There are some basic rules when it comes to leasing or renting out your property. All landlords are looking for the magic key to avoid getting bad tenants and sometimes even the best of you get fooled. When looking for good tenants follow these simple guidelines and hopefully you will never have to worry again:
1. Hire a Realtor or Broker to rent your apartments out. The Broker will place a sign in your yard, indicating the home is being managed by business class people not "Mom and Pop" owners. You would be surprised how this one sign can turn many potential bad renters away. It seems like bad renters avoid any type of rigorous checking. They can con the best of you and so by spending a little money, you save yourself some problems.
The Broker's job is to run a credit report, take a full application on the prospective tenants, notarize the lease agreements and check the job and references out. The Broker is being paid to protect you and in most cases the Broker will bring you the best tenants. A Normal fee to hire a Broker to rent out your unit is 50 percent of the rent, but this is negotiable.
2. Look at the person and the references very closely. Many people are able to con even the best person, so look at them very closely. Notice the clothes they wear, their shoes, their jewelry especially and also the references. A person who uses a doctor or lawyer for a reference is better qualified than a man who uses a man who works at a burger joint.
3. Look at the rent to debt ratios. The bank looks at a ratio of 28-33%. If the prospective tenant has problems with his credit report and has high rent to debt ratio, this is a red flag. Of course there are always reasons why a person is in default or has collections, but listen to the explanations thoroughly and question why they have not bothered to correct their credit report.
Correcting your credit report is not that difficult. There are many agencies that correct credit reports for a fairly reasonable fee. The tenant themself can dispute credit defaults. If the tenant shows no intention of trying to correct his collections or defaults, refuse the tenant. Feeling sorry for someone can lead you right to the "Poor House."
4. A really simple thing to do is to run an Internet check on the person's names. If his name is Tom Jones, google Tom Jones and see if you see anything suspicious on him. The Internet has more information than most people can imagine.
5. Make sure if you hire a Realtor, that the Realtor checks prior residences. Talking to the prior landlord is a good thing to do. Sometimes the prior landlord will cover for the person, but many times they do give hints and warnings to watch out for.
In the end, talk to the tenant one on one and look at their eye contact. Look for well kept clothing, polished shoes, children being kept very tidy, etc. These things can appear to be minor, but in the end it is all you have to go on. Gut feeling sometimes will give you more insight into a person's character than a three page application.
As a former Broker-owner I can tell you I was chosen many times strictly on referrals. When anyone is looking to find the right real estate agent I would agree this would be an excellent beginning. Look to whom your friends and neighbors recommend. I remember once I went to an open house and met a woman who hated her agent. She referred me to her friend strictly on a chance meeting.
Funny that referral brought me many other clients. Sometimes you can get a lot of business strictly by being in the right place at the right time. This happen to me more than once. Did you ever notice how people just plain don't like their agent. Why do you think that is? It is because the personal touch has gone out of real estate. When looking for the right real estate agent, look for someone who has time for you.
Your best friend is your agent:
I had some clients in Downey, California and they were so good. Their daughter had cancer and she lost her hair and then her feet. She was only ten years old, but she never gave up. She just loved her new home and it had a swimming pool. She went swimming every single day and she was a survivor. She use to go to the men's bathroom because she wore a baseball cap and she did not want to not fit in.
Real estate is a lot like that like girl with cancer, you have to be a survivor and she you have to keep swimming around till you succeed. Many times a Realtor is chosen because they are different. I went around in gym shoes and a sweatshirt when I door knocked and I use to really drawl out my accent like, "How ya'll doing today, I am a Realtor." They would look at me and just smile. Their first question to me was, "Where are you from?" I just smiled and then would laugh and I'd say, "Why ma'am I am from Kentucky." Back then I was not Muslim of course.
I got more doors opened and yes my very first listing with being different. So rule number two in choosing an agent, look for someone who could be your best friend and confidant.
More agents lose sellers because they just don't care. I would go back all the time after the sale is over and visit and "chew the fat" so to speak and of course when I was there they would tell me they were thinking of refinancing their home or buying a second home and of course they thought of me. I remember once my clients of the girl who had cancer told their friends, our Realtor is our friend and she comes to our home all the time. I was reliable.
Look for a reliable agent:
When choosing an agent, look for someone who keeps their word. If the agent says to you that they will call you at 6pm and they do not call you back, fire her. If she promises to show you home on Tuesday and then when you go for the appointment, she is not there, fire her. A Realtor is as good as her word. She needs to be a seasoned agent with many sales under her belt and she must work at a reputable company.
An agent is as good as her backing Broker. If you want to have a good agent go with one that you can find five years from now. If you work with a agent from Dog pile Rentals instead of C-21 Jervis you may regret this decision. Few real estate transactions close without some type of problem. Look for a reliable agent.
Never choose an agent based on commission:
Commission should be your last consideration. That referral I got from the woman who hated her Broker wanted me to lower my commission and to sell their home for a higher price than I suggested. I told them no thanks and proceeded for the door. The man told me, "Wait, we want you to sell our home." I told him very nicely that I would be doing you a disservice by lying to you about the price and I do not cut commissions. I left that home thinking that was the last I would see from him.
The next day I signed the listing on the property and yes it sold in three days. Go with an agent you can trust, who is reliable and who will stand their ground. Never sign a contract with a desperate agent. Desperate agents have no money for advertising, will cut corners on flyers and promoting your property also. They don't have to drive a Mercedes, but they do have to have ethics.
Friends never die:
As I look back at my many friends I had in real estate I am amazed. My husband told me once, "I wished you treated me as good as you do your clients." I did treat my clients like gold and they remembered me. I remembered when they were getting a divorce or when some died. I was always their friend and when the little girl died I went to the home to see the memorial and to pay tribute to one of God's fallen soldiers. As sad as that day was, it proved one more thing, that helping those people get that beautiful home to make the little girl's life happy before she died was more important than commission.
Look for a friend, but most of all look for a Realtor (member of the board of Realtors) not an agent. Look for a seasoned Realtor and one who has ethics not someone int he bars every night. There are millions of Realtors available and your choices are many but there are very many bad Realtors, hopefully these tips will help you chose the correct Realtor for your very next transaction.
