Buying Investment Property And Screening Potential Tenants
My friend Erick Blackwelder has posted a helpful video on how to screen tenants for your investment property.
The most powerful words you can use to setup a healthy relationship are “Let me tell you how I work.”
Say it to yourself in the mirror as many times as necessary until you get comfortable saying it.
Give them an application. Tell them to fill it out fully. Tell them, “Be sure to put down the names and phone numbers of previous landlords because I will call them for their recommendation and their reference. That’s not negotiable.”
In your application you need to have included a clause that gives you permission to pull their credit report from the major credit reporting agencies.
There is usually about a $30 fee for running a credit report and so you will need to tell the prospect to bring with them a check for $30 for the credit check when they return to you a completed application.
Now Erick, I love the guy, no disrespect Erick, but you’ve been drinking too much of that mean juice. In California, and in my market which is the Central Valley, if you tried to demand that a prospect pay you with auto-debit or look elsewhere, EVERYONE would look elsewhere. You would never have a tenant for your property. You might found one after a year, but your ROI would be terrible because your property would be sitting vacant far too long.
Come on Erick, be honest. You’re an older guy, you’ve rented to many good tenants over the years before their was such a thing as auto-debit. Now I know you’re not saying that you never should have rented to anyone in the past that didn’t do auto-debit. So why do you recommend others do that now? It’s not realistic. You have to get your property rented as fast as possible and doing something, anything, that would make even a month or two go by longer than normal for a vacancy can be the difference between a profitable property and one that is losing money.
Try and get someone to sign up with your auto-debit method but if they refuse and want to pay by check each month, then that’s fine to. I know of a lot of people with excellent credit that have made very good tenants that just don’t want a computer to automatically pull money from their bank account, especially for a “big ticket” item like the rent because they worry about over drawing their checking account. This is a very real concern when dealing with an auto-debit for something as big as rent.
With that said, check out the video from my “hard nose” friend Erick, it’s good stuff.
Duration : 0:6:20
Tags: auto debit, buying investment property, credit check, credit report, landlords, major credit reporting agencies, pull their credit report, running a credit report, screening tenants
July 16th, 2009 at 8:09 am
Hey Pal, hope all is well.
As the old saying goes, “All real estate is local.”
Auto-debit for rent, mortgages, and car payments is common in Northern Virginia, just outside Washington, DC.
Our area is chock-full of IT contractors, government workers, and military.
All rely on maintaining security clearances to stay employed.
Late payments, low credit scores, can jeopardize their clearances. No clearance, no job.
Military folks are accustomed to auto-pay because they often travel to other places on 2-6 month extended duty (TDY). IT contractors like electronic payment.
You may be surprised to find out that folks in your area MAY be more receptive to the idea than you know.
The key is telling folks up-front, before you show them the property, “First, let me tell you how I work.”
If they balk at auto-pay, let them move on. Don’t waste the gas showing the house.
Say hi to the family.
Erick
October 18th, 2009 at 6:53 am
“You may be surprised to find out that folks in your area MAY be more receptive to the idea than you know.”
Erick buddy, you’re the man but I have to disagree with you.
I’m involved with managing over 300 homes in my area and no, not one of them will do an auto-debit. Maybe in some, pardon my frankness, white, upscale neighborhood in Northern Virginia this is common place, but in California, where 1 in every 7 people in the U.S. live, and specifically the Central Valley, this falls flat on its face.
We even tried to market a company called PayLease in this area that essential does an auto-pay and not one person signed up with it in the 1 year we tried to market it.
No, I know my area well and I can tell you that telling people to auto-pay or move on, in my area, would be property management suicide.
You are a man ahead of your time and like you said, all real estate is local.