Qualifying Rental Leads
Leads for filling a vacancy can come from personal referrals from tenants, family, friends, co-workers, business contacts within the community, rental property websites, online rental listings, traditional advertising, and social media. Qualifying leads to a good lead, that is, determining the likelihood of converting a lead to a prospect interested in becoming a tenant is the landlord’s opportunity to fill a vacancy quickly.
Posting an online rental listing is a common advertising method to bring in a number of responses for initial qualification. When posting the notice of vacancy, a landlord hopes to create interest in his rental unit that can be soon converted to a tenant in residence. Rental prospect response to the listing provides pre-screening opportunity to gather information, assess risk, and qualify the prospect to minimum rental standards.
An online listing should include basic rental information such as the street address, community name, number of beds/baths, square footage, rent, lease term, and deposits. The listing should include interior photos, as well as a few photos of the building exterior and grounds. A floor plan is an additional listing feature that many renters find beneficial in their rental searches. Having this basic information in a rental portfolio helps to reduce landlord time in qualifying leads. Having the street address and rent amount in the listing allows viewers to assess their interest by visiting the property and to pre-qualify themselves using the rent price point. Contact made with the landlord after viewing the rental listing is a prequalifier in itself. The prospect is informed and receptive to committing time to learn more about the rental unit/community.
Landlord response to an initial contact is important to project a favorable first impression of the landlord’s rental community and an opportunity to market all features and amenities to the prospect.
Qualifying a rental lead by asking a prospect a few important questions can quickly move the rental process forward to filling a vacancy. Whether the initial contact is by phone or in person, it must not be used as a means to screen out prospects by asking leading questions or stereotyping prospects by language and speech patterns or by any other characteristic that is prohibited by federal, state, and local fair housing laws.
A landlord should have a standard set of questions to ask all prospective renters who contact him regarding a vacancy. Using a set of standardized questions will help avoid claims of discrimination.
When a landlord prequalifies a prospect, the objective is to determine as quickly as possible in a professional manner whether the prospect is a viable candidate for tenancy with potential as a good long term tenant. Information gathering, as long as it is done legally and with full knowledge of applicable laws, particularly fair housing laws, is important to selection of a quality tenant. A few questions can be well worth the effort in order to better protect the rental investment by reducing potential risks of a bad tenant.
How many questions should a landlord ask a prospect? Too many questions may turn a prospect away. A landlord should keep in mind that the simple act of a prospect making first contact is a promising lead. If a landlord prioritizes prequalifying questions to those questions that confirm interest in a property showing and becoming a renter, a prospect should be open to respond to learn more about rental requirements.
What are some examples of questions?
“How did you learn of vacancy?”
A landlord can use this information to determine the effectiveness and placement of his advertising/marketing efforts.
“When do you wish to move in?”
A response that the prospect wants to move in immediately or within a period less than 30 days could signal a problem for any number of reasons. Responses that suggest the prospect has a pending eviction, past due rents or other lease violations at his current rental should be a red flag to the landlord.
“How long have you lived at your current address?”
A landlord may wish to determine if the prospect is still under lease with his current landlord.
“Why are you moving?”
Typical responses are to get more room, changing jobs, or to be near family. If the answer indicates a problem with the previous landlord or neighbors, it could be a red flag that requires additional information.
“How long do you plan to rent?”
Most landlords are looking for a stable, long-term tenancy, typically a one-year lease agreement. A response such as “it depends” may indicate a prospect isn’t committed to a firm decision for moving or has other issues that the prospect is unwilling to share with the landlord.
“How many people will be living in the rental property?”
Landlords set occupancy limits based on regulations and codes per local building, health, and safety standards as well as limitations set by property size and mechanical/system/utility constraints. A maximum number of occupants for square footage space may be specified by local ordinances. If the number of potential occupants exceeds recommended standards or the prospect indicates an uncertainty regarding the number of occupants (i.e., it varies), it could be a potential red flag for the landlord.
“Our rental process includes written application, screening fee, tenant screening for credit report, background screening, verifications for identity, employment/income, rental housing history, and landlord references, security deposit and first month rent. Will you be able to meet our rental requirements?
If there is hesitation on the prospect’s part to agree to the rental process, the landlord may decline to go forward with the preliminary screening/information process.
Additionally, the prospect should be made aware that all adults wanting to live in the unit are expected to complete full tenant screenings and to sign the lease. Possession of the rental unit will not be given unless all applicable fees, deposits, and rents are paid per terms and conditions of the lease agreement. If the prospect counters with alternative arrangements, such as payment installments, the landlord should be prepared to answer according to applicable landlord-tenant statutes for his state, and his previously stated business policies and practices. It may signal a red flag to the landlord if the prospect is not prepared to pay required move-in funds at signing.
Other Rental Policies
A landlord may want to provide information on other rental policies, such as pets, parking and vehicle registration. If the rental unit and property are smoke-free, a prospective tenant should be aware of such restrictions.
Other Questions
After a landlord and prospect have discussed the rental terms and conditions, policies and practices as noted above, the landlord should ask the prospect if he has any other questions. Although much information was already provided, the prospect may have thought of other issues that need clarification or should be discussed regarding his rental situation.
Final Question
If the landlord determines that the prospect is a potential candidate for tenancy, the landlord should proceed with scheduling an appointment for showing the unit using appropriate guidance and technology for an on-site visit or virtual tour.
Documentation
It is a good business practice to keep written, dated documentation of all responses to the advertising of a rental vacancy, including the corresponding action that was taken, such as application submitted, prospect declined to apply, or the prospect did not qualify to stated rental standards, and the address/unit number of the advertised vacant rental unit, to help defend against possible claims of discrimination at a future date.
In summary, pre-screening a potential tenant is a risk management measure that saves time and money for a landlord in the overall qualification and selection process of a quality tenant.