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Jul
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You’ve finally taken over the property, are calling yourself the landlord, are officially working in the field of commercial property management (or residential), and have begun advertising. Your primary mission is to get rid of those vacancies. Do whatever you can to get rid of those vacancies as soon as possible, right? Yes, but only under certain stipulations. You should follow a good commercial property management checklist. You need to exercise control and slow down; you don’t want to be one of those landlords who rushes into things and ends up with horrible tenants. Renting to tenants is like buying an appliance for your home, say, a stove. If you just rush in and buy a stove, you have no idea what you’re getting. You might be getting a really great stove! But, you might be getting a lousy one, which you only find out when you can’t heat up your food, as it doesn’t get hot enough. But, if you had taken some time, if you had read Consumer Reports, then you would find yourself buying a much better stove that will prove to give you little problems. So, if you exercise caution, slow down, and screen your tenants properly, you should end up with good tenants; therfore, you should end up with little problems.
So, how do you screen your tenants?
This is a good commercial property management checklist, which is borrowed from Leigh Robinson. This deals with residential property management, but it applies to commercial property management as well.
Gross income – four times rent
Income stability – at least six months with the same source of income
Assets- five times rent (bank account and automobile equity)
Credit – established, nothing negative
Credit Cards - one major credit card
Rent Punctuality - prompt, never late
Pets - none
Waterbed - one queen size OK
Vehicles – one auto, no motorcycles louder than an auto
Former landlord’s recommendations - good
Number of tenants – maximum of three
Attitude- cooperative
Smoking - no
Drinking – moderation (maximum of two drinks daily)
Illegal drug use - no
Permanence – at least six months in each of last two residences
Cleanliness - average
Interest in the dwelling – average to high (willing to pay more in rent than asked)
Here are steps during the tenant seeking process:
1 – prepare the dwelling for occupancy
2 – prequalify the prospects
3 – show the dwelling
4 – accept and scrutinize applications
5 – check references and qualify the applicants
6 – visit applicants’ current home
7 – review your rules, requirements, and policies
8 – fill out and sign the rental agreement
9 – request all monies or a hefty deposit
10 – create a record of the dwelling’s condition and contents
If you follow these steps and use the checklist above when screening tenants, you will almost always have excellent tenants. This process is not difficult, but very few landlords are willing to put in the time and energy to do it. It isn’t difficult, but it does take time and effort. However, think of it as an investment. You do like investing, don’t you? After all, you do own an investment property! The more time you put in now, the less time you’ll spend later. Problem tenants will always eat up more of your time than you will spend screening. It is always worth your while. Remember, too, that having vacancies is no excuse for accepting substandard quality tenants; commercial property management is not the place to take the easy road.