What is 1 + 1?

If you can solve this in your head, you pass!!!

Obviously this is a joke, but not far from the truth. The people contacting me anymore aren't too far above this level.

So far this year, I'm getting hammered with turnovers and rents are dropping. Not the best combo. The people coming at me for units regardless if its an efficiency or a nice house are just awful.

I may need to lower my criteria a bit.

"I may need to lower my criteria a bit."

I understand why you are considering this, but let's first take a look at what your criteria are and see if they are reasonable.

When I get an app, I'd say top reasons are poor credit, no employment or insufficient employment. (Even though prescreen says otherwise)

Also a prospect with good or just above ok app and roommate who doesn't amount to anything with a garbage app. This has been a big one lately.

Evictions and major criminal are screened out when possible before even shown the units, so no worries there.

NE, okay, there's no way you should consider reducing your standards for things like insufficient income or no employment. Laura is 100% on the money there, as is, no money = no keys!

Insisting on sufficient (min income 3x the rent) stable (90+ days on the job), garnishable wages has decreased my evictions considerably. Do NOT let that go.

Bad credit can be dealt with. 2x the security or the max you can get in your state. If needed, get creative and go 50% on the deposit but add 10% to the monthly rent in perpetuity. They get flexibility, you get made whole in 5 months and forevermore thereafter. The reason behind the bad credit can also be considered. I rented to a gal once who had a 525 credit score because she had one credit card that was around $200 past due, but had no other credit. I wasn't terribly concerned with that. A rock solid co-signer is my last option, but it has worked out several times for me. I define rock solid as squeaky clean credit, lives in state, minimum 6x the rent income, and owns local real estate. Solid, stable, sufficient odds they will pay if tenant fails to pay.

My only NO-GO on credit report is if they have 3 or more charge off/collections within the past 2 years, or if they have unpaid utility accounts, eviction judgments, or other judgments that could show up and clobber their income via a garnishment. I also won't take anyone who is currently being garnisheed for any reason: I don't want the other creditor getting first dibs in case I end up having to garnishee.

What prompted me to post this, was another tenant texted this morning and wants to move out early. This is one of my hardest to rent units. It's already drastically under market and these two tenants, who were qualified by the way last year, can no longer afford it together. That's two tenants with jobs in an already under priced unit. It's a money management problem is what it is.

What else can I really do?

I can't drop the price anymore to keep them in there. Once it comes back on the market, I know it will be a bum magnet and take forever to rent. However, it's in a six unit building and the building overall performs very very well.

I just hate to lose a tenant anymore, because it's so hard to find a good one to replace them.

And it's not just this particular unit that is experiencing the same kind of prospects looking to come in. Just the example.

At the same time also, I stand here and look at the flip houses and then I look at the rentals and then I look back at the flip houses and I look at the rentals. I have to tell you, I make a lot more money with a lot less headaches in the flipping business than I do the rental business.

I always feel despair about an upcoming availability as I go through app after unqualified app (well, pre-screen questions really.)

My standards are lower than yours. I don't care about credit score at all unless there's something really egregious on there. I care about the ability to pay going forward much more so I do not lower my minimum required income ever.

I care about evictions and criminal history too. Because those definitely reveal a lot about a person's character and cooperativeness.

MOST of my tenants have had their jobs less than 90 days when I rent to them, some of them only have an offer letter to prove income. That's because there aren't enough qualified people living here for the very few good jobs, we have to import them from other areas!

I try to make it easy for people: online apps, online payments, online lease signing, pets welcome, lock-box entry on move-in day if necessary.

NE PA,

Having a vacancy is no good.

Renting to a deadbeat is even worse.

Yes Fred, I won't rent to deadbeats.

I hear you NE!

We all have that "dog" property that is a pain to rent. I'm not sure what it is about yours, but I'll tell you about mine. It's a converted 2 car garage next to a SFH, so there's also a shared driveway and the house tenant gets the yard, basically. The ceiling is low (6.5 foot), no overhead lighting except in the kitchen, and you have to walk thru BR 1 to get to BR 2 because they're both in the back. AC is window unit only. Heat is free standing gas stove. So not a lot of "Charm" to it.

