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Resources Mentioned on this Episode

https://rentprep.com/tenant-screening/questions-to-ask-potential-tenants/

Show Transcription:

00:00 Hey everybody. Welcome back to another episode of rent prep for landlords. This is episode number 267 and we’re going to be talking about if I should sell the farm or not. You’ve probably heard a lot of landlords say this, you get frustrated, you hit your absolute widths and mortality know where that saying came from? Wits end, but you know what? You’re like, I’m going to sell the farm. I’m just gonna get rid of this. I’m out. I’m so sick of this. And then the next day you’re like, ah, I guess I could do this still for another few years. So I’m in that space right now. I want to talk a little bit about the headspace around that and also a a really great win that I’ve been having on my rental property lately. We’re delivering really quality tenant applicants that I’ve been getting in so far and I want to share that tip with you, all of that right after this…

00:43 1,2,3,4 ya ya ya…. Welcome to the RentPrep for landlords podcast. And now your host, Steven White and Eric Worral.

00:50 So before we get into today’s podcast, one thing I do want to update you on in case you are in Pennsylvania or you ever have a tenant applicant from Pennsylvania, they have instituted what is called the clean slate act. It’s the first day to do anything like this of its kind. But basically what it’s doing is they’re sealing more than 30 million criminal records. So the legislation is the first of its kind of opens up a reopens channels to Housing and employment that might otherwise be closed to individuals with criminal histories. I’m reading this from reason.com and it said the state will now automatically seal records of those who were found not guilty, those whose charges were dropped and those who committed low level offenses such as prostitution and shoplifting, if they have remained crime free for 10 years.

01:42 So that may not apply to a lot of our listeners if you’re either outside of the states or not near Pennsylvania. But I figured I’d throw it in there. And it’s also relevant to all the landlords because usually what happens is they’ll test something like this out. And you know, you’re actually seeing this right now with legalizing marijuana. It hasn’t been that long, maybe five years since it was legalized in Colorado and Washington. And now you can see how the other states are kind of joining in and that adoption curve is kind of catching up. So, uh, it’s really interesting. A, if you ever, uh, have time, uh, Google adoption curve. Uh, I know I’m kind of going on a tangent right now. I forget the guy’s name. I think it’s Roger’s adoption curve and basically it explains how people adopt ideas and what are, um, where they are on the curve. So, you know, I love a good tangent, so why not? We’ll talk about it in the Roger’s adoptions curve. There’s different, um, different categories. Innovators are the people at the very front of things, right? So you can see that Colorado was an innovator for legalizing marijuana. Then there’s early adopters. So then, uh, I think after Colorado probably went to like Washington or another state. And then there’s early majority, which is really the, the meaty part of it, the, the top of the, the middle of the bell curve. If you can visualize a bell curve, um, chart and then there’s a late majority, and then there’s laggards. So with everything that happens, I’m, right now what we’re seeing is that Pennsylvania is an innovator of the adoption curve where they’re the first that has this a policy where they’re sealing 30 million criminal records. What you’ll see in another year or two is other states that we’re thinking about doing it. They’re like, okay, somebody jumped first, we’ll follow. Then all of a sudden you’ll see a bunch of states. And that’s where we’re kind of at right now with legalizing marijuana. And then, um, eventually it’ll kinda like go the way of, uh, the majority of the state is doing it. I don’t know if that’ll happen with this particular case with a sealing this many criminal records, but I’m of the opinion if they’re a low level offenses, they were dropped or they were found not guilty. Um, that it’s not a bad thing cause you’re talking about a 10 year window of being clean. Um, same thing. If somebody had an eviction 10 years ago, I don’t know if I’m well based on that CRA you’re not using that data, but if you just happen to find that out, like are you really going to judge somebody for what they did 10 years ago? I’m of the school of thought that, you know, people change and they grow up and they’ll uh, improve their lives and it’s more about what they’ve done in the last five years or something like that.

