The Rental Business: Talking To Prospective Tenants

Now that you have your tenant qualification criteria established, you are ready to answer calls from prospective tenants. If you have prepared your property as we have talked about on these blogs and if you are priced below market as we discussed, then you are bound to get several calls on your listing.

When and where to receive calls? Use a mobile number on your sign and in your ads. That way, you are more reachable. It’s best to be somewhere you can take notes and talk clearly when you answer a call from a prospective tenant. Given that the sign in the yard and the MLS listing are the two main marketing tools for your rental property, you calls are mostly going to originate from right in front of the house or from someone who is in front of a computer looking at your rental listing. Either way you have them attracted to your product – at least for a brief period of time. So, you must try and answer the call. If you are driving or otherwise occupied and cannot take the call, call them back as soon as you can.

Why are they calling you and not your agent? We talked about listing your house for rent with the same agent who represented you at the purchase. So you may choose your agent to be your point of contact. However, it might be economical for you to negotiate a price with your agent where you will be answering calls from prospective tenants and/or showing them the property yourself. To learn this business, it’s best to develop this communication talent. Unless, you have a property management company managing your properties, you might as well start learning how to deal with people. Remember, this business is all about dealing with people. What listing with your agent buys you is the unsurpassed marketing power of the MLS tool. The rest you can do yourself with some education from your agent and your mentor.

So what does the caller want to know and what do you want to know? Let’s think about what they already know. If they are calling from the sign in the yard, or one of the directional signs we posted in intersections, we expect them to have seen the house already. So they know its location, if it’s a two story or one story, how nice it looks in the front and may be the back. If the blinds are open, they may have even looked at the rooms. They may know the neighborhood, the local amenities and even the schools. Now, what don’t they know? The rent. So get to that quickly. So here’s how the call might go:

Prospective Tenant Tom: Hello. I am calling about the house for rent on “123 ABC Street” (mostly they’ll stop right there. Sometimes, they’ll add, “Can you tell me what the rent is?” That’s the one piece of information they do not have – if they are calling from the sign.)

Prospective Landlord You: Hello. This is “You”. Thanks for calling. May I know your name please?

Tom: Tom

You: Hello Tom (catch the name and repeat it). So you are calling about 123 ABC Street. Great. It’s new on the market (more often than not this will be the case). May I ask you where you saw the property?

Tom: Actually, I am standing right in front of it. My friend lives here and he told me about it. So, I came to check it out. It looks real nice.

You: Oh Thanks. 123 ABC Street is real nice. It is a 4 bedroom, 2 bath home, all in one storey. (You are reinforcing what Tom said. He probably can see that it is one storey and likes it. So you restate that as a positive. By using the street name and number instead of calling it my house or my rental, you stay from personalizing it or making it sound less than a home. You also give the impression of being an experienced landlord.)

You: (continue talking about the property) Tom, if you can see inside you’ll notice that it’s all updated with new carpet, paint, fixtures, fans, appliances – everything. It’s practically a new house. (Don’t ask Tom if he peeked inside. He may not admit to it, even if he did. You want them to peek inside before you go out there to show them. So simply state it as a matter of fact: “…if you can see inside, you’ll notice…”)

You: Also, Tom, I’m not sure if you noticed; there are a couple of rentals in that neighborhood but 123 ABC Street is new on the market (implying others have been sitting around for a while) and I am also offering a discounted rent for that market. The rent for ABC is $1,350. Is that something that works for you Tom?

If Tom’s serious about renting in that area and has done his research then he’ll be thrilled with your property and your price. Don’t be disappointed if they tell you it’s out of their range and do not try to bid them up. You don’t want to put someone in your house who will struggle to pay their rent. If it’s not in their range, thank them for calling and let them go.

Tom: That is a good price. I would like to see the inside. Can you show it to me?

You: (Now, remember your criteria. Tom’s okay with the rent. You need to make sure he’s likely to pay.) I’ll be glad to show it to you Tom and yes, it’s a great price. I like to discount my rents so that they are great deals and they rent fast. If you don’t mind Tom, I’d like to ask you a couple of quick questions (continue with the questions).

You: We require our tenants to have at least 3 times rent as their gross monthly income. (You are not asking his income. You are merely stating your requirement.) So, for this property that would be a little more than $4,000 a month. Is that fine Tom?

Tom: Yup. That’s not a problem.

You: Wonderful. That’s great. We require our tenants to have good credit as well. Do you know what your credit is Tom? (This question is not worded accurately on purpose. You don’t want to ask them their credit score per se and at the same time you can’t use a ‘how’ without getting into good or bad. You don’t want that either.)

Tom: You mean my score? Well, I haven’t checked that in a while, but I don’t see why there would be a problem. I shouldn’t have any late pays or anything like that.

You: That’s great Tom. I can show it to you now, in about 10 minutes. Will that work? (Or schedule a time that works. Tom seems to qualify, so be flexible on your side and show him the house as soon as possible).

Tom: Yup. I’ll hang around and get a cup of coffee or something.

You: Wonderful (you may want to tell Tom where the nearest Starbucks is). I’ll bring the application forms as well. So it’s all ready to go. See you at the house. (Leave blank application forms at the rental property. Save Tom’s number on your cell (as Tom for ABC). You can add details later.)

Now, what if the person’s calling from the listing ad? They are probably at home in front of their computer. You can derive the script for this scenario from the one above. Just note these two significant differences: One, they already know the rent and two; they may not have seen the house or visited the area. What you have to do – if you don’t want to waste your time – is in addition to checking their income and credit; you must get them to go see your house. You don’t want to drive there and then be told that they are not coming as it is too far, or that area is not right for them. Ask for their email and send them your application instructions, application form and state your application fee. Include additional pictures, a Google map link to your property and encourage them to drive around and check the property out. Ask them to let you know if that location will work for them and what time is best for a showing. Most serious and responsible shoppers will short list online but later drive the neighborhoods and see the houses before calling the landlords.

Out-of-state calls: Due to the tremendous exposure listing in MLS gives you, don’t be surprised if you get people from out-of-state calling you. They may be relocating to the area and are interested in your house (again, as it stands clearly above the rest). You can get all the details just as in the previous two cases but they may sign up without ever seeing the house. You may want to point them to websites where they can get a lot of information about the city, local businesses, schools etc.