The book recommendation thread got a little off-topic, so I'm starting a new thread. NE challenged Roy for renting to someone with lots of red flags waving.

I think what Roy is saying is that sometimes there are intangibles that you absolutely cannot screen for that may be of help in a difficult rental market. Were there red flags waving for this tenant? Absolutely. But Roy was able to see past the red flags to potential. I don't know if you'd call it gut instinct or intuition or what. It could have led to disaster, but it led to a successful tenancy instead.

If you're having a hard time finding decent tenants (and it sounds like you are), you might want to look at your screening criteria, which are probably the same as practically everyone else's, to look for opportunities to be flexible.Could you alllow tenants to move in and pay weekly, which would allow you to rent to tenants that don't have a lot of money saved up but have steady income? Could you allow pets or smokers? Accept people without a SS number? Convicted felons whose crimes are far in the past? Refugees with no rental history? Are there people in your market who might be disqualified by your criteria that have the potential to be good tenants?

Most of my rentals in one particular market are to people who wouldn't pass traditional screening. Their relief at being treated with respect as decent human beings is almost tangible. They have proven to be outstanding tenants. I have a waiting list and rarely even advertise. But I include factors in my screening that are hard to quantify, such as the degree of respect in their communication.

Robin said "The job of being a housing provider isn't just about the physical property. It's fundamentally a people business. If you dislike interacting with people, maybe you could partner with someone who enjoys the people side of things to strengthen that part of your business"

Thank-you again Robin for coming to my rescue here. Your words describe me and my way of doing things much better than I could have ever written for myself.

Good points Robin. I've flexed a bit on a tenant here and there, but only if the face-to-face discussion we have is productive and my BS meter doesn't go off. It's still risky though because there are people who are very good liars (usually coupled with psych issues) and can lie without providing any of the 'tells' (tone of voice/facial expressions/body language etc) that would make my BS meter go off.

Is it worth taking the extra time to do the face-to-face once in a while, or is it better to let a property sit empty for months?

Also, I have to say that the discussion cuts both ways.

I've had people who were stellar on my screening process (which on top of the usual home visit and criminal background includes 3 mos of bank statements, etc...) and after having the discussion, my BS meter was too high so I passed on them in lieu of another applicant. A few times, I later found out from another LL in our investment group who rented to them, they were a nightmare tenant that cost the LL bigly. I won't rent to someone who is unable (which usually means unwilling for some reason) to meet.

I'm no longer a people person. I used to be but I'm not anymore. DH never used to be but now is.

I agree rental real estate is a people business, primarily. So are all businesses. Businesses only exist to provide goods and services to other people. Every business has to deal with customers: whether it's the sales department of a Fortune 500 company, customer service at the local department store, or the local small business owner behind the counter who greets you with a smile when you walk in the door.

My point in how I handle screening and leasing isn't that I don't like people. My point is I work a 7 - 4 job five days a week, I've got three kids in the house, two energetic doggos, and 54 rental units. I NEED to be efficient at finding good tenants who pay in full, on time, all the time. And I've gotten REALLY GOOD at that, I think.

Vacancy rate below 3% of total rent months. Better than most professional property managers.

Eviction rate of less than 1% of total rent months. Again, better than most Pros.

Could I spend 5 more hours a week and achieve marginally better vacancy rates? Yeah, maybe. I might be able to shave that down to 2%. Maybe 1%.

But what's my time worth? I get more joy out of 5 hours hanging out with family, friends, driving on twisty back roads in the sun in a convertible to find new places I've never visited before, kayaking down the river and fishing, hiking trails, playing music, and so on. Time is the only resource I have a fixed amount of. I can't see myself giving it up easily, so....

I'll take the hit on the 3% vacancy. I take the hit on the occasional eviction. The law of diminishing returns indicates to squeeze those down a fraction, I'd have to invest significantly more effort and time. No thanks.

Class C units by definition involves being a little more "flexible." I have "can be fixed" criteria. For a double security deposit or rock solid co-signer, I will modify criteria as follows:

1) Will take someone with less than 90 days on the current job.

2) Will take someone with NO credit or marginal credit. (520 - 600). Not BAD credit.

3) Will take someone with no landlord history.

Too, I already allow pets for a registration fee and added pet rent. Smokers are okay as long as they smoke outside and my 2-minute in home inspection finds a pleasant smelling house.

I already do weekly, bi-weekly, and bi-monthly payment plans. I encourage them because they make more $$$ and keep tenants paid up on time.

If I were in the Class B or A game, such criteria would be much more rigid.

Is there a difference between a conflict resolution specialist and a landlord?

NE, I don't know if you saw my response, but I do it out of necessity. You know the number of duds we have to deal with. Something like 100-200 per vacancy. If I turn over just 10% of my portfolio tenants per year, that's 500 - 1000 people I have to deal with.

Let's pretend I spend 5 minutes "dealing with" each person.

2500 - 5000 minutes = 60 - 120 hours = 1.5 - 3 weeks of full time work at 8 hours per day. Yikes!

Some years I'll have 8 - 10 turns... double that.

"People" business doesn't mean I have to deal with each and every person: it means I need to find the RIGHT person as quickly and efficiently as possible. I do deal with people. I have 54 tenants. Those are the ones paying me well to help address their needs. Along with that, I have a dozen contactors whom I deal with on a frequent basis. Further, I deal with a CPA, three banks, and a half dozen private money partners. Also the folks down at City Hall that take my annual tax payments. My insurance agent. The utility company.

