David Tilney taught me the ins and outs of property management. His approach to things will blow your mind. The first time I heard him speak, he said he loved being a property manager because it was one of the few businesses that permits you to choose with whom you do business. Let that sink in for a minute.
This week something very interesting happened. I literally talked a couple out of renting a house that we manage as we were sitting down to sign the lease. Why? I’ll tell you in a minute.
The top of our rental application states that we do not choose people on a first come first served basis. David taught us to pick the person that best fits the property. The idea is to match the right person to the right house so that they’ll enjoy the house and stay. Let me walk you through the steps that lead to a “lease-up” and then I will tell you why my couple was not the right fit.
The first thing you should do is have people see the inside of the property. This ensures that the folks who send in an application love the house. Once they do, check out things such as:
- How long have they been on the job
- How much do they make
- How long have they lived at their current residents
- Reasons for moving
- How much debt do they owe
- We even ask about their home improvement skills (we want people that can take care of the house they live in).
After we verify their application, we schedule an in-home interview. This is to see how well they keep their house. If you rent to them, remember, how their house looks today is what your house will look like in a few weeks.
But Joey, can’t they just clean up if they know you are coming? The answer is yes. Rest assured… you can’t hide nastiness. You also can’t hide horse-sized dog turds that are supposed to be coming from the Chihuahua listed on the application.
This step is a must. You get to see if these are the kind of people you want to do business with while seeing the condition of their home. It really gives you a good feel for who they are, how they will treat your house, and how you will be able to interact with them.
Next, schedule the lease-up. My couple made it all the way to this point. They were stepping down from 3000 square foot to a 1200 square foot house. They were great on paper, great in person, and willing to take the property. Notice I didn’t say they loved the house.
That big of a down size means something.
They were moving from out of town to get closer to momma in her failing health. In order to do that, they were about to take a house they didn’t even like. That makes them awesome kids, but terrible tenants. It’s not that they would’ve harmed the house, they would just move as soon as they could into something bigger.
I didn’t do an in-home because they were from out of town. If I had, I would’ve known they were not a good fit for the property. I literally begged them not to take it once I found out they didn’t love the house. To help, we found them someone else’s property to move into that they would love.
Remember, a good tenant is one that pays AND one that STAYS. You lose money every time someone moves out. Choose people that love the house and they will want to stay forever! You will be glad you did.
Joe and Ashley English are full time investors in North West Georgia. For more info, visit www.cashflowwithjoe.com.