Speed vs Accuracy: Efficiently Finding Quality Tenants
The Dallas-Fort Worth rental market is one of many (and one of the most) competitive rental markets in the nation. Due to the upward-trending boom in Millennial and Gen Z populations, as well as the unexpected conditions of the pandemic and the Texas freeze – there is a crunch for renters applying to properties. You may have felt the crush of applications and with it, the anxiety of meeting such an increased demand. While it is better to have more options rather than fewer when it comes to applicants, as paperwork piles up you may find yourself rushing to approve someone for the sake of having it done.
Not so fast.
You want to find a tenant who meets the standards you hold for the property. While you are not holding out for the best possible tenant in existence, you do want a tenant who absolutely qualifies. With the increase in document fraud and online scams, reviewing your potential tenants with a fine-tooth comb is necessary. But how are you able to do so when you have multiple applications on one property? When you are processing them all yourself while also receiving calls and emails and texts from agents, interested parties and applicants following up on their applications? Here are tips on how to be efficient, effective and most importantly, accurate in reviewing your applications:
Use an Application Portal
In a competitive market, applicants have zero time to waste. As properties are being snapped up, they need to be able to apply as quickly as possible. That means not having to trek to your office to pick up an application.
An application portal guides applicants through the process intuitively. Portals that require a registration will help you better track your applications to easily parse the completed apps from those in progress.
State Qualifying Criteria Up Front
It is your legal obligation to require that every applicant review the qualifications for the property that you manage. This includes the income requirement, your policy on the credit history and criminal background check, pet policies (including breed restrictions) – absolutely everything that needs to be considered before submitting an application. Eliminating the most obviously disqualified applicants before they apply is sure to lighten your workload and save both you and the applicant some disappointment.
Charge an Application Fee
If you want everyone to participate in a program, you make it free. When you want to restrict participation to interested parties who can pay, you charge an admission fee. It’s also true of applications. Processing applications costs time, and running screenings for applications costs money, which justifies charging an application fee.
You may, however, consider a reasonable compromise for your applicants: If you don’t process their application, don’t process their payment. If you have spent no time on an application and did not run a screening, then the applicant paid only for the privilege of being on a waiting list. This can leave a bad impression with applicants who would otherwise try to rent with you at a later time, or if your accepted tenant falls through. Renting housing is a business, which means that customer service is something to consider. You are not legally required to refund application fees at all in Texas, as application fees are considered nonrefundable so long as the law is followed.
Process Applications on a First-Come, First Served Basis
Utilizing an application portal makes it easier to pin down when exactly an application is submitted. Prioritizing applications on a first-come, first served basis is the easiest way to stay compliant with the Fair Housing laws, eliminating the opportunity for any bias to come into play when reviewing multiple applications. You simply take whoever is first, and work that application.
There is a big however – just because an application is submitted first does not mean that the application will remain in first place. When reviewing multiple applications, if your first application is missing documents or information, move on to the next completed application in line while they get back to you. An application can fall from first place to second in line, and so on and so forth as more applications provide everything that is required. Keep the lines of communication open so that your applicant can have the opportunity to provide the materials, but by no means should you lose out on the next potential applicant waiting on the first. Remember, these applicants are moving very quickly in this market, so while you may have multiple applications, don’t mistake any as a guarantee. Many applicants are inquiring into several different properties at once. There is simply no time to waste. Communicate quickly about missing information and move on.
Once you have the broad strokes of receiving applications down, you’ll find it easier to work through your application list in an orderly, systematic manner. Creating a Standard Operating Procedure in this way will help you be consistent and organized in the face of waves of applications. Knowing when to move on, who is immediately disqualified, and where to narrow your focus will help you find the right tenant in the right time.
If this sounds like a job in and of itself – you’re right! Frontline Property Management has a department that is dedicated to processing applications for our clients! Our Tenant Coordinators work daily to communicate with potential tenants, review documentation, run screening reports and comb through the details so that our Property Managers have all the facts when reviewing the results.
Contact us today if you’d like to leave the application process to the professionals and start enjoying your investment as a truly passive income!
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Application Process: Pets
As a landlord, you have no doubt by now heard some serious horror stories. At the heart of every issue is a problem tenant – something you’re hoping to avoid by creating a thorough and fair screening process. A question you should ask every tenant is “Do you have any pets?”
A question you should ask yourself is: Do you accept pets?
Accepting pets in your rental property can be advantageous in an increasingly pet-friendly market. Understandably, though, you might be hesitant to. Those afore-mentioned horror stories? Many of them include issues revolving around animals being kept in the property.
Whether or not you want or should accept pets in your property is completely a matter of choice and preference. As with everything else in property management, it’s a risk/reward situation.
