run credit reports for $14.95 and criminal reports for $21.95 (plus court fees).  Criminal reports do take a lot longer to process than credit reports, which are instantaneous. To qualify to pull someone’s credit, I initially had to prove I was a landlord by providing them with information on me and my property. After approval, all of my applicant checks are conducted online.  We also ask the applicants to fill out a credit report authorization form.  Even though I had not used the service since last year they were able to reactivate my account so I could screen the next round of candidates.  As we have learned in the past credit checks are invaluable tools to screen perspective tenants. We have had to decline an applicant for less than satisfactory credit. More recently we have had instances where perspective tenants operated on a cash only basis making it more difficult to screen. I have to commend them for living a credit-free life in our increasingly credit-full world. Two methods we have used in these cases are verification of bank balances and verification of past payments to various creditors.

Another often overlooked aspect of tenant screening is reference checks. It seems obvious to verify employment, but it is often difficult to call a complete stranger and ask for a personal reference. I have found that although these calls are often awkward to make, they do speak volumes about people. Although your friends may not say a lot if they think you may be a less than satisfactory tenant, people tend to speak volumes about people that they trust and feel are upstanding citizens that would work out well in your building. I have found this part to be very rewarding because these references are typically very telling of how a tenant will work out.

Despite the fact that some people will set up appointments and not show, there are other people that you can get a sense for, from the first meeting. Obviously some part of this job involves your gut feeling. In some sense by having me personally screen the tenants and MITBeta only seeing the written screenings it gives us a balance and objectivity. On paper someone may be questionable but the way they conduct themselves, their dealings with others, etc. are also a great measure of the way they will live in and treat your property.

Epilogue: I believe we have made the right decision with our next tenant and they are moved in as I write this. The end goal of every landlord is to have a longterm tenant that is respectful of her property and pays the rent every month on time.  I hope these new tenants are very happy here for a long time. I know they hope to be and are very excited about the move. I’m happy to be offering housing to someone who is as excited to live in my house as I am. People who are happy to be where they are tend to treat their aparment as if it were their own. But as is the nature of the business… only time will tell.

3 Responses to “On being a part-time property manager…”

  1. Michelle Says:

    Really wonderful write up… thank you.

    It hit in a lot of right spots.

    And, congratulations on finding a good tenant!

  2. Joshua Says:

    I agree, excellent write up!


  1. The Friday Gathering - 2009 New Year Edition