Today I’m going to give you a glimpse into our experience so far renting out our investment property.
After finally listing our two apartment units online in early September, we have had a grand total of four people come by to see the apartments in person. Why so few? Probably because the prices, $1,100 and $950 a month, are among the highest in the neighborhood. Four looky-loos isn’t a great total after having the apartments listed for a month and a half (although, to be fair, we were gone for two weeks in Japan) But do you know what average is good?
Every person who has come to see either of the apartments has applied to rent them.
I’ve found that you can write the greatest online ad take the most perfectly lit photos. It doesn’t matter so long as your rental is the most expensive in the neighborhood. But as long as it’s worth the rental price and even exceeds people’s expectations, it’s just a matter of getting people to show up and see the place in person, and you will have renters.
So far, we have had three people apply, only one of those we actually approved. [Yes, I said all four visitors applied. Technically, one was going to apply but was just beaten out by Case Study 3 (below) who visited on the same day, applied immediately and were accepted] So what lessons can you learn from these case studies when renting from me, your prospective landlord?
Case Study 1
This was a couple moving from out-of-state. The husband had a new job in the area. He was scouting apartments in the area just a few weeks before the big move and starting the new job.
We have some rules for our apartment. No pets like dogs or cats. No smoking. The ordinary stuff. This couple had a support animal, which we would have to accept. I’ve no problem with a support animal since they are probably very well trained. But they also had a cat. Since they were moving from out of the area and needed somewhere to stay soon, I told him I’d bend the rules a bit since they were in a squeeze.
The problem came when they actually applied. It turned out that he smoked a pack a day. “Only outdoors, though.” I don’t care. I’ve seen enough horrifying house fires start on porches in the area, I don’t care where you smoke. It’s not allowed, period. Especially if I’m already bending the rules for a cat, I’m definitely not allowing smoking.
Tip: If my ad says no smoking is allowed anywhere on the property, that means you can’t smoke a pack a day. Inevitably, that smoking will probably end up happening on the property.
Case Study 2
A woman came to check out the $1,100 apartment. It would be just for her, and for when her daughter visits on weekends. Sounds fine to me.
According to her emails, she had more than enough income to pay the rent. I wanted to do my due dilligence with income verifcation, but her application listed a co-worker, not a supervisor, so I asked her for copies of her most recent paystubs.
It took two days, but she did send two scans of paystubs… with the pay dates erased just enough to be illegible. Funny, you could read the rest of the pay stub fine! And yes, it was enough income to cover rent and her exceedingly large car loan (thanks, credit report), but who knew how old this salary information was?
So I asked when the paystubs were from. Supposedly the past four weeks. Well, when the two Year To Date totals jump from $15,000 on one to $70,000 on the second, it’s a pretty good guess that those are not consecutive paychecks.
So I was pretty sure someone was trying to take advantage of me. As if I don’t know how to read a pay stub. The gall! Marge continued to give this person the benefit of the doubt, while I had already made up my mind. So Marge called the person’s employer and they confirmed, “She no longer works here.”
Tip: Don’t falsify your pay stubs. If you absolutely must do it because you’re some kind of pathological liar, at least do a better job of it than this person did.
Case Study 3
Let’s end with a good example. I listed the $950 apartment on a Sunday afternoon and got several inquiries, most of which didn’t respond to my emails. (What is that?) One guy was very good about replying and was anxious to see the apartment in person. He kept remarking on how beautiful it was in the pictures.
The guy and his girlfriend visited the apartment the next night after going out for their anniversary dinner. They were pretty young so this would be their first apartment, and they were engaged to be married next year.
By the end of the visit, they were already planning how they would use each of the rooms. When I mentioned that there was no smoking on the property because of the threat of fires, the guy said he’s so careful he unplugs his XBox everyday because it gets hot.
These kids (And I can call them kids because I think they’re ten years younger than me) had short job histories, little, but good, credit history, and no rental history since they had been living with their parents. But I could tell they were being honest and seemed enthusiastic about moving into the apartment. That is the mark of a tenant who will take care of their surroundings. Oh, bright-eyed youth!
I was right. When I discovered just two days before they were scheduled to move in that their washer and dryer were going to be out of commission for an undetermined amount of time, they took it in stride. They have been super easy to work with as I’ve had contractors coming and going while I have also been over there every other day fixing little niggling problems myself. They’ve only been there two weeks, but I can tell they will be great tenants.
Tip: Show genuine interest in the property. When the landlord/manager/whatever asks for additional information or documents, provide them. Most of all, be honest. Treat the property and owner decently and you will get that treatment back.