Are you a new real estate investor? Are you trying to find renters for your newly purchased house or condo? While it can be a little intimidating at first, finding renters for your property really isn’t that tough. You really first just need to know how NOT to get renters, and then learn a few tips to find those quality tenants that you’ve been dreaming of.
My Background in Real Estate
My wife and I bought our first rental property four years ago – a single family house just a few minutes away from our primary residence. We paid $81,000, put $9,000 into it and really haven’t done much with it since.
Today, that property is worth $170,000 and we’ve netted about $10k a year in rent. Our $90,000 investment has turned into $210,000…in just 4 years! That’s an average return of nearly 25% a year!
AND, even after all the warnings from my friends and family, no one has even come close to trashing the place. In fact, the house is almost in BETTER condition now than when we first started renting it out.
So how did we do it?
Honestly, the formula isn’t really all that difficult.
If you want to find renters that will respect your investment and pay you on time every month, you really just need to:
- Create a living space that good tenants will be attracted to and be willing to pay for
- Avoid stretching yourself too thin financially
- Have patience when selecting a tenant
- Be the best landlord your tenant has ever seen
That’s it. Everything else just seems to fall into place if you check the boxes of the list above.
So that’s the extreme high-level view of getting solid renters. Let’s hit a few more details so you know exactly what to do and what not to do.
Finding Renters is Step 3…Let’s Talk About Step 1 and 2
I’ve heard plenty of horror stories when it comes to renting out a property:
- bullet holes in the house siding (from an unsupervised kid…not any kind of street violence)
- water damage from a slow-leaking pipe
- cat pee…everywhere
- crayon “drawings” on multiple walls (toddlers of course)
- holes in walls
The list could really go on and on.
So how does stuff like this happen? And is there any way to avoid it?
Well, there’s never a way to avoid it all, but if you do step #1 and step #2 right, the chance of having your place destroyed reduces dramatically.
If you’ve ever talked to someone in real estate or read beyond page two in any real estate book, you know that the first “three” principles in real estate are ‘location, location, location’.
If you want to rent your place to a well-respected, high-earning couple with say, one young child, then were do you think you should buy a place?
- In the bad part of town where the police often patrol, but you got a steal-of-a-deal?
- Or, in that low-traffic quaint suburb community where all the yards are pristine and kids are always playing with each other.
The suburb community of course…
Sure, it’s more expensive, but it puts you in the market for your dream tenants.
If you buy the okay place in the okay-ish neighborhood, chances are your candidates are going to be okay at best. You’ll likely have a future of missed rent payments, some damage to your house, and tenants that rarely answer your phone calls.
If you want great tenants, buy in a neighborhood where great people live.
Step #2: Make the Place So Nice They’ll Want to Keep It That Way
If you buy a place and it needs a little work, don’t pour a bunch of money into it like you might if you were going to live there. But, put enough money into the space so that it will be long-lasting and looks super nice!
- Sometimes, all it takes is a little paint,
- maybe some nicer trim, or
- maybe some updated kitchen appliances.
Whatever it is that looks a little dingy, spend those few extra dollars so that when you do the walk-through with those prospective tenants, their eyes start to light up and they get excited about living there.
Why Spend the Extra Dollars?
What this does is, they’ll actually take care of the place better because it feels special to them – almost like it were their own place. When their friends come over, they’ll want to show them the kitchen, the fresh clean bedrooms, the updated bathroom, and maybe even a few special features here and there that appealed to them when they first walked through the place.
If, however, you show the place dirty, with old outdated appliances, and maybe even a bad smell coming from the basement, the good tenants won’t come back, and then you’ll be left with a pool of bad tenants. You’ll then either have to choose from the best of the worst, or you’ll just leave the place vacant… Not great options.
So be sure to fix up the place and make it look almost good enough to sell it.
Now that you understand steps #1 and #2, it’s time to move onto step #3 – the actual process of finding renters…
How NOT to Find Renters
If you’re looking for solid renters (which we all are of course!), be sure to just skip the below options entirely. It’s just not worth the aggravation and the inevitable reduced income.
Skip the Friends and Family
You know who some of the worst renters are?
- family, and
- friends…hands down.
You wouldn’t think so initially would you? You’d think that there should be even more respect there, which should equate to a fantastic clean tenant that always pays you on time.
For whatever reason, the closer someone is to you, the more entitlement they feel and the more slack they expect you to grant them.
With friends and family, they’ll probably expect that you:
- Reduce the rent for them
- Help them move in and out
- Be understanding if rent is late
- Respond immediately to any tiny little issue
And in the end, your relationship will almost certainly be strained.
It’s just not worth it.
Avoid any kind of business deal with friends and family. There’s too many emotions involved to keep the entire process as a business transaction. It’s just nearly impossible.
Don’t Rely on Property Management
Many people have property management companies for their rentals.
I personally think they all do an okay job, but none of them are going to run that property as carefully or as thoroughly as you would.
Because it’s not their investment and therefore not their money on the line.
When it comes to renting out a property, they’re okay with getting someone in there that’s “good enough” vs. waiting a little longer for the perfectly qualified tenant.
And the reasoning behind it is simple:
- They get paid when the property is rented.
- They get nothing when it’s vacant.
The faster they get your home rented, the better. If there’s a bit of damage to the property because the tenant was just “okay”, that’s on you, not them.
