Below, you will find what I call the 5 Steps of Screening Tenants:

Step 1: First Contact

From the very first time you have contact with the tenant, the screening process has started. First impressions are always important. Whether you’re the landlord, real estate agent or property manager, the same still holds true.

First Contact is usually by phone. Here you can ask them very specific qualifying questions in order to decide if you should go on to step 2. Inform customers of your up-front rent and security deposit conditions and other important facts regarding the rental that may help eliminate the prospect.

We recommend you make a list or prospect card of questions to ask the potential tenant and have it handy while you conduct your first contact interview. The following 5 questions can give you great insight of whether to permit them to see the rental:

1. Where are they living at the moment? For how long?
(Making a huge change in neighborhood quality is a possible red flag. Also, only living at recent rentals for less than 1 year each, is a concern.)

2. Why are they moving?
(See if they have anything negative to say about their current landlord.)

3. Where do they work? How long have they been there? How much do they make?
(They need to make four times your monthly rent, every month. Just like their residence location, if their employment location has been for only a short time, this can also be a concern.)

4. What will we find when we run a credit check?
(Do they answer nervously? Have a delay? Compare what they say to actual results in the future. Never rent to a liar. Everyone is quite familiar with their credit report.)

5. What will we find when we run a criminal background check?
(Do they answer nervously? Have a delay? Compare what they say to actual results in the future. Never rent to a liar. Everyone is quite familiar with their credit report.)

Please understand that anyone who has a problem answering any of your questions (as long as you ask them politely) will probably not qualify for your rental. Serious customers will want to make a good impression on you and answer all questions happily and truthfully. This process can save you both a lot of time and trouble.

Step 2: Showing the Property

From landlords to real estate agents, we all have our own way of showing the rental. We all need to be aware of certain alluding signs to watch for while evaluating your prospective, new tenants.

1.Appearance – Is the prospect neat and clean? Did they intend to make a good impression? In most cases, a disheveled person keeps a disheveled lifestyle and home.

2.Car – Does the prospect have a nice, working car? Does it look clean? Although we can’t exactly judge people by their car, we should take note of it along with many other details.

3.Attitude and Manners – Does the potential renter behave in a respectable way? Do they show indications of being difficult to associate with in the near future? Did they wipe their feet off when they first stepped into the house? Did they walk into the rental while smoking? You can normally learn a lot about people even before speaking to them.

4.Criticizing the Property – Are the prospects pointing out actual concerns, or are they trying to come up with things to negotiate the price?

5.Yes or No? – Can the potential renter make a decision now or will they have to take some time to think about it? If they know now that they want your rental, did they come ready to give you a deposit and fill out an application?

Step 3: The Application Process

The first thing you need is a rental application. Let the applicant know that their application will be looked at and considered along with others and you will notify them once a decision is made. Let the applicant(s) know that it is very important to fill out all of the application as completely as possible. If you (and we highly advise you to do so) run a credit, criminal and background report on the potential renter. It is also suggested that you accept an application screening fee.

Inform the potential tenant that the application must be returned as soon as possible to avoid the risk of losing the rental to a competing potential tenant. Look over and verify the application thoroughly and look for possible inconsistencies and red flags. When you are pleased with the application, you will proceed to approving your new tenant in step 4.

Step 4: The Approval Process

This is sometimes the fun part, but keep in mind that you are still screening the applicant while preparing them for the next step. We like to congratulate the new tenant on the approval and let them know they came in first place. Also, let them know if you made adjustments such as, overlooking minor credit violations, etc.

This process is also a chance for you to make sure the applicant can and will deliver. Set the time, date and place for your lease signing. Instruct the applicant(s) to bring the proper amounts of monies, identification (if you don’t already have it), and how you prefer to be paid. (Check*, money order or cash).

Be sure to tell your new tenants that possession or keys will be given to them only after checks have cleared. We really try to stick to a money order or cash for first payment.

Step 5: The Lease Signing

It is very important that you have a quality residential lease. You would be surprised at the amount of people who would just sign a lease without reading all of it over! We believe that it is crucial to read the entire lease with the tenants at the lease signing. It is your agreement with them. Shouldn’t you both know what all is being agreed to? As you read the terms of the lease with the tenant, you will be able to conduct your 5th and final step of the screening process.

Does the tenant argue at every item? Is the late fee an issue? And so on.

Also, if you are unhappy with how the tenant responds to you or your lease, you must not rent to this person.

Send us an email at pm@rtserve.com or call us at 440-220-7300

I was ecstatic to learn of what we were just able to do.  By negotiating a volume discount that we get for our new client, we were able to cut their cost on their trash pickup from a monthly bill of $483-.00 to $95.13.  I haven’t even notified our client yet so a call is in order right now, and I will sign off.

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Andy Morris is Broker and Owner of Realty Trust Services

http://www.cimls.com/sale-listing/431349-423-Ashwood-Dr-Lorain-Ohio-44053

One thing to keep in mind is that bad management can lower the value of an income property tremendously because income properties are valued based on the income they bring in.  Great management conversely can increase the value of the property tremendously.  Not only that it is much easier to sell a property to out of town owners when great management is in place, because the prospective owner can be reassured that the income brought in by the current manager will be maintained with the purchase.

