The success of a real estate investor is influenced by numerous factors. You can buy the right homes in the right areas, but how can you draw good-quality residents? When it comes to investing your time and money into great properties, you want to make sure you are housing them with equally great residents.
What Makes an Outstanding Resident?
A wise property manager will go to considerable lengths to find a suitable resident. Those who have a track record of being financially responsible, following the rules, demonstrating their ability to pay rent, and taking care of the property, are considered good-quality residents.
However, keeping your business strong and growing depends on having outstanding residents. This means you can’t simply accept the first people to apply just because they meet a few requirements. There are some characteristics that, although may not be straightforward to see, can make a renter stand out as the perfect resident.
Some characteristics of outstanding residents:
- Has a clean eviction record
- Has healthy financial and credit history
- Demonstrates respectful behavior
- Has stable income and employment, with proof
- History of paying rent consistently
- Keeps up with maintenance
- Has non-serious rental complaints
- Ability to follow directions on rules and regulations
- Is honest
To find the best residents, you must be strategic, savvy and adhere to specific guidelines. Here are some quick tips to help you choose the best residents.
Have a Tough Screening Process
Implementing a strict screening process is the first and maybe the most important tool for finding the right residents. You should set high standards and make sure that any prospects meet at least the minimum of those standards. In addition to being tough and keeping your standards high, you must also remain fair. Be sure to always follow the Fair Housing Rules and treat all prospects equally.
When screening any applicants, it’s important to do the following:
- Verify income is at least four times the rent (many recommend three times the rent, but we have found that four times drives the best in class performance and DOES NOT increase vacancy time)
- Get copies of their pay stubs
- Confirm their employment by contacting their employer
- Perform a criminal background check
- Check their rental history (Any evictions? Do they move a lot?)
- Check their employment history (Do they switch jobs often?)
- Check their references
- Meet them in person (or virtually)
The final thing you’ll want to do if a prospect passes the screening process is to meet them in person, or virtually. This will give you a better sense of what to expect from them. If possible, meet them at their current property. This will give you deeper insight into the kind of residents they are.
Take Advantage of Technology
You use technology every day. Whether it’s the GPS on your phone or a simple Google search, technology helps make your life easier and more efficient. So why wouldn’t you use it to find residents?
There are several ways technology can help bring in residents. One of those ways is through digital marketing. You want to make sure you are advertising your properties on multiple websites to reach as many prospects as possible. The more applicants you have, the pickier you can be when choosing your residents.
Make sure your properties are shown on the right websites and don’t underestimate the power of social media. Social media can be a great platform for you to target potential renters. You’d be surprised by the number of applicants you can find by advertising on sites like Facebook.
Another advantage of technology is that the quality of showing-off units has increased tremendously. Having high-quality photos and videos, and offering virtual walkthroughs can increase your rental applications 10x than just having basic information with mediocre-quality photos.
Putting time and money into great photos and videos will attract many applications. There is nothing worse than having a beautiful property that is poorly showcased online. Utilize 3D cameras to give prospects the ability to take a “virtual tour” or offer virtual walkthroughs for people at their own convenience. You could even get super savvy and offer full drone footage of the entire building. Regardless of how you decide to use technology, this is one area you don’t want to neglect.
Practice Excellent Communication
Once you’ve chosen your residents, set them up for success by constantly communicating with them. Your residents should always be provided with any information they need from the moment they move in to the moment they move out.
Make sure that they understand the rules and what is expected of them from the beginning. Confirm the cost of the rent. Explain their payment options. Show them how to submit maintenance requests. Communicate any penalties for breaking rules right away. Then make sure they have written copies of everything as well. It will not only make it official but also give them something to refer to.
Follow up with residents often to make sure everything is going well. Make it easy for residents to reach out to you if needed. If any issues do come up, be sure to address them as soon as possible.
Create an Exceptional Company Culture
At the end of the day, if you want to find and keep great residents, you need to be great yourself. A business with a kind, friendly and welcoming company culture is going to attract exceptional residents. And exceptional residents will often renew their leases.
If you can provide your residents with the best living experience possible, they may even recommend you to their friends and family. A great resident probably knows other great residents and can send them your way if you manage to impress them. It’s a win-win when you are offering world-class service.
It can be discouraging when you put a lot of time and effort into a property only to have it occupied by awful residents. If you offer quality properties and service, then you should find quality residents. Here at PAM, we offer these quality services when it comes to property management. Let us help you find the best world-class residents, contact us today.