I always dreaded tenants moving out. I had to conduct the final inspection to determine what needed to be fixed, cleaned or taken out of the bond. The worst part was the disagreements with the tenants. It didn’t take me long to realise a good condition report meant less disagreements and a well left property.
A few weeks ago I received an interesting message from a long time reader of our blogs with a link to a great resource they had put together that helps you figure out if your potential tenant is going to a good or bad one. They asked me to share it with you however it was just not that suitable for the process we take in Australia to screen tenants. So I had to make a few changes before it was appropriate for you. I have now made the tweaks and here it is.
Way to go! You’ve placed your ad, held the inspections, received and screened the applications and finally chosen some great tenants. So what’s next? There are some important things to accomplish before you can hand over the keys. Setting the stage now, before your new tenants move into your property, is incredibly important to get right.
I still remember the pain.
I would wake up in the middle of the night, wondering if the next rent payment was going to come in. Will the kitchen or the new carpet be ruined? It almost killed me.
My worst tenants ever, and they were only in the house for two months. Those two months felt like two years! EVERY DAY I worried what the next day might bring. After I got court orders to kick them out, they graffitied the whole house from top to bottom. I will never go through that again. Never!
People have been placing For Lease signs in front of houses for almost as long as they have been leasing houses and printing signs. Certainly for much longer than they have been advertising houses for rent on realestate.com.au.
Rejection stinks. It is no fun to be rejected, and it’s not much better to give a rejection. Unfortunately, if you have more than one application for your rental property (and hopefully there are several), someone will have to miss out.
We tend to focus on selecting the right tenants, so we forget the effort that a tenant puts into making a good application. As the owner, it is up to you to get the best tenants you can, even if you have to break someone’s heart.
Ignoring a Rejected Tenant Application can Lead to Trouble
Rather than facing those you don’t want living in your property, some agents choose to ignore the tenants which they cannot accept. That is not good enough. Especially when you consider that coming out for an inspection and completing a tenant application requires a good deal of effort. Some prospective tenants take it as a personal insult when their application is not accepted.
Personally informing the tenants that you are forced to turn them down shows a lot of class and its actually very simple if you know how. The trick is to get it done quickly with little fuss. Let me show you how…
Change the Heading in your Ad to UNDER APPLICATION
The most important reason for this step is to save you from getting calls for a house that is essentially off the market. Yes, removing your ad does the same thing, but UNDER APPLICATION keeps the ad active in case your tenant falls through at the last minute.
However, it does not save you from those disturbing calls from applicants who have not seen the updated ad. The best way to avoid that is to beat them to it!
Get in First and Make the Call
Contacting applicants before they contact you is a magical tactic. The magic is that they are not prepared for the encounter, but you are. This gives you the opportunity to be direct and to the point (but not short or rude, obviously). Then you can get off the phone before they have time to think it through enough to ask questions.
Here’s a basic script I’ve used to get in and get out quick. Let’s pretend the tenants name is Hannah.
“Michael: Hi Hannah, its Michael, how are you?
Hannah: Hey Michael, great how are you?
Michael: Not to bad thank you, I’ve been really busy with all the applications.
I just wanted to let you know that unfortunately you have not been accepted for the property.
We had quite a few applications and they were all really good. However, do you mind if I call you back if the application falls through?
Hannah: Yes please thank you.
Michael: Thanks for your understanding Hannah. Good luck. Bye.”
Sometimes the unsuccessful applicant will be on their toes enough to question why you did not accept them before you say “Thanks for your understanding”. Have a good answer ready: “To be honest there was no particular reason, it was very close even after we went through all the applications”.
My friend Rhonda has a slick solution when she has someone asking why their tenant application was not accepted. She says that there were a lot of great applicants, but in the end her husband had to make a decision!
The Easy Way Out
The problem with calling is that you cannot really script the call; they always go differently than expected. However, an email always goes according to the script. If you send the email out in bulk to all your applicants, be sure to use the “bcc” (email sender option) so the applicants do not see each other’s email addresses.
Here is a sample format for your email:
Thank you for taking the time to apply for my property at 123 StreetName Drive.
After carefully reviewing all the applications, I am sorry to inform you that we have decided to go with another application. Your application was very much appreciated, and if the approved application falls through I hope you don’t mind if I get in contact with you.
Thanks again for your application and good luck in your search.
All the best,
Rules to Remember
Even if you have a specific reason to reject an application, do not reveal it. You will just open a can of worms.
Keep your contact short and sweet.
Get in first and don’t give them an opportunity to come back asking questions.
The more applications you have, the better chance you have of selecting the best tenant.
My friend Kylie is a busy lady. Between a successful career and a growing family she barely has time for herself, let alone friends. So I was surprised and pleased the other day when she called to invite me for a coffee.
She and her husband Tom recently bought a second house as their first investment property. Now they are ready to see some return on their investment, so she came to me looking for some guidance for self managing their property.
Warning: This next statement may disturb some readers.
Over the past month I have been tracking the performance of 20 properties on realestate.com.au. Those properties were viewed 19,726 times. From those views came 420 enquiries. That works out to just one enquiry for every 47 views.
Ok sure, some of them would have been the same people going back for a second look but for arguments sake it took 30 different people to click into the property for 1 enquiry. This means 29 out of 30 people read the descriptions and decided that the property wasn’t right. So, if they are clicking and reading the ad, why aren’t they making enquiries?