Attracting The Right Tenants

by The Investor Today

Let me tell you something about being a landlord? If you don't know what you're doing, it sucks! Seriously!

It's the number one reason I always use creative techniques like lease-options, owner financing, etc. to have my properties managed for me. There's just nothing worse than fixing a toilet at 4am for a small cash flow surplus.

However, there's a lot of benefit for the long term acquisition of buying and holding properties for rent. As long as your property produces positive cash flow, buying and holding can be an effective wealth building strategy. This is especially true if your properties are in an area that has above average appreciation in value over the long term.

Here are a few things you can do to attract the right types of tenants:

Marketing

Have I mentioned lately that marketing is important? Just think of the obviousness of this. When viewing these two ads, which do you this is more likely to generate high quality tenants?

1. House for Rent $600

2. Beautiful 3Bed/2Bath Home Across From Park - Only $600

Make sure to advertise your rental with an eye catching-headline on a local real estate classified site. The more people you have to select from, the greater your probability will be for finding a solid tenant. It's obvious but people miss this point.

Be as detailed as possible in your marketing efforts to restrict to the tenant type you want.

For the Love of God, Screen Your Tenants

Don't select the first tenant you like simply based on your gut. Stop for a second first and allow your emotions to calm so you can think clearly. Check their landlords in the last 2-5 years, check their employment history and so on. It's the simplest measure of knowing whether or not your tenant will perform for you in the future.

Secondly, don't be afraid to include that you will do this in your marketing efforts. You can weed out poor tenants right from the start by just mentioning this right in your ad.

Build Demand

When someone calls you up to see the rental property, don't drive in your car at the first available opportunity to show them. Schedule a time the following day. Make sure to invite as many people at the same time as possible. Have all the interested parties fill out a rental application and select the best available tenant.

Have a Clear Set of Rules and Expectations

A friend of mine is a teacher and has excellent classroom management. She spends the first week being "strict" and enforcing clearly what her expectations and guidelines are. However, after that first week she rarely has a need to maintain the same level of strictness. Run your business the same way. Your tenants should know exactly what is expected from them before they move in.

If you properly identify the rules (maintenance, rent due, etc) and the consequences of not following them from the outset, it'll be much easier to maintain the situation afterwards.

Don't Become Friends With Your Tenants

There's a fine line between being professional and being friendly. Your rental property is your business. You own it to generate income for you. Don't be overly friendly with your tenants because it will be just too easy to let them slide for money owed. Beware of this trap. Send notices written and delivered by registered mail rather than by friendly phone call. Follow up with them by phone after they are physically received the mail.

Managing rental tenants can be a hassle if you don't know what you're doing. However, if you enforce clear expectations from the beginning you can easily get your property well maintained to produce strong positive cash flow as well as strong appreciation.

Do the extra work up front and often and managing afterwards will be much easier for you down the road.

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Matthew David

"The Investor Today"