Forum
« Downpayment as a Gift Finding Commercial Tenant »
October 1, 2009
Advice on Finding Tenant
Hi, my partner and I are about to close on a 3 family home in Brooklyn. We will be first-time landlords and just wanted to get some advice from all you seasoned experts out there on how to go about interviewing potential tenants. Any questions to definitely ask...warning signs to look out for, etc. We are pretty good at reading people, but I know that skill can be pretty meaningless when it comes to tenants. I tend to err on the side of giving people the benefit of the doubt and realize that this could get me into trouble now that I will be a landlord. Thanks for your advice....
Comments
Do a credit check. Any real estate office can do it for you for a small fee. Ask for bank statements. You want to see that they have some savings in case they lose their job. Ask them where they've lived in the past 5 years. You don't want someone who is constantly moving b/c you will have to go through the process again the following year.
Posted by: lilyhstang at October 1, 2009 2:33 PM
A lot of people don't agree with me, but I like to use a broker. I like the idea that I can have limited contact with the potential tenant until they are screened regarding job, credit, previous rental history, criminal and legal records. The broker gets a sense of how the building "works" and my life and gets a sense of whether the tenant would be happy there and if all checks out, we all meet together some place other than the house and have a heart to heart about what's what, the "rules", how things work and whether they can live with them. I don't want to be "rejecting" anyone personally and/or in my house. This has worked out great for me -- others say that the fee discourages renters. I would be willing to kick in part of the fee, but hopefully, the tenant will also benefit by the seriousness of how we approach things from the start and then we lay the solid groundwork for a mutually happy relationship. I have great releationships with my tenants and it is because we have agreed on the lay of the land. And I treat them very well.
Posted by: donatella at October 1, 2009 3:04 PM
Yes, go with a broker...although, you can apparently charge the tenant the costs of the credit report/search you will need to do. Yes, go with a broker as numbskull as some of them can be. If you had posted your neighborhood, I might have had a suggestion or two.'
By the way Lily, you really shouldn't judge which tenant you accept on the length of tenancy in their last apartment. That's not quite fair...and I'm wondering if it is legal.
If you're going to live with tenants upstairs, get used to it sounding like elephants barreling down the staircase...don't let your nerves get shattered.
Posted by: BrooklynGreene at October 1, 2009 3:31 PM
I prefer not to use broker. These people are going to be living in same bldg so I want a real sense of them.
I want to see how they react to apt. If broker shows them, you get no sense and broker will try to minimize any issue
tenant brings up.
If prospect asks about can get this done, and this changed, and has excuse about not having all the money now, or some vague reason why moving, etc you get it 1st hand.
Realtor just wants to seal the deal.
You also get to bring up subtle things about their lifestyle - music, going out, do they like hot hate cold(want lots of heat), etc, entertain lots, etc.
Posted by: Petebklyn at October 1, 2009 3:43 PM
I agree with all the things that Petebklyn says, but I do all that chatting about me, them, lifestyle, what works for me, how I take care of the building, quirks associated with living in a 120+ year old building, things I like, how I don't like being cold and so they don't need to worry about that etc etc., how the mail works, how to pay me, how we do everything from spraying for bugs to handling pets, garbage stuff (like NO STUFF) in the hallway...etc etc. We have a nice heart to heart AFTER I know that they are OK from a salary, job, credit, criminal etc. point of view that the broker checks. Then I ask the person to think it over and that I am reviewing some other folks but would very much like to hear from them (if I do). I like this because we get to talk in a relaxed way after I know they "check out". From this, we know if we like one another and if they have a problem with anything I mention....well, that should work for them too. They get to look elsewhere rather than get locked into a deal where they don't feel happy.
Posted by: donatella at October 1, 2009 4:10 PM
I always do Craig's & it has worked very well. I do ask for references - prior landlords, boss at work, personal. I get a credit check. I go over the plus aspects of the apartment & the minus - small building, everyone responsible for rubbish & recycling, etc. Usually there are several qualified applicants at which point I use my gut.
Posted by: Arkady at October 1, 2009 4:23 PM
I don't use a broker, because I'd rather have two months' security and first month's rent from the tenant.
I don't do an open house, but instead ask them to come see the place if they sound reasonable on the phone. I make it clear that I live in the building and want someone who will appreciate my well-cared-for home.
If the tenant likes the place and I like them, I ask them to fill out a simple application--name, address, place of work, etc., and take a deposit to cover a background check on American Tenant Screen. The deposit just covers the ATS cost (last time I used them, it was $25), and helps to weed out the lookers from the truly serious.
I can't say I have a set of questions for tenants, but you can learn alot from chatting with folks. People that ask a great number of picayune questions scare me as they might be overly demanding. And some people just seem weird.
