How to Deal With Prospective Tenants (Part 1 of 3)

by Vena Jones-Cox

Question:

We’ve come across some problems we thought your readers might also be encountering, hence this note to you for your consideration in possibly addressing the below subjects in your newsletter.

The past 2 weeks have been really frustrating as I have been stood up by prospects at scheduled showings 8 times. We try to prequalify interested prospects over the phone, explaining our screening process, up front money needed, the lease/option as a way to become a homeowner, etc.

We always ask if they have driven by the property and also tell all prospects when scheduling a showing to please call if they need to cancel. Of 11 scheduled showings, I actually had one show up, two had the decency to call me and cancel, and 8 just failed to show.

Answer:

Let me start by saying that you’re doing one major thing exactly right: having the applicant drive by the property before you show it to them. This policy has really cut down the time I spend standing on the porch, waiting to be stood up.

Part of your “no show” problem might be your pre-screening process. I’ve noticed that most prospective tenants will not say to your face, “I can’t afford that payment” or “I don’t understand the lease/option”.

So rather than TELL them about your requirements, you should ASK them about their qualifications. For example, when you say, “You have to earn $2,000 a month to qualify”, the caller is unlikely to admit that they don’t, because they’re embarrassed.

Ditto when you say that they have to have $1500 up front. Instead, they’ll go ahead and make an appointment they have no intention of keeping.

So a better plan for you is to ask a series of questions: “What is your total household income before taxes?”, “How much do you have to invest?”, “Why are you moving?”, etc.

(For fair housing reasons, it’s a good idea to print these questions out, have them put into a pad, and actually fill out the form for each caller. This avoids the appearance that you are trying to dissuade some callers and not others).

Any applicant who does not pass this pre-screening should just be told so, right then, by you.

If you want to soften the blow some, you can use the line that my assistant always does, which is, “The owners have a very strict policy about income, and you don’t meet the guidelines. I wouldn’t want to waste your time or your $20 on this house, but would you like me to call you about others?”

I have been told by fair housing advocates that, before giving this little speech to any caller, you should double check that they do not have additional income that they’re not mentioning.

Also, if the caller insists on seeing the property anyway, it’s a good idea to show it to him… just tag him onto another showing that you already have (see next question for more details).

Another good question to ask is, “Have you ever lease/optioned a home before?” If the answer is no, you can do your little spiel about how a lease/option works, then end with “Well, I’m not sure I explained that very well — I’ll have some information about how it works at the house” (and, of course, have the information available when they get there).

This way, you take the blame for the fact that they don’t understand, and assures them that they WILL understand prior to making a commitment.

If you’re concerned about asking questions about people’s income and motives, get over it. The ones who get offended are the last people you want to make an appointment with, anyway.

Reprinted from the Real Deal, a monthly newsletter for Real Life Real Estate Investors with permission of Vena Jones-Cox. Get a free 3-month trial subscription by clicking here. One per household, please.