The civilized world is made out of property. And that property needs quality management. There is a reason that there is a market worth more than $101 billion every single year in the United States alone just for property management!
Property management entails a huge list of varied tasks. However, one of the most important tasks is screening prospective tenants. The improvements that you can make to your tenant screening process more than pay for themselves in the long run.
So what exactly should you be focusing on when it comes to accepting or declining a prospective tenant? Read on to learn all about the most important signs to look for when you are considering a possible tenant!
The Importance of Finding the Right Tenants
Every task that a property manager has to do is important. However, there is still a tendency for some property managers not to realize what a big deal tenant screening is.
There is an important principle called the Pareto principle. It applies to property management as well as to economics and almost everything else. It says that 80% of the results in a dynamic tend to come from just 20% of the contributors.
In the case of bad tenants, that means that probably only around 20% of your tenants end up causing you about 80% of the extra work that you have to manage.
This principle makes a lot of sense to property managers who have had problem tenants who have caused a lot of damage or hassle for them to have to deal with.
Although this sounds like a negative observation, it actually has a silver lining. That means that if you can avoid approving just half of the 20% of tenants who end up causing most of your work, you can eliminate a huge chunk of extra labor.
That makes proper tenant screening an investment that pays disproportionate returns.
Strategies for Finding the Best Tenants for Your Situation
Many property managers meet great perspective tenants who they hope will become their real tenants. However, even after they approve them, those tenants often end up going somewhere else. It might sound counterintuitive, but you should actually be treating every prospective tenant like they are your ideal candidate, even before you know them.
This way, the tenants who end up making it through your application process will be more likely to choose you when you accept them. It may also mean that other tenants also want to live in your units, but you can always tell them that their application was not accepted.
Early on in the application process, consider sending a thank you note to prospective tenants. That shows a level of attention and conscientiousness that will make a good impression.
On top of that, make sure to treat every applicant with complete respect. Make sure to show up to any unit showings on time.
If you have to reschedule, make sure to apologize. You can show the same basic courtesy if you take too long to respond to messages. Ideally, however, make sure to respond to all messages courteously and as quickly as possible.
How to Properly Accept a Tenant
When you accept a prospective tenant, it is often best to do so by email. This strategy allows you to send all of the important follow-up information at the same time.
Of course, you should tell them that you have accepted their application. On top of that, you should get clear with them on details about their potential move-in date and processes for collecting rent and security deposits.
In many cases, it is also a good idea to immediately send the rental agreement over to them. That way, they will be able to accept immediately rather than have to wait around and consider other options instead.
In many cases, you can reasonably ask for them to make a decision within a certain time. It is generally acceptable to offer them between one and three days to tell you what their decision is.
How to Properly Reject a Tenant
If you have to reject a tenant, it is important that you do so as smoothly as possible. You do not want to make them unnecessarily upset.
The first thing to do is to inform them of the rejection as politely as possible. Standard professional business language includes apologizing for the unavailability of the unit for them and an expression of gratitude for their application.
At the same time, make sure that you do not lie. Even if you want to make them feel better by telling them that the apartment simply is already occupied, it is not legal to do so.
In general, it is safest to avoid telling them any particular reason why you rejected their application. It is legally necessary to tell a prospective tenant if you rejected them because of their credit report. Other than that, it is best not to mention any reason at all.
The more that you know about prospective tenant red flags and how to vet prospective tenants, the more you might be interested in learning more about the fine points of how to define “prospective tenant” and end up with the best tenants possible. Check out these tips to learn more about how to reject a prospective tenant or find the best tenants to accept.
Understand How to Screen Your Prospective Tenants
We hope that some of the ideas in this brief article about how to screen your prospective tenants have been helpful for you. Property managers have a long list of tasks that they have to juggle. As a result, many of them do not give tenant screening the attention that it truly deserves.
Every improvement in your tenant screening will pay off in easier property management down the line. To keep up-to-date on the latest developments in business, technology, and more, take a look through our other articles!
