One of the scariest parts of flipping a rental property is wondering whether or not you’ll find a good renter. Thankfully, I got great advice on this topic while attending the Think Realty event in San Diego in February. At the time Lucas and I were halfway through our renovation. We had two coats of paint on the cabinet bases, but no countertops, no backsplash, no updates to the bathroom, no finished paint. I was worried about showing the home to a potential renter before it was truly ready to go, so I hadn’t put it on the market yet.
BUT, it had occurred to me that because it was already February 18th, the people looking for rental properties were probably not ones looking to rent in early March, which is when we would ideally have wanted a renter to move in. That meant we’d cornered ourselves into having to pay March rent, and if we waited until the renovation was totally done, we might have to pay April’s, too.
Then I met Adam Metzker in San Diego at the Think Realty event. He’s got a real estate business called Realty Concepts, through which he buys and flips rental homes. He and I just happened to walk into the main session room to hear Bruce Norris speak at the same time, and we struck up a conversation. Here’s the invaluable advice he gave me:
1.) Don’t be afraid to show your property when it’s still in the middle of a rehab.
He told me he has no problem showing his properties when they’re still under construction. He simply tells the potential renters what his plans are as they walk through the property. “I’m putting this paint color here; we’ll have granite counter tops here; we’re doing all new lighting fixtures in the kitchen, etc.” He assured me that his renters have always been excited to get into a freshly renovated home, and the mid-construction state of the property rarely deters them.
2.) Don’t be afraid of pets (at least not completely)
There is, of course, a bit of caution that comes with allowing pets in your rental, but Adam gave me good advice. He said generally people who are looking for a house, especially one with a yard, have a pet. His approach to rentals has always been that he wants to make homes for people, where they feel comfortable and can live their lives, and pets are often a part of that. He encouraged we take a non-refundable pet fee, but not to turn a renter away simply because of their fur baby.
3.) Do ask questions
He absolutely advised us to do a thorough rental application—including a background check, verifying references, and collecting two month’s bank statements or paystubs to verify income. On top of all that info he told me: “Ask lots of questions when you’re showing the property to a potential renter. It’s your opportunity to pre-screen them.” He suggested finding out why they’re moving, when they’re thinking of moving, if they have pets, if they have kids, how many people would be living with them, where they lived before, what their jobs are. All pretty basic small talk questions, but important pieces of the renter equation.
So, we did all three. I threw the rental up on Zillow as soon as I got home from San Diego. This is a free listing service, and Zillow pushed our property out to Trulia and HotPads automatically. The listing included two pictures: One of the before photo of the outside, and a mid-renovation photo of the kitchen. I wrote a little description of the area and the updates we were making on the house, and I noted that we were open to pets (and had a fenced-in back yard). Within a day, we had 12 interested parties. A few were smart enough to fill out the renter profile on Trulia, so when I got their email of interest, it also included information on their credit score, occupation, income, and move-in date. That made deciding who to show the property to first really easy.
When the potential renters came to see the property, it was basically in shambles, but I showed them the paint colors, showed them the countertop sample, talked through the updates we were making, and asked them LOTS of questions.
And you know what? I liked them a lot, and they wrote me a check to cover their rental application fee on the spot, which leads me to my advice for you:
When a potential renter writes you a check, don’t put the check in your jacket pocket and then take it home and wash it.
You’ll be mighty upset when you turn a check for real money into a wet wad of shredded paper. And that’s all I have to say about that!