Finding Great Tenants.

Now, how do we find great tenants to maximize our profit? 

First off we do a lot of advertising.  You want to get as many people there at one time as you can.  Our best source for tenant buyers has been 18X24 inch plastic signs that say "Rent to Own" in big letters and then under that "Nice Home" much smaller and then our 1800 number that leads into a voice mail system.  Believe me you don't want to take all of those calls on your cell phone.  I have had over 100 calls in 2 days after putting out a bunch of signs.  You want to put out at least 25 signs every week.  You can get signs from www.witnessdesigns.com.  They are the cheapest that we have found.  Let the voice mail screen those for you.  We use a service called GotVMail (Disclaimer: I am an affiliate of this site but only because I think it is the best service out there).  We also run ads on www.craigslist.com and www.rentclicks.com.  News papers are getting less and less effective.  Test it out in your area to see what works.

After you have cranked up your marketing you want to make sure that you are returning phone calls and e-mails to set up a time for people to meet at the property.  I call people back and ask them these questions:

Hello (Insert name), I am returning your call our our rent to own property in (city name).  Is this a good time?  Great, I have a lot of names to get through so I just have a few quick questions for you. 

• Where do you currently live?
• How much is your payment there?
• How many people will be living with you in the property?
• How much money do you have to work with for a down payment (I ask this even though my voice mail script asks them for it because the number might get bigger)
• Great, I have some time on Thursday at 5:30 or Saturday at 1 PM to meet you at the property.  Which would work best for you?

You want to control the conversation.  If they start asking you questions, just tell them that you have a large list of people to call through and you would be happy to answer any questions that they might have at the property when they have seen and like the house.

Then you repeat this process and get as many people at the property at one time.  Competition is a very powerful thing.  It shows other people that the house is desirable (social proof) and that if they don't make a decision today they are going to lose the property.  The fear of loss is one of our most compelling fears that we have.  We will work harder to keep someone from taking $1000 from us than we will to make $1000.  The same is true of the house.  If it looks like someone else is going to take the deal we will do just about anything to make it work. 

At the showing take as many applications as you can get along with the fees.  Then after you get the applications immediately ask the potential tenant if they would like to put a deposit down to hold the property.  These deposits are non refundable if they back out.  If you decide not to choose the tenant then you return the money immediately.  Get as many deposits as you can and choose the person that is most financially able to keep you secure in the deal.  Don't skip running the background checks on people.  You can avoid some major problems by using proper systems to screen people.

Using these ideas you should have an abundance of people at your property to choose from to maximize your profit.

I will share our new system for renting out a property in 5 days next week.  JB, one of our students tried out the idea, and we have been tweaking it with great results.  If you have questions or comments please feel free to leave a comment.    

Comments

[Curtis]

Patrick, this is some great stuff. Were do you prefer to post your signs?
Thanks
Curtis

[Patrick Lonergan]

I put them at busy intersections. I put them on wire stakes and I have found that I will get about 50 calls for every 25 signs that I put out. You want people to go into a voicemail system so they can be prescreened. You also have better things to do with your time than talk to 50 people over your weekend.