04:04 So something to consider. But all that tangent aside, let’s get back to today’s talk. Uh, we are talking about selling the farm. I see it all the time in the Facebook group rentprep for landlords where people just get so tired of being a landlord. And especially if you’re managing your own properties, you self manage. I completely get it. It is not an easy job. I only have two units and I get fed up with it sometimes and sometimes, you know, uh, I don’t believe in the magical thinking and you know, uh, I’m not somebody who, uh, you know, has to like click their heels twice together before they’d jump over the, uh, the lion in the softball field or something and they can’t touch the chalk because, you know, if you do then you’re going to strike out. I don’t know, I don’t believe in superstition that much, but it does feel like things come in threes and lately they’ve been coming in threes for me. So I’ll give you an example of what I’m dealing with actually just yesterday, but it’s been the last week. Um, one day, uh, I’ve been renovating the rental property and I’m really like really going after it. And a lot of that is because of what I’ve learned at Rentprep Cause what I’ve learned from our community and the idea of like getting really solid tenants a lot of times is based on the quality of your rental. The kitchen that I had was in a very dire need of an update. So I’ve dropped about $6,000 into the kitchen between cabinets, counters, um, a new faucet, sink, appliances. I mean, I just did the whole nine, but I got a really beautiful rental property right now. And tonight I’m recording this. On July 9th, I’ve got my first showings and um, I’m going to be, uh, showing it to a couple different people and I’m kinda charging in our market in North Buffalo, their 1350 is starting to approach really at the top of the market for these types of rentals. So I’m excited to see how that goes. But just like three days ago, I was like, man, I’m done with this. I am absolutely done with this. Like I was past. Right? And the reason being was I was working at the rental property all day Saturday and I was just exhausted. It’s been really hot out in Magee and I’m cleaning. I’m like, uh, trying to fix things. I’ve got all these little tiny things that you know, over time go wrong in a rental property, like the Vanity Mirror is just tilted a little bit. So I’ve got to readjust that. The Faucet in the tub is leaking ever so slightly. So I’ve got to go to value and get this like a replacement washers for that and fix that. The um, the, the house just needs a dusting and cleaning. The tenants did not Right job cleaning up, but I mean they’re not like professional cleaners by any means, but the thing that really got me as towards the end of the day, I was there 10 hours on Saturday. I was delightful little Saturday afternoon. But you know, I’m getting to that point where I’m hungry, I’m tired and I turn on the faucet in the kitchen sink and there’s just a slowest drip ever and the pipes underneath and I am like, you gotta be kidding me because it’s all new. Like it’s all freshly mint. Like I’ve had issues with that kitchen sink for a long time. I’m always leaking. And it’s partly because the pipes are a little old that it’s leading into, into the basement, but just the slightest drip, drip, drip, drip, and like just that little bit of water that accumulated maybe like 100th of an ounce after about five minutes drove me insane. I was like, that’s it. I am selling the farm. I’m getting rid of this thing. I even called my buddy who’s a realtor, was asking him where you think you’d get for it in this market? And I’m like, tell my wife, I’m like, I’m so done with this and blah blah blah, blah, blah. And it’s funny how you hit those moments right where you’re just about to like, you just can’t stand it anymore.

07:52 And if you’ve been a landlord long enough and you’re, uh, as emotionally fragile as I am, he had these internal and external dialogues before and I’ve done a lot of reading over the last year or two and you know, self help books like a lot of people do. And uh, one of them I liked, I think it was called a tools of titans. And uh, it’s by Tim Ferriss. And you just, you know, interviews like 150 really successful people and they give you just like some really quick bullet points of things that are working for them and things that they think about and what they have to do. And I don’t even remember who it was, but she said that one of her life hacks is, is that when she runs into an issue or a scenario or a problem and something’s just kind of like really bugging her. So you can say moment where you’re like, I am going to sell the farm. I want to get rid of these Rentals. I’m so sick of this, I’m done. I’m out. Like whatever. She said, she always runs through a mental checklist before she ever makes any kind of decision on anything. And her checklist is how well did I sleep last night? Am I hungry, have I exercised? And that’s it. Those are the three things that she does. And she says that a lot of times when she has this mental anguish and she’s like maybe in that state of like somebody who might solve be like, you know that tenant called through something and it’s like that’s it, I’m done. You might just be hungry, you might just be tired or you may have just like not exercise and while and your body just needs that. You know? I thought that was pretty simple because I, the nice thing was I started to go down that rabbit hole and I was like, you know what, I’ve been here nine hours on a Saturday. I’m tired. Like I woke up early and I’m just really tired and that’s all this is. And did my wife had to listen to me complain about it and did I call the realtor? Yes. I started kind of getting some information on it, but the next day I woke up and I was like kind of okay with it. Then Monday and I get in touch with a couple leads and all of a sudden I’m feeling better about it. Now it’s Tuesday. And I’m excited about the idea that I have a potentially really good candidate coming in to look at the property and now I’m like kind of back on board with like, yeah, I could do a rental property. You know, like, this is fine. It’s not a big deal. And it’s funny how your mindset changes so much so quickly. And a lot of times just run through that checklist of, are you tired? Are you hungry? Have you exercised in awhile? And sometimes you can’t, like, you know, address all those immediately, but sometimes you can just go get some food or you can just like go for a quick walk and kind of release your mind a little bit.