Contact us for more information.

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With more than 45 years of investment property management experience our expert team can relieve you of the burden of managing your rental property while saving you some serious money! Call us today at (440) 220-7300 to see how we can help you!

Property management is a growing part of the real estate business.  Yet most brokers have no desire have their agents do property management for a variety of reasons.  In this article we talk about ways that agents can profit by working with great property managers.

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With more than 45 years of investment property management experience our expert team can relieve you of the burden of managing your rental property while saving you some serious money! Call us today at (440) 220-7300 to see how we can help you!

If you have properties consider giving yourself the gift of some extra time and peace of mind.

However please don’t forget the greatest gift of all was a divine one.  A great sacrifice for the saving of our souls.

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With more than 45 years of investment property management experience our expert team can relieve you of the burden of managing your rental property while saving you some serious money! Call us today at (440) 220-7300 to see how we can help you!

Salvatore Friscia, a long time property manager recaps a conversation with a down on his luck business owner that mentions off hand he plans to do a little property management on the side to make ends meet.

This is of course a very scary thing that one would think of property management work as a kind of contingency plan.  If you are a owner, you want a professional team with a plan and the resources to implement the plan with your property.  Repairs need to be taken care of in a timely manner.  Your money needs to be handled carefully and you need up to date reports of how your assets are being handled. You need someone who can screen tenants and deal with their complaints professionally.

Steve Aubertin an experienced manager commented on that blog:

In 2005 I began managing a 13 unit pre 1978 multifamily apartment building for a property owner that was new to the business. To make a long story short He thought I was a little too strict about the rent being on time. He thought if I was “nice” his tenants would be happier and get caught up. I tried to explain to him that it was a safer practice to put out notices as soon as the rent was late if the tenant paid it could always be canceled. Unfortunately for me he decided to rely on a tenant as the resident manager, then he tried a couple of other sales agents over the next couple of years.

Finally, about a month ago I got a phone call and they were ready to have a professional manager. The building had a 40% vacancy rate and half of the current tenants were between 6 to 10 months in arrearages.

I have a lot of work to do to get this building back on track but it does make my fee look cheap when you compare it to lost opportunity and rent.

Steve’s comment summarizes my sentiments on this subject well. For years before getting into property management I wanted too. However I was well aware of how risky for my clients it would be to be a part time property manager. So as a company we delayed doing property management until we could put together a team of experienced individuals that we were assured could do an A Plus Job at servicing clients.

We hear a lot of stories of people coming to us after having had a friend of their managing the property and now the property is vacant and destroyed and we have to try and get in their and make it profitable again. It is amazing how quickly a property can go from hero to zero with management that is not quick to respond.

A landlord with over 75 units will be online for your questions and to explain his method for lowering his taxes. Also we will have several other experienced individuals that will share their expertise in this area. We won’t hold back and will even reveal our secret weapon for getting our property values lowered. If you are a landlord you won’t want to miss this.

We haven’t locked down a date yet but we will have this webinar some time before the 1st of December when people can start making the application to lower their taxes.

To receive early bird notice fill in your information below:

If you are seeing all the great deals out there and want to get a great rental property before all the deals disapear, my advice is not so fast. The waters here are great for surfing but they are infested with SHARKS.

For instance it is not entirely unheard of to purchase a rental in Lorain County for $10,000 put $10,000 into it and be able to rent out the property for $700 per month. At first glance that means you will get your original investment back in 2.3 years.  Not bad.  We have seen better deals than that come across our desk and lesser deals (See our web form below join our investor list. ). However if you don’t know the area you might be in for some 30% plus vacancy that could significantly effect your profits. Or maybe you thought you could get 700 but after 6 months of trying you have to lower it to $450. Still not a terrible deal compared to many investments today but maybe not as good as you could have gotten.

1. Location, location, location.
Carefully consider exactly where you are buying. There are many out of town investors that look only at the numbers. However if you don’t know location you need to make sure you have someone who does helping you understand the benefits and drawbacks of a specific location. Some areas look great but simply are not desirable for a whole lot of reasons. Other areas don’t look good but actually are in demand.

One strategy for evaluating location is to consider the target market you think a home will be for. Is this home likely going to attract a you family based on the lay out and size? If this is the case then proximity to good local schools will be something for you to evaluate.

Other factors for your consideration are:

• are crime rates
• percentage of owner occupants on the street
• vacancy rates in the area
• are neighboring properties well maintained
• availability of parking
• is there any good public transit nearby
• what are the local amenities (shopping, recreation centers, parks, golf courses, restaurants, banks)
• how nearby are public service hubs like fire stations and the police station

Also consider location in the cost of landlord insurance. Your zip code effects your insurance rate big time.

2. Get on the knowledge train…
Make sure you understand the processes and legal obligations involved in renting out a property. One small slip up in how you advertise can mean a fair housing violation for you. Fair housing violations are very very expensive. There are also numerous requirements for paperwork to cover your tail and make sure you you have expectations properly set with your tenant. Do you know what lead based paint disclosure is? Ohio law requires it in properties built before 1978.

