So you’ve finally put the finishing touches on your investment property and you’re ready for the rental applications to start pouring in, preferably from dozens of over-qualified prospective tenants. In the right market, a simple front yard “for rent” sign and an on-market price tag will attract more than enough applicants to give you the pick of the litter. In moderate and difficult markets, a little extra legwork is required to attract the quality applicants your property deserves (and your investment demands).
If you’re an old timer at this rental thing, you can skip down to the longer list of property promotion tips below. If this is your first time leasing a property, and thus your first time finding tenants, I have two words of advice up front:
- Don’t get discouraged. Independent landlords have been renting properties since property ownership began. It isn’t that hard to do, and you don’t even have to be that smart. You just have to put in the time. The list below will give you some good places to start.
- Never accept a tenant just to get the place rented. Bad tenants can cost you 10 times more than the rent you’ll collect from them. They will miss payments, damage the property, and could ruin your reputation in the neighborhood. If you aren’t getting quality candidates, you need to cast a wider net.
Finally, before I move on to the list, recognize that this article isn’t about screening out prospects once they’re interested. This article is about generating that interest in the first place. If you can’t get applicants, you’ll never have to worry with screening techniques.
Where to Advertise
1. Craigslist and other online free listing sites. With free, long-length classifieds with pictures, it only makes sense to publish your listing on Craigslist first. Craigslist has over 9,000,000 visitors a month. That’s pretty good odds that someone stopping by will be interested in what you’re selling. Unfortunately, all of your competition also knows about Craigslist. Today in the Baltimore area alone, there were 200 new listings. But, there are things you can do to make your property stand out (see how to advertise below). Don’t bother with online “pay” sites. If your Craigslist listing isn’t getting traction, either your price is too high, or you aren’t including the right selling features of your property.
2. The nearest metropolitan paper. This tried and true method of publicizing your property still works. Most large papers will run classifieds for $20-$100 for some run period which usually lasts for at least 2 weeks. Run your ad in the weekend paper. Weekday issues don’t perform as well. If the paper offers online listings, see if they’ll throw in a listing there for cheap or free. If not, stick with free online services, don’t pay the paper much to use their web site.
3. Local, community, and free papers. If you live in a heavily-populated area, there may be 3-4 local papers in surrounding communities that are good targets for your listing. You should advertise in the paper that serves your area as well as in papers in surrounding towns/counties. Free papers that are distributed to every home in an area (e.g. PennySaver) are excellent targets for advertising, since people don’t have to make extra effort to pick them up.
4. Military installations & churches. Contact your local military base and ask if they keep a listing of available properties for incoming service personnel and their families (most do). Military personnel present much lower payment and damage risk than the general public. Local churches may have missionaries coming back from overseas, or local parishoners who are looking for a place to live. Many churches have a public bulliten board within them where rental notices may be placed with permission.
5. Large companies & government agencies. Many large companies and Government agencies have public bulliten boards where staff can place ads. You probably have friends working in these companies. Ask them if they’re willing to put a flyer up for you.
6. Grocery stores and other public centers. Grocery stores often have public bulliten board space where you can place your ad. Make sure there’s no fee to place an add before you pin yours up.
7. College campuses. While college kids are often stereotyped as extremely destructive, this isn’t always the case. Many times, kids’ parents are paying for their housing, and they can afford the payments of a nicer place. Most college kids won’t have established credit or income streams, so their parents will co-sign. If you’re concerned about damage to the property, consider raising the security deposit to a level that reduces your risk. Also, make it clear what is and is not acceptable in the home.
How to Advertise
8. Make a Rental Advertising Flyer. The simplest flyer should include every feature of the property that sells well. You should also include call back information, and a map to the community. Do NOT list the address of the property on the flyer. It signals to would-be vandals that the house is vacant. If you use MS Word, Microsoft offers several real estate flyer templates online for free.
9. When ad space is limited, highlight the essentials & best features first. If you only have 80 characters of text, make sure you highlight the most important things first. Critical information (in order of importance, not listing order) are: call back number, location (city, town), house type (SF, TH, EUTH, APT), is fully furnished? (only if yes), price per month, # bedrooms, # baths (only if good selling point), central AC (only if yes), non-essential appliances (washer, dryer, dishwasher), pets welcome? (only if yes), property characteristics (fenced yard, pool, etc), security deposit requirements, credit check requirements, school districts (only if good).
10. List ONLY the features and benefits that SELL. Remember, you are selling your property, not just describing it. If you’re property lacks central AC and most of your competition has this, don’t describe the great window fans you’ve installed. That only reminds your prospects that your property doesn’t have this coveted feature. You don’t need to tell tenants about the lack of central AC. If it’s important to them, they’ll ask.
