How to Acquire Higher Quality Rental Tenants
In business, some tasks are more important to your end profitability than most appreciate. Finding good tenants is perhaps the number one way to a more profitable home rental business.
While landlords often react to challenges by cutting services, offering concessions, evicting tenants, or even selling some properties, others focus on improving their tenant lead pipeline.
Aside from finding great landlords with excellent properties to manage, your next business priority is to find great tenants for owners. When you consider some landlords and property managers neglect tenant acquisition, it’s not surprising that tenant related costs such as lost rent, legal fees, cash flow disruption, turnover, and chronic lower occupancy rates.
“The tenant acquisition strategy is very important — tenants are your customers and you create the ones you need.”
More Than Risk Management
Some say tenant acquisition is all about risk management. It’s actually about finding and signing the best tenants such that risk management isn’t an issue. Pro managers don’t treat tenant acquisition as a process but rather a strategy for acquiring the best rental tenants possible.
Increasing your high-quality tenant inquiries (your pipeline) and converting more of them will have a definite impact on your bottom line, over 5 to 10 years.
Who is the Great Rental Tenant You’re Looking For?
- doesn’t begrudge the rent price
- always pays rent on time
- pays via your online rent payment platform
- is always honest and upfront in communications
- communicates calmly and well and has confidence in the landlord
- performs maintenance as needed and minimizes maintenance/repair service calls
- takes care of the rental house like it was their own
You might turn tenant acquisition over to a property management company, however you’ll want to understand the quality of their services first. Some make splashy claims about tenant acquisition but may fall short in execution and profitable results.
Great Tenants Don’t Grow on Trees
Bad tenants are everywhere and easy to attract. Good tenants on the other hand are hard to reach and not easy to convince to choose your rental. Yet these great tenants gladly pay top rent, pay their rent on time, maintain their employment and income flow, protect the property value, and make managing them a joy.
You can improve your value proposition and incentives without offering rent concessions to get more of them into long term leases.
One way is to do renovations, appliance upgrades, and offer digital amenities to get them leased. This way, your investment goes right into the value of the property. You’re building equity while making it look like you’re doing it for them. As long as they’re happy right!
There’s a lot more to good tenant acquisition than credit checks. A high credit rating tenant simply means they’re ready to buy a house, not keep renting from you.
Let’s look deeper into a strategy to reach and convince high-quality tenants to sign a rental lease. The end value in revenue is significant.
Your New High-Quality Tenant Acquisition Process:
- Set the Right Rent. Read our post on how to set the ideal rent price.
- Rental Advertising Locations. Advertise in the right locations as some websites draw a quality readership. Read our post on advertising for rentals. Ensure you promote the home and neighborhood with your ideal renter profile in mind.
- Write Great Rental Ads. Read our post on writing great rental ads that draw the best renters.
- Write your Leases Properly. See our post on writing rental leases.
- Verify Background and Credit Check. Read our post on tenant screening. Check with your province/city/state residential rental guidelines to understand them, and to ensure you’re not unfairly biasing your selection.
- Rate the Renters on an Established Scale of Renter Factors (legally permissable ones) so you can pick out the right tenants for you. For example:
⦁ reliability in rent payment
⦁ job stability
⦁ income levels and credit rating
⦁ tidiness and care for previous rentals
⦁ good communications with previous landlords
⦁ did they communicate responsibly or complain?
⦁ did they damage doors, windows, floors, appliances, driveways, create water damage or ruin carpets?
- Employment and Income Verification. Review and validate all information provided by the candidate on your tenant rental application. A phone interview to learn of what they’re looking for in a rental and all legally permissible questions you can ask is a good way to establish their sincerity about renting your house or apartment.
- Check References Carefully. Listen to what their previous landlords say about them. Ask pointed questions about rent payment history, care of the unit, how they responded to a maintenance issue, and how easy they were to manage. Find out about lease disputes, damages, and eviction costs.
Red flags would be a poor reference from previous landlords, dates on the application that were incorrect, sloppiness in filling out the application with non-complete information, and a spotty work record. The worst would be hiding violent criminal and drug use convictions or using a home to cultivate drugs.
- Listen to their Questions. Good tenant prospects as with good job applicants ask questions themselves. They want to be sure your rental is a good fit for them. Their questions tell what they’re feeling, whether they value living in the unit or neighborhood, or what their real priorities are. It’s a snapshot of a responsible and reliable person.
- Have your Custom Written Lease Ready for Signing. The sooner you get them leased the better. Don’t let a great tenant slip through your fingers. They should feel you’re happy to have them as a tenant.
Those tenants who are really dazzled by the property and who also like you could rent from you for many, many years.
Convert More Quality Renters to Long Term Leases
To grow rental property ROI, reduce workload, cut expenses, and ensure maximum profitability, this renter acquisition process is a business asset.
Be enthusiastic about this process and definitely put more time into your rental listing and advertising choices as well as crafting well-written ads.
It might be the right time to open a ManageCasa account and enjoy a modern, automated, easy to use property management system. From automated rent payment and financial management to responsive tenant relations, it’s the way modern managers manage their rentals now.
You can optimize communications and keep tenants comfortable and engaged better with our software. Check out the extensive benefits for property management companies, landlords and HOA management companies.
More insight: Property Management Companies | Software for Property Managers | Find Good Tenants | Sources of Good Tenants | Why do Good Tenants Leave? | How to Choose Good Tenants | How to Write Good Rental Ads | Screen Tenants with Social Media | Tenant Onboarding | Best Appliances | What Good Tenants Want | How to Retain Good Tenants | How to Get Good Tenants to Renew their Leases | Screen for Good Tenants | How to be a Good Tenant | Best Landlord Software | Landlord Apps