Bottom line: I deal with at least 80 people in my rental biz. I have to be efficient, or I simply could not do it.

I'm a people person but only on my terms. I'm pretty good when it comes to assessing someone and I don't need a long conversation to do so. I need my paperwork completed and 9 times out of 10 that tells me all that I need to know. I don't think I've missed out on anyone. The only people who I flex with are those who I have experience with. For example, I have a former roomer who had been evicted who's currently in an apartment right now. I wouldn't normally take anyone like that, but they were excellent roomers and it was easier for all concerned to simply work together to get them into the apartment. I knew them and they knew me and there's no better reference than my own experience and the same applies to them. Anyone else goes through the normal process and even with them, they had to prove their income was sufficient to cover the rent.

To add to NE's statement....

Some people have 15 +/- units and for them it's a full-time job.

Other people have 2, 3, or 4 times that number and manage their properties in only a few hours a week.

The difference is having systems and sticking to them vs. winging it.

If I had only houses I would argue that it could go either way but with multi family I would agree that it is a people business.

The "people business" is not just for getting units rented, it's for keeping them rented. You're going to have to interact with them when the exterior lock breaks, when the furnace stops working, when they ask if they can move a girlfriend in, when they decide whether they're going to renew.

These all happened to me this week. Tenant #1 called to inform me and added that she'd ordered a new lock, replaced it, and would give me copies of the keys the next time I was in town. Tenant #2 told me they'd stay at a family member's house to stay warm until I could fix the furnace. I agreed to let tenant #3 move the girlfriend in for a small additional fee. Tenant #4 told me they wanted to renew even though their lease renewal date is two months out.

Hey Robin,

I like to get to know my tenants. Not on a social or personal level but a solid working relationship that allows issues to be resolved by a simple phone call or text.

Same as Robin noted in her post - pleasant and easily resolved. As most of you know most tenants don't have a clue about how to operate a house. The better the LL/Tenant relationship, the more likely the tenant will call before a small repair becomes a major break down.

That LL/Tenant relationship is also important when a tenant must be removed. Voluntary move out is much better than eviction.

I have two mediocre tenant "families" right now. Since refining my processes from over 2 years ago, I would never have taken these particular tenants now.

Oldest one over two years is now blowing up in my face. Took a little over two years, but KABOOM! The one bad roommate has kicked out the two better performing roommates because his newly installed criminal guests have threatened said two better performers and out they went.

This is NYS so you can't just go over there and haul out the thugs, then change the lock on remaining bad performing tenant. Basically waiting until he stops paying the rent for March to start the eviction proceedings. Can only hope that his criminal guests don't start bothering the pristine tenant family downstairs that it took over 6 months in the SUMMER to get. Already had one or two noise complaints of loud music after hours.

Police, of course, will do nothing.

Had a slow main drain at an apartment. Mentioned it in another thread.

But when I told my tenant I would have my guy come look at it to determine if it was his responsibility or mine he balked.

He came right out and said he worried that MY guy would lean toward it not being my problem. I stopped him right there and said that is not how I do business. I do not cheat people.

Then I told him as a matter of fact that if he really felt that way we could consider this his 30 days notice.

He thanked me for the fast response, this was all a voice call, and admitted that he has had LLs in the past do that.

I reminded him of the face to face we had with the walk thru. He agreed that he thought I was cool at that time as well and apologized. No fault no foul, but my people skills were not to be ignored I guess.

More thoughts:

Would it not have to be a people business from the beginning?

I mean, if you want to attract customers (tenants that you want) and get them to purchase your product or service (rent your house), wouldn't you have to have at least some sort of human (humans are social creatures by nature) contact, even before lease signing?

Would this not be the most important time to create that good LL/Tenant relationship?

People need at least some personal interaction to determine if they are compatible. You cannot make that determination through text. In fact, it is difficult at best to determine the meaning behind words in a text and that is why you need the personal interaction.

So much trying to fit everyone into a neat box of thinking ALL the same. Yet many on here regularly state they DO NOT think that way, operate that way. 99% of landlords on here DO NOT think the same!

IF I turned away tenants who had any ‘ red flags’, I’d have no tenants! The reason Roy’s system works for him is, he is trying to qualify the tenants, not trying to disqualify them while looking for that unicorn perfect tenant. If that’s not YOUR thing, no worries; nothing says anyone has to use his methods.

Well in the hood when you KNOW their credit is bad and they smoke (one thing OR the other) .... it HAD to be a people business. And in the early days credit reports and "systems" were not available, ya better develop a good spidey sense.

Point being, once you develop the spidey sense, you stick to it. Because it works.

We used to make exceptions--we don't anymore. Oregon law changed to be too pro-tenant.

The problem with making exceptions is you have to be very careful not to break the law. Denying one person because of X and then allowing another can really backfire on you.

Let's say I interview Person A and deny them based on income - they do not make 3x the rent per their own admission. I also don't like them but I can thankfully deny them for income, one of my stated criteria.

Person B comes along and I like them and feel sympathy for them. They also do not make the required income but I want to help them and so I make some allowances for them that I denied to the other person.

My thoughts are that you do not need to tell the prospect why you DQ'd them unless it is credit score based.

I have not taken people because I didn't like their attitude.

Also I thought on the list of qualifications the last line item was supposed to say something like these rules can change, or some such wording?