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

by Vena Jones-Cox

Question:

Another issue we have come across is prospects who take an application and never return it. They seem excited about the property when they leave, and promise to get the completed application back to us in a day or two, then we never hear from them.

We had an open house and had 4 couples that seemed to have genuine interest, but none returned the apps. Should we be doing follow-up calls?

Answer:

Yes, you should be doing follow-up calls not only to the people who took applications, but to the people who didn’t. This is the best way to get feedback as to what your customers like and dislike about your property.

I can speculate all day as to why your folks aren’t returning the apps, but the only ones who can really tell you are, well, the folks who aren’t returning the apps!

My guess in the case of the open house is that each of the 4 couples believed that they had no chance of getting the house because 3 other people were clearly interested in it.

And, by the way, it’s a good policy to try to get people to fill out the application on site rather than return it to you. In your pre-screening, you might tell potential applicants to bring a driver’s license or photo ID and a $20 application fee in the form of a certified check, money order, or cash.

This way, they can actually apply before they have second thoughts, see another property, or just get distracted.

Question:

One final concern is the quality of applicants. It seems like from mid-December through January (now), the only applications we are getting are from people with Beacon Scores of 500, awful references, and recent felonies. Are things usually slow this time of year? Is it the economy? The phase of the moon? My haircut? —WHS, Cincinnati.

Answer:

You didn’t mention whether you are dealing with one property or several. Nor did you say what the condition and price range of the property is. These sorts of details would tell me a lot about why you might be having bad luck with applicants.

Lower priced properties, particularly those in not-so-great condition, draw the types of applicants who stand you up and who aren’t worth having. Dirty or smelly houses in any price range do the same.

I can’t speak to the effect of your haircut (although if it’s bad enough to merit consideration, you might want to think about a change), but I can tell you that good applicants at this time of year are few and far between.

Think about it: what kind of person moves just before Christmas? Answer: the kind of person who has to. Who moves around the first of the year? Answer: people who spent their December rent on Christmas presents.

I kid you not—this is a tough time to find good tenant/buyers, and a common time to lose existing tenants to the commercialization of Christmas.

It seems as if you are mostly doing the right thing, but you need to get over this idea that the prospective tenant’s time is more valuable—or even AS valuable—as yours.

When you give people that impression, you’re giving them permission to take advantage of your time now and in the future. Repeat after me: “I am in control here… I am in control here… I am in control here…”

Good luck!

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.