Are you a Landlord looking to let your property? Whether you’re a letting agent acting on behalf of a client or a landlord, be always on the safe side and save a lot of your time by filtering out the potential tenants through pre-qualification. This is to help you gain the peace of mind by knowing that a potential tenant is qualified enough to let your property and trustworthy with their finances.
Tenant Pre-qualification- what is it?
Tenant pre-qualification is the process of sorting out the best tenants from a large volume tenant applications received when you advertise about an upcoming rental vacancy. You can receive tenant applications from interested applicants through phone calls, emails and text messages.
By pre-qualifying your tenant applicants, you greatly reduce the likelihood of a bad tenant slipping through the cracks. You also save a lot of time on the phone and unnecessary fuel wastage to show the letting property to a tenant.
How is Tenant Pre-qualification done?
Being a Landlord or letting agent, you must set a pre-screening test to check whether the applicants meet the requirements of your tenancy. Usually a background check from credit reports to financial history and employment history is done as a basic method of screening.
But, you can pre-qualify a tenant through multiple ways. One way of doing pre-qualification check is over the phone.
Pre-qualifying the Tenant over Phone
Most applicants contact a landlord by phone in response to a rental ad or seeing a ‘To Rent’ sign. You can use this opportunity to find out whether the applicant is worth to hold or leave.
The best way to start the conversation is to ask the applicant, “How him or her heard about the rental? If the applicant learned about the rental from a sign out front, then you will know that this person is familiar with where the property is located and the neighborhood.
While this is good, the applicant familiar with the neighborhood is usually the most qualified because they are already familiar with the location and the property. During your conversation, if the applicant can’t remember where they saw the rental ad, or which property they are calling about, that means they are checking out a number of property rentals, and they are not committed to any one property.
Next step to follow is to find out what the applicant is looking for in a rental property. This will give you the opportunity to reconfirm the rent, the number of bedrooms, or questions about the layout of the property and eliminate any applicants who are not a match.
You can also eliminate unqualified applicants with these additional questions on security deposits and advance payments such as:
• Do you have the funds needed to pay up front?
• How many occupants will move in with you to the house/apartment?
• Can you provide references from your employer and former landlord?
• Will you agree to a credit and background check?
If the credit and security checks are done, move on to the next step of approaching the tenant with some personal questions like;
• When do you move in?
• How long do you need the property?
• Do you have any pets? How old are they?
• Have you ever been evicted?
• Do you plan on getting a roommate in the future?
• What is your typical work day like? Do you work night shifts or odd hours?
• Do you smoke? Do you smoke indoors or outside?
• Do you have any friends or relatives who frequently spend the night in your home?
Once you confirm the details, ask the applicant if they need time to think over before scheduling a site visit. If the applicant tell you they need time to make the decision, or want to talk to the partner, spouse or friends, these are signalling a lack of commitment.
Tell them to call back later if they are interested. Hard-selling an applicant to visit the site at this point will likely be a waste of time, and an unnecessary risk to any existing tenants and the landlord.
Strategies for Landlords or Letting Agents
So, if you want the tenant pre-qualification to be a smooth process, here are a few strategies to keep in mind:
1. Be specific:
When you give the ad for property lettings, make it more specific so that you will cut down the number of unnecessary contacts. One good tenant is worth more than one hundred unqualified tenants. Let applicants know the general location, size and price of the unit so they can decide if it’s worth pursuing.
2. Mention About the Background Checks in the Ad:
Advertise that you will require a tenant background check. This will eliminate many problem with tenants who don’t want to waste their time.
3. Enquire on the Source of Income:
Ask the applicants if they have a source of income that is sufficient to cover the rent. Any legal source of income will suffice.
4. Stress on your Material Requirements:
Give more stress on your material requirements like no-smoking, no-pets, one-car per unit or any other issues that all applicants can’t comply.
5. Find Out the Tenant Date to Move in:
Find out when the person is planning to move at first rather taking a trip out to the rental site, or spending an hour answering questions about amenities and finally to find out that the tenant is just “looking around”.
6. Ask the Reason for Moving Out:
Discuss why the applicant is moving as you’ll want to know if the person is breaking a lease or angry with the current landlord. A tenant involved in an eviction often will look for a new place to live before the court order.
7. Record the contact information
Collect the details of contact information and take notes of the initial conversation so you can compare that info with the applicant’s photo ID and completed rental application.
Although, over time you may feel that this process of pre-qualifying applicants will become second in nature, you will find out that it will not only save you time, but save money too which is otherwise wasted on bad tenants.