There are currently 44.1 million renter households in the United States. You may assume that with such a larger population of renters, you have your pick of tenants, which is great for your income.
However, there is an issue regarding tenants that no landlord can avoid — finding and attracting them to your investment property. There are two ways to approach this: you do it yourself or use tenant placement services.
Effective tenant screening can be difficult to do on your own. It’s an involved and time-consuming process where you’re finding out whether a renter is right for your property.
That’s why we’ve got a list of reasons why you should strongly consider tenant management services. Below are 19 reasons landlords should opt for using these rental property services.
What Are Tenant Placement Services?
Tenant placement services are part of property management and when you find renters for your rental property. Property management is when someone oversees a rental for someone else.
Of course, you aren’t obligated to have someone oversee your rental, but it could make landlording easier for you. Landlords often use tenant placement services because they’re swamped with other tasks or lack experience.
One of the most important aspects of tenant placement is determining whether a renter is right for your property. Finding qualified tenets is vital to ensuring:
- Your income
- The well-being of your property
- The renters’ neighbors
As risky and discriminatory as this may sound, there is good reason to hire experts and such discernment regarding tenants. We’ll get into why this matters later.
The tenant placement process arguably begins when you prepare your property for rental. Given how involved the process is, there are plenty more facets to locating good tenants.
Here’s a quick rundown of what you can expect when placing tenants:
- Marketing research
- Marketing the rental
- Taking pictures and advertising the property
- Tenant screening
- Move-in inspections
This isn’t the full list of what you can expect to do when finding renters, but it’s required if you want to eliminate vacancies.
19 Reasons to Use Tenant Placement Services
We’ve listed general reasons to use tenant placement services: You’re either too busy or don’t know much about being a landlord. That said, you may want specifics to convince you why these services are worth your money.
1. They Reduce Vacancies
The entire point of tenant placement services is to reduce vacancies. Looking at it another way, you could say rental property services’ job is to help you make money.
The more vacancies you have, the less revenue you earn. On top of that, you’re paying to maintain unused space. Hiring professionals can solve both issues.
2. They Do Background Checks
Background checks confirm that your rental applicant is who they say they are and tell you whether they’re responsible. They can take between minutes and days.
The length of time depends on information sources — employers can take days to respond or you may have difficulty accessing public records.
Instead of you waiting on this process, the property management company can handle it. You’re free to do other things like maintenance or accounting.
3. They Can Handle Multiple Properties
Having multiple properties increases revenue, but it’s hard to handle issues if there’s only one of you. Tenant placement services can handle all related duties across your many rentals.
4. They’ll Have Experience and Skill
There’s no legal requirement for someone to go to school for landlording. However, lacking experience or specific skills does put you at a disadvantage.
One of the greatest property management tips we can offer is if you don’t know, you should ask someone who does. For example, you can’t refuse to rent to someone solely because they have a criminal record.
You can deny applications based upon the charge; provided the denial applies to all renters committing the same crime. You can face lawsuits if you unlawfully deny someone the chance to rent from you.
Tenant placement companies will know this. Your chosen company can navigate complex laws so you can run your business with little trouble.
5. They Deal with Tenant Relations
Generally, concerns with tenant relations are reserved for after renters move in. Tenant placement still requires good communication with would-be renters during the application and move-in process.
Working with people is all part of the tenant placement process. They’ll have the skills and experience to deal with renters, good or bad.
6. They’ll Find Tenants’ Financial and Rental History
Do you remember how we mentioned why experience and discernment among potential tenants matter? You want to ensure you’re finding responsible, capable tenants via legal means.
We’ve covered why experience matters, but financial history matters because it tells you if your renter can pay. This is why background checks include credit checks, meaning they’re less liable to default on payments.
Rental history may speak toward a tenant’s financial stability. However, it can tell you how long they rent and if they’re good tenants — all things you’d want to know when trying to reduce vacancies.
7. They’ll Verify Tenant Employment
Effective tenant screening will search for a tenant’s employment history. Like credit checks and rental history, employment verification will tell you about a renter’s income and if they can stay reliably employed.
8. They’ll Negotiate and Collect Security Deposits
Some tenant placement services may negotiate and collect security deposits. A security deposit is paid to cover would-be losses or property damage.
The amount varies across states and can be more than a month’s rent. The company may account for the type of property and the tenant’s background (like their credit score).
9. They Can Arrange Leasing Solutions
One of the most useful property management tips is to let more experienced people arrange things. Tenant placement doesn’t collect rent, but they can set up a reliable payment system for you and your tenants.
10. They Cover Marketing Research
Before you advertise your property, you must know what it’s worth. Landlords need a rental value assessment or rental valuation. These valuations tell you what income to expect from your rental.