10:17 But, uh, one of the things that, um, my buddy that’s realtor’s name is Matt, he’s talking to me about, he’s like, dude, he’s like, you’re going to get crushed on like capital gains on that property because it’s appreciated over the last 10 years, probably like, I don’t know, 130, $140,000. And he’s like, talk to your accountant before you do anything. And he’s a realtor and I appreciate this about him, that he said, you know, I’d love to sell the house, you know, and make a commission. But he’s like, talk to your accountant first, get your ducks in a row and make sure you fully understand what the tax implications of this are before you sell. And another thing you can do is you can always 10, 31 exchange to this property into another property. And he said, you know, one of those things you can do is you can, if you want to buy a vacation home, you could 10, 31 exchange it and then you rent that vacation home out on airbnb weekly. And then maybe you just stay in it for that one week of the year that you want to use it, you know, and then that way the capital gains are released and you’re not going to be, um, taxed on the increase of the property investment and you’re going to save money that way and be able to, you know, parlay it into something else. So there’s always a lot of options out there and you always want to talk with your account and verify everything, you know, before you just go doing something based off of a podcast or something like that. But there’s so many options. Collect data, get your mind right. And I’m not really talking to you. I’m really talking to me because I was just like in such a bad space on Saturday and now I’m like, Oh, I’m doing pretty good. It’s all right.

11:43 And one of the things that’s also helped me a lot, um, as I’m going through this process and I really like doing this though, I actually, as much as I don’t like doing it cause I’m spending so much time there. I was there last night. I’m going there tonight. I was there all day Saturday. I was there, um, last Wednesday and Friday. Um, but one of the things that’s been helping me, and maybe you’ve heard me talk about it before, is building a screening survey for your 10 applicants. So right now I am set up through Zillow, hot pads, Trulia, uh, um, doorstep, realtor.com Facebook marketplace. All these different places. And I’ve got my listing set up. One thing that’s worked really well for me is I created the cover image, which if you go to the Rentprep for landlords Facebook group, and you look at the pinned comment right now, it’ll show you what that cover image looks like. But what I did is I highlighted all of the best aspects of the property with a nice photo in the background so that when somebody’s scrolling through Zillow, all of a sudden you see one that has these bullet point lists of like, Oh, new appliances, garage parking, great location, all that kind of stuff. So the, um, that image I think has helped me bring more people to my listing. But then my process, when they want to ask questions, a lot of times people go right to like, hey, can I see this? I don’t want to show everybody the apartment. You know this, right? You’re gonna waste your time. I send them to a Google form I created and I’ll pull the Google form up right now and kind of a walk through it with you guys. Uh, when you hit the Google form, uh, it has a title and it says North Buffalo rental with garage parking, please fill out this form to be considered for this rental property. As to reminder, this property is on lovering avenue. North buffalo includes one garage parking spot, new fridge, microwave and all that. The rent is 1350, which includes all the amenities including Washer, dryer. So, uh, that kind of, you know, beneath that is that same cover image. So they know they’re in the right place, right? So they know it’s the same property that they were just looking at. And I asked them for their full name, phone number. Do you grow us at least 4,050 a month in income. Uh, so that’s the three x rule, right? I’m asking for 1350 times three is 4,050. Yes or no option. If they click, yes, they go to the next question, which is do you smoke? And I write on there, we do not accept smoking anywhere in the rent or on the property itself. So if they click no, they go to the next question. And they say, do you have any reportable evictions on file? I wrote reportable because again, you don’t want to like ask them have you ever been evicted because an eviction from 10 years ago is not reportable on a background check. So you do not want to use that. You only want to use evictions that are within the last seven years. But I used to use the word reportable because in some states they even shorten that to five years. So if they click no, it moves them to the next question. Do you have any animals? Uh, if you’ve ever listened to our podcast on ESA, uh, Jamie, who was the attorney on that podcast said, start using animals instead of pets. So if they say no, they moved to the next question. Are you willing to submit to a background and credit check? Um, and this one, if they click yes with, there’s a little context here. I say we require each 10 an applicant interested in living in the apartment or the age of 18 to submit to a credit and background check. We will not accept previous evictions on file or a credit score on her 670 where I came up with 670 is we did a um, analysis of close to 500 credit scores, uh, on reports that we run here at rem prep. And we did a random sampling and 670 a was the average credit score. So this is a pretty nice property, but it is a rental, you know, but these, the, I wanted to at least a 670 credit score. So if they click yes on that, that they’re okay with running a background check, they will get to the final page that says, thank you for filling out this form. Here’s the next step. You meet all the minimum criteria to move forward in this process. Please click the submit button, then schedule a time to chat in the next screen. So at that point when they click the submit button, I get an email and it says that you have a new submission on this Google form. I go in, I see their name, their contact details, the answers that I was looking for that they had to answer correctly for me to um, accept them. If at any point during that survey, uh, they click the wrong answer. Like they say, yes I do smoke. It would kick them to this page that says you do not meet the minimum criteria for this rental. Sorry, but you do not meet the minimum criteria for this rental property require that you make at least 4,050 a month, three times the rent amount. You don’t smoke, don’t have pets. Zero. I should probably have, don’t have animals, zero evictions on file and are willing to submit to a credit and background check. Thank you for your time. So I can’t actually tell you how many people have hit that page a because I don’t get their contact details, which is good. I don’t want those that contacted you. Tell. I don’t want the conversation to continue. I want the form to handle the rejection and then I want to follow up with these other people. So what happens on the final thank you page for the people that do get through my whole screening survey, they um, hit a thank you page and it says, uh, to schedule a time to chat about this rental. Please click the link below. It’s a Calendly link, c a l e n d l y. com. And what I did is I set a time, 15 minute increments, seven to nine every night that they can pick a time slot to chat. So, so far I’ve actually been calling people ahead of that, but it makes it so it puts it into the calendar so we have a time to talk and then I know exactly when to call them because I’m not great about answering my phone. I have my phone on silent all the time. I don’t like make a ton of calls or take calls like during work and stuff like that. So that schedules that out. And what I’d done at this point as I’ve gotten, uh, three different candidates that have worked through this process. So what I know about them is a, at least what they’re telling me, and you know, I’m assuming it’s accurate, um, that they’ve gotten through and they didn’t get screened out at this point, but they can actually take the steps to do it. Cause one of the things I’m going to do is I’m going to want to get them on a digital rent payments. So that’s gonna take somebody who can go through those steps. I’m going to want to be able to communicate easily with them through email. And this is telling me that this person’s capable of doing that and following directions as well. And a, yeah, I got a showing tonight at six that I’m really interested in. It’s the first showing I’m doing, and then I’m trying to line another one up confirming at 6:30, uh, Kim Hampton from Hampton and Hampton who has been on the podcast, um, subscribes to this of doing like 15 minute increments, a showings every 15 minutes. She doesn’t like doing the open houses. Um, but I like that. I’m going to test that out and I’m gonna see, I have another call today. I’m gonna see if that person wants to actually come at about six 45. So trying to make tech work for me, if you’re interested in how to do that, uh, just Google it. Just Google a actually a Google Google forms and then a, you can also look up with logic. Uh, logic is the thing that’s gonna decide. If they see a, uh, a thank you page or they see that you don’t meet the minimum criteria, it probably took me about 20 minutes to set up.