Still, I got it rented for $450 by being ultra accepting (and marketing specifically to) pet owners. Turns there typically take 2 weeks, though, which draws out my average vacancy days. I'm at 3 on average, but if I didn't have this dog I'd probably be at 2 or less.

What makes it worse is I overpaid for this unit back in 2007 when I bought it. Back then I only required the 1% rule. Evaluated today, it's about 1.6%, so it's better than it used to be but still a bit of a dog due to hassle. I think about selling it sometimes, but I really like the house that's on the same lot, and I've put some money into upgrading the electric panel from fuse to breaker and redoing the master water meter and supply lines/main drain lines. So it has a lot going for it and the rents are ticking up steadily each year.

Sid, a three day turnover would be a dream come true. It is nothing to sit for two, sometimes three months here. And I said that before. I'm used to that, I just take it personal when it happens. (Where and how to improve?)

WMH working less than 90 days and not coming from a job where the they were there for a year min, is usually a no for me. The main employer, Target DC lets lots of non-performers go. So someone just starting there is a no. Plus I don't want my whole tenant pool to be w/ one employer if I can avoid it, and I have a few already.

How do you address if the less than 90 day tenant looses their job? and does that happen to you? I am ok w/ letter of employment for a salaried job, but confirm the conditions of employment. I want to know what the probationary period is.

I typically take holding fee when I'm confident I'll approve them and full rent at lease signing. People are just not following through with their end of the process and it's not about the funds.

I see the same thing as NE, rents are not holding steady. Why aren't these applicants gaining traction in this supposedly stellar economy? I know we all bemoan their spending habits, but I think people have no long term awareness anymore. The most recent approvals have not had 1st n last so I added $25+ on to rent towards last months rent. We can't collect 2x security anymore in NY and they don't have it these days.

Uncertainty in the economy affects not only the stock market. In uncertain times, people don't make changes in their lives, like moving.

Just as I would do in the stock market, I suggest that you ride out the uncertain times and wait for better times. That means accepting less until the times are better and then trying to make that up. I recommend dropping your price to bring in more applicants and to make your offering attractive to the class of applicant that you want. Then, when the economy recovers, you can try to regain your price momentum, and average your profits over both the good and bad years.

I wouldn't consider poor credit as a disqualifier for your efficiencies.

Since you can’t got “down” further, can you offer something to “catch” the good ones?

I offer $99 deposit but they must have good credit/LL references.

I have in the past also offered to pay for a moving truck. (I won’t pay for the mileage, however). The most expensive moving turck used to be $75 which is nothing compared to a vacancy. This has worked well to snag the good ones because no one else offers it. I got the idea for the moving truck from a local realtor who has a big truck with her picture and name on it, and it says. “Buy a house from me and use this truck!”

Just a thought.

Your state gov't is running the GOOD people off to GA of all places.

We have an ad running now and we've had 100's of calls. I'm sorry but it true. I'm not returning all I've gotten-- just culling through those that leave a coherent message. When they say we're just moving here it's a no.

October is the last month of the year where we have scheduled vacancies. We leave our calendar open for Nov and Dec because we like the holidays off. 7 leases are up and 2 no pays from Sept. total 9 possible empties. 4 have renewed at a rate increase we thought would be a no go.

3 have left for new homes, 1 was evicted by sheriff and 1 called to say there gone. 2 have been leased already. One is ready for showing. One is being worked (had a long term 4 yr tenant) redoing the whole inside and skip out has roaches up the gazoo so we're bombing that as we work on others.

NE, your business will be far worse off after lowering your standards than it is now.

You have posted this bleak situation that is your market on different occasions. I advise that you work on your company image (from a prospective tenant viewpoint)as a housing provider.

My hunch is that the desirable tenants (relocates) are choosing to deal with property management companies instead of NE property. Thus, you are left with the basket of unqualified, unmotivated prospects.