Let’s briefly examine those:
Why You May Not Want to Allow Pets:
- Risk of Physical Damage to Property
- Liability of Pet-Related Injury
- Cost of Cleaning / Pest Treatment
- Disturbance to Neighbors
Why You May Want to Allow Pets:
- Increases Applicant Pool
- Reduces Pets Being Snuck Onto Property (for free)
- Charge More in Rent
- Longer Tenancy (due to unavailability of other pet-friendly residences)
In a time when pets are increasingly considered part of the family rather than property, you will face the question of “Do you accept pets?” more and more. Here are steps you can take to address the concerns of pets in your property, and how to consider handling pets in the application process.
What You Can Do:
1. Be Clear in the Listing & Lease
If pets are not allowed, ensure that this is stated clearly in the listing. If the property is listed on multiple platforms, make sure that every posting states that the property is NOT pet-friendly. This will be an automatic deal-breaker for anyone who has pets, and will save you and the prospective tenant both time and frustration over the application process.
The lease should also clearly state that pets are not allowed on the property at any time, and specific penalties should be noted. This will help support your claims in court, should it come down to collecting money for charges related to animals being present in the home.
And yes, even though you have made it clear that the property is NOT pet-friendly, still put the question on the application. This makes certain that the tenant clearly states in writing that they do NOT have a pet.
2. Know Your Target Demographic
Millennials will make up 75% of the workforce by 2025. Having been hit hard by recessions, millennials are unable and unwilling to take on more debt in the form of a mortgage, and so is a demographic of majority renters. Nearly three out of every four millennials have a pet – and they will look elsewhere if their pets aren’t welcome. That’s quite a big swath of future business!
Your target demographic may not lean millennial – for now. Make the best decision that fits the needs of your market and the tendencies that cater to those renters. They are your livelihood, and what the market demands will determine how profitable your business will be.
3. Establish a Restricted Breeds List
Bad dogs come from bad dog owners, but an unfortunate human tendency of bad ownership has resulted in some breeds being restricted in residential properties – even neighborhoods and counties! If you decide to have a pet-friendly property, you will want to check your insurance policy to find out what type of coverage you have. Make sure you know the amount of liability coverage your policy includes. Your insurance company may have limitations or exclusions to this coverage – such as a list of dog breeds they consider to be “dangerous breeds,” which will not be covered under the policy.
4. Charge Pet Rent
Pets can (and arguably, should) be considered occupants of a home. A nominal monthly fee can be charged as “pet rent”. This reflects the higher demand of pet-friendly rental properties without penalizing someone who doesn’t have a pet. In this way, you cater to both types of tenants without having to exclude pet owners altogether.
5. Charge a Pet Deposit
This one-time charge differs from pet rent in the same way that a security deposit is not monthly rent. This charge goes directly to covering the cost of inevitable cleaning and flea treatment of the property. Extra care (with extra associated costs) must go into deeply cleaning a pet-friendly residence at move-out, which responsible and reasonable pet owners will understand. While a pet-owner may be nose-blind to their animals, a sensitive nose or someone with allergies can detect even the faintest presence of odor or dander.
6. Establish a Pet Application
A pet application, like any other tenant application, can be used to screen & assess the liability of an individual pet according to age, breed and size and will guide the determination of pet rent costs. There are third-party companies that can provide this assessment (for their own separate application fee) which keeps the pet assessment a step removed from any internal bias.
7. Conduct Yearly Inspections
As property owner and manager, you must conduct annual inspections. With tenants who have pets, it is especially important that you be on the lookout for signs of undue wear and tear on your property as a result of the tenant’s neglect on their pet’s behalf. Destructive behavior can quickly devalue a home and increase the cost of repair exponentially. If you have a residence that is NOT pet-friendly, be aware of signs that your tenants have been keeping a pet a secret, or have acquired a pet without thinking to add them to the lease. For liability’s sake, you need to have paperwork that properly reflects all occupants of the home at all times. Your inspection is a great time to address any concerns regarding the care of your property and the suspected presence of any unauthorized animals.
8. Understand the Difference Between a Pet and a Service Animal
Not every animal is a pet. Fair Housing covers the use of certified companion and service animals and it’s important that you understand the difference. A no-pet policy does not apply to service animals, as they are considered to be tenants and not pets. The pet application must still be conducted to determine the animal’s credentials as being certified as a service animal – and not just claimed as one. An “unofficial” service animal is still considered a pet. A true service animal will have the veterinary paperwork to support any claims made.
Property Managers have a history of dealing with a wide spectrum of pets and pet owners, their neighbors, and the fences in between. The legalities surrounding pets as family members and service animals are shifting, and at Frontline Property Management, Inc. we are determined to keep in step with the times and remain informed.
Contact us today to learn more about how Frontline Property Management can help you manage your property with ease and find your next tenants – four-legged or not!
Let us know if you need help with your rental!