Here are some factors that determine a rental’s value include:
- Net operating income (NOI)
- This is your expected revenue minus related expenses
- High NOI means the property is doing well
- You can expect a high return on investment
- Capitalization rate
- This is your expected rate of return (ROR)
- Measures profit or loss in an investment over time
- Calculated by dividing NOI by the current market value
- Occupancy rate
- Metric affecting rental income and return on investment (ROI)
- Vacancy rate
- Knowing this helps plan contingency cash flows
- Necessary to pay for recurring expenses
- Price-to-rent ratio
- This is the balance between rental rates and rental demand
- Average rental operating costs
- Finding cities where costs are less than revenue for comparison
- The comparison helps to ensure you’ll have a positive cash flow.
Other factors include the property’s age, condition, and location. Landlords must also account for neighborhood ratings — how many amenities the community has.
You can’t charge a sensible rent without this data. However, collecting all this information can be time-consuming, which is why it might be best to leave it to professional rental property services.
11. They’ll Handle Lease Agreement Preparation
You can print lease agreements online. Regardless, you may want a professional to check over the agreement for safety’s sake.
A property management company can check that everything is legal per city, county, and state laws. Adding addendums with professional aid is easier because they can ensure you’re not breaking the law.
12. They’ll Market the Rental
Marketing isn’t as easy as posting: “I have a new property, come look!” on Facebook. You must know how to write listings that target your specific audience.
For example, people with young families may want parks, schools, nearby schools, and jobs. All of this needs to be in your description. It’s a given that the property needs a favorable description.
People tend to want photos of the rental, but low-resolution pictures aren’t good enough. You need high-quality images; statistics have shown people tend to look at listing photos more than text.
It’s best to have a professional photographer take the pictures. The property management team may have someone on retainer who can bring out the best in your rental.
13. They Handle Move-In Property Inspections
You don’t want renters coming to your property just to be unimpressed by a leaky pipe. A move-in inspection is when the tenant and landlord (or property manager) survey the property before the former moves in.
Move-in inspections are common within the rental industry and protect the landlord’s investment and renter’s security deposit. Both parties walk through the home and examine the:
- Exterior
- Interior
- Plumbing
- Appliances
- Electrical systems
Online checklists can tell landlords what should be inspected. However, tenant placement services will have experts who can spot anything wrong.
14. They’ll Save You Time
This point is simple but significant. Landlording is difficult work and tenant placement is only one facet. Having someone else handle it can save time for other tasks or relaxation.
15. They Take Care of Property Showings
Property showings are private appointments for potential renters to check out a home. However, there are various rules a landlord must abide by.
They must inform current tenants of their intent to enter the property. Landlords can also only enter the rental property during business hours.
They need to schedule a time with the current tenants so they have time to prepare the space. A property manager can easily manage all these requirements.
16. They Do Pet Screenings
It’s reported that 72% of renters have pets. Many landlords allow these would-be tenants to move in with their furry companions to increase revenue.
However, you still want to ensure your investment property is safe with animals around. Pet screenings can help; they can help landlords determine a pet’s:
- Health
- Personality
- Behavior
They check if the pet responds to commands from others and whether they’ll be aggressive toward other pets and tenants. Tenant placement services can perform these screenings quickly and professionally.
17. They Perform Maintenance
We said that the tenant placement services begin when preparing your property for rental. Maintenance is vital to getting your rental ready for tenants but involves more than sweeping the floors.
Tenant placement services typically don’t handle maintenance — unless it’s for new renters. This is “make-ready maintenance” and ensures the rental is prepared to move into.
Here is a quick rundown of what the tenant placement company will do:
- Check whether the electrical and appliances work
- Paint the walls
- Vacuum carpets
- Ensure everything is clean
One of the greatest property management benefits is that the placement company can handle this with minimal input from you. A professional company can ensure your move-in inspection goes smoothly.
18. They Take Care of Move-In Coordination
Move-in coordination is moving the tenant to their new home on time with no issues. The placement company may help move their belongings and hand off the keys to the tenant.
19. They Make Tenant Placement Less Stressful
As you may have gathered from this exhaustive list, tenant placement requires plenty of work. Landlording won’t be completely hands-off — even with aid. A tenant placement company can reduce stress.
They help streamline the landlording process, so you have less to do. With them handling all the hard work, you can rest a little easier and focus on other things.
Property Management Tips for Getting Good Tenants
Technically, this article is one long tip for getting good tenants. Our advice can be summed up in four words: hire tenant placement services.
They’ll have the experience, skill, and time to handle all the facets of finding renters. They can work across multiple properties, handle background checks, and reduce vacancies.
If you want rental placement services that can help you: hire Reedy & Company. We’re more than a tenant placement company, we’re a property management company with over 40 years of industry experience.
Our staff of 100 manages over 3,000 properties owned by Memphis, TN locals, domestic, and foreign investors. Our local knowledge will help you make better investment decisions.
Contact us to get started on improving your tenant placement process. Together, we can make your rental stand out among the rest.