Last I checked don't have property managers here. Too rural. I'll check again.

NE, in my opinion, the crux of your true challenge is in the following words you first posted -

"The people coming at me..."

I am most successful NOT when people are coming at me, but the other way around... "When I am going after the ideal people I want.."

I know you have heard me speak several times, so I believe you understand "in theory" the concept I am sharing (which is an entire training module in itself). However, by the words you still use to describe your challenge, I guess I still have not conveyed the concept to you in such a way so that the light bulb has gone off and you are able to truly apply the concept.

Because once you fully get the concept, it will totally revolutionize your whole thinking and approach toward filling vacancies (and yes, even in your neck of the woods:)

My name is Jeffrey and I am your friend.

Well, I hope my current tenants stay when there lease renews in February. When they applied to rent, they were saying they want to buy a house. All of you are worrying me. Are they buying a house? My thoughts also are, people are not being taught or have good examples from there parents about being responsible or budgeting. People are also not held responsible, which is why they don't change there bad habits. They don't get taken to court, they file bankruptcy many times, laws are past in there favor, ect....

6x and therein lies the conundrum! You want the best and the best want to buy. They know renting is a losing game. So going after 750+ CS's sounds great but then your turn keying property every year. That's no good either.

To us we want borderline-- as you have seen me post before.

So for us: we don't want the best-- we don't want long term-- we don't want new people in town. We have a target market.

That leaves people who are making ends meet monthly -- working long term jobs they can't quit -- looking to get out of apt's and will tow the line to stay in a place.

myob, you said "So going after 750+ CS's sounds great but then your turn keying property every year. That's no good either." but, you also don't want long term. How does that work?

If you don't want long term tenants then, are you not turn keying every year?

6x I keep the rentals fresh by implementing rent increases. We don't want entitled residents (aka long term) I want them gone on my terms and when I'm ready. My rent calander is active and each month has those who are 1st time renewers and then 2 or 3 year ones mixed in. Lets face it the longer they're in there the more they require baby sitting and more requests come in for maint. We get in there around 3 or 4 yrs and redo the whole place. You would be amazed at how fast you can turn a property when the tenants have only been in there a few years. vs many years.

Here in GA our new law this year is if a tenant complains about maint issues you can't evict-- so why should I let it get to that point?

NE,

Rather than reduce the screening criteria I changed the entry requirements:

(premise - people don't have money)

-move in with the deposit and a written plan for the rent

-PayDayPlanRent. They only need a week of rent at entry

-Jeffrey's teaching on deposits - reduced deposit with an extra $50 on the rent.

I'm in a funny sort of market. I have rentals in two towns that are about 15 miles apart. One town is near the NJ border while the other is further in. My rooming house is in the town near the NJ border and demand is brisk this time of year and slower in the summer. I also rent rooms and apartments in the building in the other town and it usually takes a couple of months to fill a vacancy and the demand doesn't seem to be brisk at all. I can't figure out why as both areas are comparable. I've had on-going issues with vacancies with the rooms in this other building which I believe I've stabilized now with better tenants. The difference is that these folks have better and stable income. For me income, clean criminal and no evictions are key. Where I've had issues is with people with shaky jobs that they don't care about so anyone with a throw away type job or someone with 2-3 jobs in the span of a year doesn't get off go. Credit is secondary depending on the problem.

If the tenant pool simply isn't there, it may be time to sell.

Small Potatoes, if I didn't take the incoming people with offer letters I would be letting go some of my best candidates. Companies who pay to import people aren't doing so because they intend to let them go! They are doing it because the local population can't pass the drug tests and/or the "showing up to work on time every day" test.

Took a guy from NY who had just signed on with a local HVAC company. Yes, he changed jobs shortly thereafter - to a much better opportunity. Great tenant. He's going on third lease soon.

Have a woman who moved here from GA to manage the Bakery Department of a newly-opened chain grocery. The company brought her up here - she's been with us two going on three years now.