The incentive just isn’t there for a property management company to find you a great tenant that’s going to take care of your place. The name of the game is to limit vacancies so they get their maximum payment. And for this reason, I’d rather find renters myself.
Skip the Craigslist Ad
In the beginning of my land-lording days, I used to advertise on Craigslist to find renters. But, the users of that medium have shifted a bit. I’m not quite sure why, but more often than not, the candidates that see my ad on Craigslist aren’t qualified…but they of course call me up and bug me anyway.
For the most part, Craigslist has been a complete waste of time for finding renters, so it’s probably best not to start there. If you find that the other mediums I suggest below don’t pan out, then you can come back here, but I doubt that will happen.
Just skip it.
Where You SHOULD Find Renters
So where are the good renters? How can you find the people that will cherish your property and pay you rent on time each month?
Well, just like with most things, there’s no perfect system. But, there are two mediums that have really helped me find great tenants over the past few years:
As you probably already know, there’s a “For Rent” search feature within Zillow. People all around your area can quickly hop on Zillow, click “for rent” and see your place on the map along with the monthly rent amount. Then, they can even click on the property, see photos, see all your details, and can even send you a message through that page.
All you have to do is register with Zillow, which basically just comes down to entering in your personal email and creating a password. Then, you list your rental property with the address, some photos, and what the rent includes (and also, you should list out your qualifications plainly here as well)!
There is an application and screening feature available through Zillow, but I don’t use it. The best part of Zillow is not so that I can get lazy around the application and qualification process.
It’s so I can:
- get the most eyeballs on my rental property
- show how great the rental is vs. the others in the area
- and list out the qualifications that they’ll need to meet
We all know that people are on their phones all the time. And for most people, they’ll be on Facebook for the majority of that time.
AND, if they’re already on Facebook scrolling through their friends and other stuff for sale, they’ll likely hunt for their next rental there too. After all, there’s a fantastic arena for your listing.
It’s called Facebook Marketplace.
There’s even a special area just for rental listings. If someone is searching for a rental in their area, chances are quite high that they’re going to see yours.
So how do you list it? It’s easy.
- Just hop on your Facebook account and click the Marketplace button
- Then select, “Create new listing”
- And then, “Home for Rent”
Then you simply enter in some photos and the details of your listing. It’s quick, easy, and you’re sure to get a ton of views on your property.
The Other HUGE Benefit
When you use Facebook to list your rental and people reach out to you through this medium, you immediately receive another huge benefit: personal information about your prospective tenant.
You’ll likely see:
- Their name
- Where they’re from
- What they do for work
- If they’re married, have kids
- If what they post is respectful
- And, you’ll probably even get to see what they like to do for fun!
The information you get here may even be more valuable than the entire rental application that you’d eventually hand them! And the best part is, you get to see it immediately!
Using Facebook Marketplace for my rentals is quickly becoming my favorite medium for finding renters.
A More Specific Physical Ad (If Appropriate)
I’ve only used this method once or twice to find renters, but it could really prove effective if you’re looking for a particular candidate.
- A college student
- A nurse
- Someone from the factory around the corner
And that’s simply to print out a flyer and post your rental within the building!
…So if you want to rent to college students, work with the college and get your flyer on a billboard in the main commons area. The same thing goes for the hospital or the factory. Get a physical print-out into the building in a main area so that your preferred renter will see it and give you a call!
Other Quick Land-Lording Tips
This post was focused on how to find renters, but there are so many other quick tips that could help you out as a landlord as well.
Here’s a bullet-point listing – Things I believe will help you succeed with your rental properties:
- Set your rents at market value, not below (the lower you go, the less quality your tenants will likely be)
- Require your renters to earn 3 times the rent amount (take-home pay)
- Require a 640 credit score
- Ask for references and actually call them!
- Call their prior landlords (not the current ones – they might lie just to get rid of crappy tenants!)
- Only allow small pets and require an additional security deposit. If you have a lot of carpet, you might just want to say no pets.
- Host an open house for a couple hours on a Saturday. This will save you a ton of time and eliminate the need for countless individual showings.
- Look the part. Tenants are not only looking at your rental, they’re looking at you too. If you look like someone that won’t ever call them back when there’s an issue, they might just move on to the next place. Look and speak professionally, and always be prepared.
- Charge an application fee. You don’t want to waste your time going through 100 applications. You really only need 5 or less to find a qualified candidate. The application fee will weed out the poor tenants that know they don’t meet your clear criteria.
- Run a background check online – I use SmartMove through TransUnion. It will allow you to review the renters’ credit, see if they have a criminal background, and if they’ve ever had any evictions.
- Be sure not to discriminate. If a candidate meets your criteria, you legally need to rent your property to them. If you don’t, they have a right to sue you.
- Finally, be the best landlord they’ve ever had! Be responsive, be respectful of their space, give some grace, and always be clear about your expectations. This has gone a long way for me – my tenants usually thank me repeatedly for being so awesome, and they often leave my place spotless when they move out to show their appreciation! It’s awesome!
Find Renters, Make Money, Repeat!
There you go. You now know pretty much every trick in my landlord belt!
With the above tips, you should easily be able to find renters, have a great relationship with them, and have them eventually hand the house over looking great once their term is over! Then, you simply repeat the process again and again, all while making bookoo bucks and having a ton of fun in the process.
Congrats on getting into the rental business! I wish you luck finding your ideal renter and becoming uber wealthy with your future real estate empire!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.