Make sure you understand the true costs when purchasing a rental property. They can bite your arm off. One benefit of the current market is that the low prices of homes are making cash purchases a reality for many potential investors so the risk of jumping in is much lower. Even if costs eat you alive your return on investment will likely be better than than the stock market or a CD.  Still it is very possible to lose money with an investment property and it is important that you do your research (hint- an investment property specialist can really help here- see below).

The following should be factored in:

• Vacancy rates for the area
• Security system while renting
• Eviction costs
• Cost of getting property ready for rent
• Marketing cost
• Maintenance cost
• Management cost (You can do it or someone else can do it but it is still cost to factor in either way.  Keep in mind the cost you incur when you hire someone who isn’t a professional or do it yourself.  It dwarfs the cost of professional management which we believe will pay for itself many times over.)
• Landlord insurance
• Money cost- If you are getting financing (which we don’t recomend) then you will have your interest cost as well as payments on principal (which eat into cash flow).  If you use cash then you have to consider the oppurtunity cost of tying up your money in a property.

3. Insurance

Rental property insurance is an absolute must.  If you are renting your property out then you certainly will not qualify for a standard home insurance policy.  Vacant homes that are not rented are even a bigger insurance hassle and you want to make sure that you are on board with a good insurance agent.  Email us for a referral (pm@rtserve.com).

Also you want to make sure that you are properly insured to protect your assets.  Although there are many other asset protection strategies in the form of separate entities like trusts, LLC’s etc (contact us if you want an attorney referral for this at pm@rtserve.com).  Our company has a $1,000,000 E & O policy and our Investment Property Management Company has $1,000,000 in insurance for repairs made to our clients properties as well.  For a Landlord an inexpensive umbrella policy would help protect against the freak lawsuit that could otherwise wipe away all the assets you have worked so hard to acquire.

4. Maintenance and upkeep
You’ll need to inspect your property at specific intervals and make sure that the tenant is not destroying property faster than what you might expect from normal wear and tear.  It is vital to make sure that a property is inspected reasonably soon after a tenant first moves in just to make sure they aren’t quickly destroying it.

Failing to maintain a property can result in injury to the occupants and then a lawsuit.  Also an unmaintained property is difficult to rent out to good paying renters.  It helps to have a reliable contractor on hand who can quickly do any work necessary (hint, hint… we can help with that- this is one benefit of professional maintenance.  and you won’t have 1AM calls for help).  For instance plumbing repairs and furnace repairs must be done immediately in order to avoid a certain and expensive vacancy.

5. Finding GREAT tenants
Promoting your property is an art in it self.  Different areas need different marketing techniques to find the best tenant for the area.  Also some areas will simply attract a different kind of tenant than other areas.  It is important to understand various areas and the best marketing for each area as well as how to screen tenants(see our tenant marketing strategies article here).

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With more than 45 years of investment property management experience our expert team can relieve you of the burden of managing your rental property while saving you some serious money! Call us today at (440) 220-7300 to see how we can help you!

When looking to lease out a property and find the best tenant you need to keep in mind the following and vary your strategy according to the local market you are working in and the type of property you have.  It helps of course to have the help of a professional team with experience.  However if you want to go it on your own here are some guidelines and strategies that will hopefully help you manage this process.  Keep in mind we do have a marketing and tenant placement service for those who want to do the management themselves.

Certain areas will simply attract a different kind of tenant than other areas. It is important to understand various areas and the best marketing for each area as well as how to screen tenants.

For lower income areas (properties with rents $300 to $850) Craigslist along with aggressive handwritten signs (if necesary) might be the way to go for marketing. Also in many lower income areas you won’t find a tenant with good credit. You have to screen those tenants based on their eviction history, criminal history, landlord referrals and income. Make sure you check those references. We have a grading system for quickly grading low income renters. This is important because competition is brutal. If you can’t give an affirmative answer with in several hours your best in class low income tenant may have signed somewhere else already. In many lower income areas the competition is so fierce that you won’t be able to attract a tenant with out discounting the security deposit.

For higher end areas (properties with rents 900 to 2,500) the process is much different. Those properties need to be put into the MLS as well as numerous other websites including Craigslist (which is still very useful). Tenants may come through outside agents who represent them. The good news is generally there is a much higher quality pool of tenants to choose from. You may be able to require great credit and a full security deposit. However you have to sell good prospects as well as they have a choice. Rental prospects may in fact be interviewing and screening a landlord or management company just as much as the management company is screening them. They will make a choice based not just on rent and whether they like the property but also they want to know that a professional is managing the property and want assurance that the property is going to be maintained in a timely manner and their needs will be dealt with professionally (hint- We actively market to clients not just our properties but the assurance that we as a company have a system to take care of them).

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With more than 45 years of investment property management experience our expert team can relieve you of the burden of managing your rental property while saving you some serious money! Call us today at (440) 220-7300 to see how we can help you!