11. Use pictures whenever possible. The old adage is true: a picture is worth a thousand words. Just make sure the pictures convey the right 1000 words. Use pictures that make the space seem large and inviting. Look at your competition’s photos online (you can see hundreds on Craigslist); make sure yours are as good or better. Include pictures of the community, including any benefits like tennis courts, pools, etc.
12. Tell prospects that you have credit and income requirements. When you have the space (e.g. on a flyer), it is good to disclose that credit checks and/or income verification are part of your application process. You can add that applicants who don’t meet the requirements may have a co-signer back their agreement. Remember, prospective tenants who shy away from credit / income checks are not worth renting to. A solid applicant will have no problem with you checking these stats.
How to Engage with Prospective Tenants
13. Be confident in your property and yourself. When a call comes in, set a time to meet potential candidates and ask to confirm with them 30 minutes prior to the showing (offer to call them, or have them call you). Dress nicely for your meeting, but not too formally. People like to work with real people; a suit would identify you as a salesperson.
Offer to show people around the house. If they prefer to walk around alone, let them. If they ask for a tour, highlight positive features in every room you enter. If a prospective renter highlights a negative feature, don’t disagree with them. Simply continue your tour and point out other benefits of the home. Remember, never act offended if the prospect doesn’t appear to like your property. It might not be what they expected (after all, your flyer only included positive traits). If they decide the property isn’t for them, ask them what the primary drawbacks were so that if they are correctable, you have an opportunity to do so.
14. Finally, be persistent. Renting a property takes time and diligence. If one tactic isn’t working for you, try another. Don’t move immediately to reducing your price (unless you realize you’re way out of market). Don’t take the feedback from one visitor and assume everyone who sees the property will feel the same way. Continue believing in the property and yourself. If you’re confident and persistent, you’ll have tenants in no time
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What do you think? Was this article helpful to you? Are there any tips you would add?
Image by BookMama.
Great list! As a former landlord, I’d add simply:
~ Don’t feel that you must accept the first tenant that comes along, especially if you’re getting a lot of interest. You’re allowed to pick and choose from interested applicants as long as you don’t illegally discriminate.
~ If it’s legal in your area, get first AND last month’s rent AND a security deposit. Too often tenants skip payment on the last month’s rent, thinking that you’ll just keep the deposit instead.
~ Get a credit report, paid for by the tenant. No credit is actually a better choice than recent really bad credit. Look at the specifics, not the rating.
Very helpful! Great article. I will refer back to it once we’re ready to jump off the deep end again. LOL.
I agree wholeheartedly with point #2 up at the top – it will cost waaaaay less to cover a month’s rent of and wait for the right tenant than to accept any old tenant. We learned that lesson to the tune of $12,000 (thankfully, our portion of that was only the deductable). Interestingly, the mortgage payment would have cost us only $200 more than the deductable, and would have saved us a second month of vacancy while contractors worked to restore the damages.
Such a timely post! I just this morning posted on the blog abut a property we’re looking at to buy as a rental. We’re putting out feelers to the people we know who are looking to rent first, but if we were to have to cast a wider net, as you say, this list will be a great reference! That’s only if we can muster up the nerve to plunge into an investment in this market in the first place…shudder.
Leslie – all good tips… Some of those will be the subject of a future post on how to evaluate tenants… good to have them here as well, you’ve hit the big ones for identifying a good tenant.
Tyler – Sorry that you learned this the hard way. That said, even among those that rate worthy (credit, income, reference letters) … there’s still a few that will cause serious damage to a property — that’s just part of the risk of being a Landlord. (That said, if you’ve done your homework, my guess is that this risk is in the <5% chance range).
Amalie - I'm sure you can do it. IMO, not knowing your situation, you are better to look seriously at comparables in your area to determine a market rental price -- then see if you can afford the property based on that. That way, if a friend doesn't work out, you'll have the entire renting community interested in your property as well. There are certain other risks in having friends rent your property... and that all comes down to what type of friends they are, how secure their income is, how responsible they are, etc. If you can find a friend that meets strict criteria, it's always nice to be able to rent to someone you know and trust.
Finally, I didn't link to it here, but I recently posted the lease agreement we use for our tenants. Feel free to use anything from it when you’re developing your own agreement.
Never accept a tenant just to get the place rented.
Truer words have never been spoken. I owned a rental for about six years. The first tenants were alright, although the place was overloaded with stuff when they were living there. They broke their lease and forfeited the security deposit.
The next tenant was a disaster, he was growing pot in the basement and skipped town, ended up leaving his girlfriend holding the bag as it were (or at least that is her story).
Anyway, after that I went through a real estate agent for the rest of my tenants. The real estate agent was great because she ran background checks and did a very through screening. It was well worth the one month’s rent to have good tenants.