Tenant selection is probably the most important component of property management. After 20 years of placing tenants, we have created a proven advertising machine combined with a mathmatical model for predicting tenant behaviour. Unlike most of our competitors, we rarely deny tenants. If a tenant scores terrible in our system, their security deposit becomes so astronomical, they decide not to choose our property.
Our system is proprietary and constantly improving but we can share some secrets…
We use signage, bounties, the MLS and craigslist to attract tenants. Bounty hunters (aka agents) are constantly pushing prospects our way because we are quick to answer and quick to pay. The MLS pushes data & pictures out to Trulia, Realtor.com and a dozen other websites so we don’t have to play with that. Craigslist of course is a must and we post about 10 ads a day. We insist on lots of photos of a property along with video to further increase our traffic of potential tenants.
More tenant applications = more choice of tenants = better tenants = more money for our investors. Our free online application enables our dedicated tenant processor to quickly size up a potential tenant. The mathmatical formula creates a security deposit amount based on their rental history, income history and sometimes credit history. This model also factors in the type of property they are moving into. Multi Family properties have a different parameter than single family properties.
This component of a tenant profile carries the most weight in our model. Tenants who have a history of paying on time for multiple years in Las Vegas is a rock star. Years of experience have taught us to investigate this thoroughly by matching up pay stubs with IDs and landlord responses. There are some very clever tenants who try to dodge this issue and we are relentless to find the truth.
Tenants who have a history of working at the same place for more than a year weighs heavily in our algorithim. We are looking for people with jobs and are not relying on government assistance to survive. Tenants who go to work respect their property and ours because they earned it. They are also at work. They are not drinking 40s on a Tuesday morning tearing up the propery and inviting all their other friends who don’t work.
The only time this becomes a factor is when their rental history or income history is weak because they are moving to Las Vegas. If someone tells us their credit is crap, we believe them and there is no reason to pay for evidence. If they say their credit is good, they pull their own report so we can punch that number into our system. Most tenants in Las Vegas have crap credit. If it were good, they would own a home.
There are other parameters that we use to calculate the odds of a tenant staying for more than a year. Unfortunately, we cannot share these over the net. Since 1996, our broker has been selecting tenants and developed systems for consistent predictions of tenant behaviour. That system isn’t perfect but it’s better than most of our competitors.