18:27 But now when anybody from any of those different services, Facebook marketplace, Zillow, whatever, they ask, hey, I want to see this property. Go thank you for your interests, um, to be considered for the rental property. Please fill out this form in its entirety. Thank you. And that’s it. I haven’t gotten any other questions back from that. And I’ve gotten three people who’ve gotten through, which is not a lot of leads, but my initial interest was like closer to like 15, 20. So the funnel is working in that I’m taking 15-20 applicants down to three and I’m not wasting my time with the, you know, 15, 17 people who couldn’t make it through or didn’t take the effort to fill out the form. And now I’m dealing with a really small population of people who are really interested in, I already know they’re willing to submit to a background check. I mean, the one um, group of girls that are interested in it already told me, they’re like, oh, we already ran like our credit ourselves. Uh, we’ve got 720 750 and 770, you know, she’s giving me all this information without me even asking over the phone. And I’m like, that’s great. Like I already know this information before even running a background check. So, uh, just doing these little things, setting it up and I don’t, I’m kind of all over the place on today’s podcast, but just kind of filling in where my mindset’s been at and I think I’m going to run it as long as I can get the good tenants in. But I definitely, like on Saturday it was like, I’m done. I’m done. That like one leaky faucet underneath the kitchen sink. I thought it was going to do me in, but I was just tired.

19:48 You know, I know this is a good investment for my future. Uh, there’s so many great advantages of rental properties, especially with a tax implications and being able to keep onto it. Uh, so doing the right thing. Uh, but sometimes, you know, you get a little little squirrely up, up in the, uh, up in the skull, right? And, uh, you get a little, uh, worked up, uh, which is fine. It happens. And I’m sure if you’re listening and you’re somebody who’s got 10, 20, 30 rental properties, you’ve got it all the time like that. Right? But I’m having a good mental makeup and being able to, uh, make sure that you’re, uh, staying on top of things and, uh, make sure your, you know, your eating well, sleeping well, and you’re finding time to exercise. And that’ll probably solve a lot of those conversations for you. So if you’re interested, you can always reach out to me. At Eric@rent-prep if you have questions on the Google Forum, I’ll try and include some resources to that in today’s show notes for episode 267. I believe I got that right up and talking for a while, but, uh, yeah, check it out. And, um, if you ever have any questions too, you can always join the rent property, landlords, Facebook group. There’s a lot of great resources in there as well. All right guys, until next week, have a great week. Take care.

#267 I’m Selling the Farm!

Can you do us a solid?

Resources Mentioned on this Episode

Show Transcription: