Who Are the Best Types of Renters?
If you’ve read many of my posts here on the ManageCasa blog, you know I’ve highlighted tenant acquisition as a foundational task of rental property managers.
It’s a simple truth that tenants are the core of the business. New surveys and reports show managers are getting that message and are making tenants the focus. This is a financial factor.
If you’re attracting and leasing to the wrong tenant, the long term damage will be significant. Don’t provide a great rental experience and your rent prices will trend lower and tenant turnover will grow. For mid to large scale property management companies, the effect on the bottom line is significant.
Finding the Best Tenants
Categorizing tenants doesn’t come without its own controversy however, since such actions might be considered discriminatory. Whether knowing why your tenant wants to rent from you is legal or not, it’s good information that could relate to how long they want to rent from you and whether your services and rental units are relevant to them.
Being blind to your tenant’s true intent and interests isn’t wise.
Tenant interviewing and screening is all about taking the guesswork out of finding great tenants. Sometimes a safe tenant processing system isn’t ideal. You need more certainty.
Ability to pay + desire + reliability is a safe formula
My Smart Move, a tenant screening software created 6 different categories of renters. I like the simplicity of their framework shown in their infographic which segments renters 5 ways. From self-reported responses they described them as:
- Low Budget Lifers – budget conscious, not high tech, low maintenance, but prefer independent landlords
- Treasure Hunters – open, transparent, particular, take care of the unit, and seek a personal connection with the landlord
- Pessimistic Panickers – desperate, accept as last resort and feel renting is a competition, could be a poor planner and money manager
- Nomadic Yuppies – highly mobile, digital savvy, follows rules, picky and detailed, but perhaps not a long term candidate
- Scorned & Suspicious – keeps information private, distrustful of agreements and perhaps landlords, not treat rental as their own, less likely to maintain well, are cautious and careful with money, and they prefer large property management companies.
I had to laugh after reading the infographic post, because I’ve been all 5 of these myself. I think most renters are. Yet, one of these types might be the most accurate.
So Who is the Best Type of Renter?
Off hand however, the Treasure Hunter seems to be the type that would stay if they really thought your unit was their dream rental. They have the highest rents on average yet have average finances it seems. The Nomadic Yuppies are interesting too. They have the best education, higher income, higher credit score and are willing to pay more rent. Unfortunately, they won’t stick around.
The end truth of this may be that the rental unit itself and price might actually dictate who the ideal renter is. The treasure hunter is likely not going to like a dump whereas the low budget lifer might be content with it. Which type would accept higher rent?
Most tenant screening systems look for a high credit score +700, credit record with no negatives or missed rent payments, good debt to income ratio, few moves, a stable work record, and good references.
That general process is safe, yet would it be a better idea to target the type of renter who would value your rental in particular. They’re all applying for different reasons (price, availability, location, amenities, etc.) yet their background suggests they’ll be moving on because they don’t value the unit, building, neighborhood or the renters there.
Success in tenant acquisition comes from good targeting so you lease to a tenant who really does want the unit.
Are your own qualities as a landlord going to work with your targeted renters? Are you transparent, a good communicator, responsive, helpful, appreciative and respectful? The answer is that you are with some of your tenants and not with others. If you’re too busy, then ManageCasa property management software can help compensate and give the service expected by today’s renters.
If you know more about the tenant going in and why they want the unit, the more likely you are to understand the relationship and get the best business results.
Tenant acquisition is a vital business task for landlords and property manages which can have major impact on rental property ROI. See more on how to do tenant screening online, and how to attract good tenants, choose tenants, write a rental advertisement, write a great lease, and help them be a good tenant.
Good luck taking your property management company or startup to market leadership!
Take a good look at ManageCasa’s amazing property management software now. Renters will love the tenant portal and you’ll appreciate how you can manage communications, rent payments, and tenant marketing so easily.
* Come join us at NMHC’s Annual Conference in Las Vegas on November 1st. Let’s talk about your property management challenges and where your company is headed.
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