Jeffrey, I understand what you're saying,I just don't know how to find them or where to look. I don't know how to contact someone who lives half way across the country and looking to move here for some sort of management position, etc.. Other than internet listings anyway.

Moshe, dropping my price is what happens most times. Gets them filled.

I also offer the $99 move in special, that shaves 100's off the move in price and it still doesnt speed up the process.

I really think that 2 month average vacancy in my area is the norm. Comparatively thinking that I need to expect 2-3 day turnovers like hot markets may be part of my problem.

I hear you NE, however, how many possible target markets have you identified? How much time have you really given to thinking it through on how you can possibly reach them or better yet, establish relationships with those who are already in contact with them and can help you reach them. I'm not saying it's easy at first, but "thinking it through" can pay you very high dividends.

Even with the one example you gave of reaching those who are looking for a management position... You are a smart guy. I bet if you really took time, you can figure out how to make contact with key persons in the local companies who are recruiting the very ones fitting your ideal profile coming into your area. Or with Realtors, the ones who make their living dealing with people relocating to your area (to just give a couple of examples).

This business works on a whole different level when you take time on a consistent basis to establish important key relationships. Trust me, taking time to establish the right relationships with key individuals is just as valuable if not MORE SO than the time spent doing the manual labor on your properties...

The Ultimate Challenge.

Filling rental homes with Qualified, Responsible and

Co operative tenants,

will (always) be a challenge,

no matter who you are, or where you operate.

Most LL's / PM's settle for Less, to keep the ball rolling.

The more units to fill the Bigger the challenge.

Most of the employers that I've contacted in the past don't have a human resources department and/or don't allow rental flyers to be hung in their break rooms.

For the management moving into the area, that type of tenant would be reserved for certain type of property. Most apartments are going to be rented out to blue collar in locals.

To fill my higher end units with management type people, the only other thing I can really think to do that I have not done yet would be to contact our chamber of commerce and see if there's any way for them to get me in touch with people in the larger businesses here

locally.

NE, do you have a reputation at all? Good OR bad, do people know about you? As a landlord, as a property manager? Do you departing tenants speak well of you?

Do you have a digital presence? Do you have a Facebook page for you AND/OR your business?

How do people find you?

I own several apartment buildings near to a City "Redevelopment Zone". With vacancies coming up I knew there was going to be issues. For one, tenants being ejected from the properties being demolished were all looking for new places to live. Just because they have a few bucks in relocation money they thought they could qualify or scream discrimination loudly. And the City had their ear.

So to avoid this kind of traffic, I couldn't put a sign on the property advertising vacancies. I couldn't advertise in local new papers or flyers. I had to think out of the box on locating superior applicants.

I remembered all of the advice and lecture methods learned over the years and put them in play. From conventions, lectures, Mr. Landlord meetings and new letters. Asking other good tenants if they had friends looking to move. On line adds where only the computer savvy would look. Bulletin boards at local employers, etc.

Possible move-in incentives like a tech gadget... iPad, kindle, or gift card. Or an incentive after a 1 year lease is completed, like upgraded kitchen faucet, ceiling fan, etc... anything that improves your property while giving something for them to enjoy.

Also, maybe banners, or those flags that catch the eye of passers by.... if appropriate.

Also another thought, what about renting to room mates. Charge a room rate... if it’s a 2 bed unit, take 60% for 1 room and rent the other for another 60% for 120% total.

I think you absolutely need a Facebook presence for your business. Even if you do nothing with it, it marks you as a legit business in the area. Increasingly people search the web for rentals, often starting with local FB pages. You have to be able to post on those pages. Will you get great candidates? No. Often you will just increase traffic. But you will also increase recognition and that will help you attract higher quality tenants overall.

Just checked. In 2019, out of 167 people who passed my INITIAL pre-screen and were offered appointments to view, 20% came from Facebook. That's a decent number. And some of those who found us on CL definitely checked into my biz page on FB.

Of the 17 that I actually rented to, 1 (or 6%) came from Facebook. 2 *heard about us* from others on FB, and 2 came from Zillow. The rest were CL.