I let prospective tenants know what the lease terms are, including additions I've made to the standard Blumberg lease (rules about garbage, public space, etc.)
Yes it's a tenant but they're living in your house. I trust myself to make a better decision than a broker, and it saves the tenant some money as well. Good luck.
Posted by: tinarina at October 1, 2009 4:38 PM
OP - great questions.
If one were to do the background checks themselves - LT court, credit, criminal - is there one place that you can go to to do this on your behalf?
Thanks.
Posted by: bedstuytownhouse at October 1, 2009 5:32 PM
Bedstuy--check out American Tenant Screen--they do the whole shootin' match as long as you become a member and prove that you own rental property.
Posted by: tinarina at October 1, 2009 5:44 PM
I've always used a broker and have had good luck. But after reading tinarina's comments, may not do so next time.
Typically used one of the decent-sized realtors in my nabe. More foot traffic. They do a decent job of checking and then I do a meeting if they sound good on paper.
Posted by: Johnny at October 1, 2009 6:25 PM
As a tenant of many years' duration, I have to caution against using a broker unless you have special circumstances. I can think of at least three I have used, and none were as careful as the owner. One was fine but not invested, one misrepresented the apt we rented and we moved out and broke the lease 15 days after we signed it, a third told me and the landlord he did a credit and reference check and he didn't. He didn't take my SS number and he didn't call my references. I ultimately didn't rent the apt, which was lovely, because he was untrustworthy.
If you do go the broker route, by all means use an established, licensed broker with a physical storefront who has been in the neighborhood for ages.
If you do it yourself, you do get a service to run the credit check for you. You have to, it's required by law.
Posted by: mopar at October 1, 2009 8:13 PM
Keep in mind that savvy tenants will expect to pay a lower rent for your apartment if they have to pay a broker's fee.
The broker's fee is usually around 12%, and I would want to recoup that in lower rent in 1-2 years max. And since I can't be sure I'll be there for 2 years, I'd really rather see it recouped in 1 year.
Which means that for a place I would pay $3k/mo without a fee, I'm not going to be happy paying more than $2850/mo with a fee, and I'd rather pay $2700/mo.
I also find it odd when someone uses a broker for an apartment in their own home. It makes me think "wtf is wrong with this person?"
If I were renting out space in my own home I would want to vet people as thoroughly as possible, meet them a few different times, see their reactions, have a few opportunities to talk to them, etc. Pretty much what Petebklyn says.
Also, the broker will definitely try to smooth over issues to get the deal done (that is there job afterall).
I had a situation where I told the broker "I'd be interested if and only if the owner would agree to X".
The broker apparently told the owner "they love the place! isn't that great! by the way, would you be willing to think about maybe agreeing to X, they'd like that".
The owner thought the deal was nearly done, called me to chat a bit, asked me to visit, and everything was going well and then he says "oh, about X, nah, can't do that" as if it were the least important thing in the world. So, I'm like, "ooooookaaaaaay, well, have a good day," while I'm walking away pissed that I just had my time wasted.
Posted by: northsloperenter at October 1, 2009 8:29 PM
W"e are pretty good at reading people, but I know that skill can be pretty meaningless when it comes to tenants"
eh? that's exactly the skill you need for everything subjective; things other than the "real" ones like credit, employment, etc. Go with your gut feel. Communication is the most important thing. DOn't be like these landlords who don't want to talk to their tenant about problems, who treat them badly, who're overly nosy, etc. It might be *your* house, but the tenant-landlord relationship is a business one and you need to keep it that way, even if friendly.
I cannot see what a broker can bring to the table. I used Craigslist for my last 3 tenants.
Posted by: cmu at October 1, 2009 9:17 PM
Craig's List.
I like meeting and chatting with prospective tenants myself. I trust my instincts (so far, so good). I also agree that it is helpful to see their reaction to the place, the potential downside, and to tell them about the house and its ways myself. If they are interested they can take an application which asks for refernces, employment info etc.
Posted by: henrycurtis at October 2, 2009 1:21 PM
Thanks all! Great advice....
Posted by: landofenchantment at October 2, 2009 5:46 PM
I don't think it's about reading people well as much as it's about communicating really well and setting the right expectations.
Sometimes in an effort to be nice, landlords downplay their needs. This is polite behavior and is useful in most circumstances. But when you say things like "it's okay" when your tenant is late with rent, it's not the same as saying "it's okay" when someone spills their drink on your shoulder at a crowded bar.
When you downplay or dismiss your needs with a tenant, you open yourself up to the kind of people who are always testing, and that turns into conflict. When you are clear about your needs and don't sell yourself short, you're leaving fewer opportunities for conflict.
Posted by: vanburenproud at October 3, 2009 8:44 PM
Post a comment
Please be patient while your comment is published. It may take a moment.