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.

You introduce yourself to the family or business residing in your property, just like you read in the short guide to commercial property management. Everything goes just like you planned it; they smiled at you, greeted you politely, and offered you to come inside. You did go inside, but not too far; you didn’t want to infringe on their private space. You understand that even though you own the property, it is still their space; if your tenants do not have privacy, they will probably leave. And that goes for a family or a business; the family has private, personal things that happen behind the walls of your house, and the business is going to run a company without you in the way.

So, it’s all peachy. You’re a landlord, and everything is going smoothly.

That is, until your phone rings at three in the morning. The little boy in the family has clogged the toilet, and they want you to go fix it. “Use a plunger,” you tell them, but they insist that you come unclog it for them. Or, things are going fine, and the business says to you, “We are very successful and need a larger property, we’ll be moving.” You realize then that it will be very difficult to get a new company in your walls, but you need on in their now. These scenarios start happening more rapidly. The more comfortable the tenants are calling you, the more they call you. Sometimes you get so frustrated with them you want to curse at them and kick them out of the house. You don’t know what to do.

These kinds of scenarios are common for new landlords; this is a fairly normal set of circumstances. What do you do? We will be posting more information to help you deal with exactly these kinds of problems.