You will have advertised your rental property, and you will be starting to take enquiries for it.

How do you screen those enquiries and sort out the wheat from the chaff?

(1)  Always put the Family First!

I always put great store in existing tenants referring a family member to us for an empty property, or a mother or father referring their son or daughter for an empty property.

It would be good to only have these kinds of tenant, however, there are many times when you have an empty property and you want it filled ASAP.

(2)  Shut up and Listen!

Firstly listen to them on the phone, and listen to background noises. If there is a lot of noise in the background it means they are not thinking about trying to create a good first impression and this sets a wee alarm bell ringing.

(3)  Gut Instinct and First Impressions

When you meet your potential new tenant their appearance and clothing and mannerisms can tell you so much and help you decide if you want them as a tenant.

Punctuality is also another factor to lodge into your overall mental impression of the tenant along with other areas already mentioned.

What you have to realise is the fact that a lot of your decisions to take a person on as a tenant come from first impressions and your gut feeling.

These two factors are very important to take into consideration when assessing a potential tenant.

(4)  Previous Landlords and Previous Addresses

Previous landlords are important, although you have to decide if what they are saying to you is truthful or just a plain convenience story to help out their friend who happens to be the applicant for the tenancy!

If their previous address is not too far away, you could pop by and just get a feel for the condition of the property.

(5)  Use the Credit Check for more than just a Credit Check!

A credit check is always, always a good idea.  They are not too expensive to carry out and you should insist on payment upfront for the reference fee,

This type of check should include a name check, an address check and an employment check.

On payment of the reference fee, you can tell them that the property in question will be “on hold” until the tenant credit / reference check results come back to you.

Payment of the reference fee shows commitment on behalf of the tenant and confidence in their ability to be able to produce a clean set of results for the credit / reference check.

(6) Is their car a Rust Bucket or a Showroom Model?

If possible try and see the type of car they have arrived in, and make a mental note as to the condition of the car.

(7)  Thinking time to change your mind

If potential tenants view a property and immediately say they want to rent it, it is never a bad thing to give them at least 24 hours to think it over.  It is amazing how often a “Yes I want it” can so quickly turn to “I’ve changed my mind”.

(8)  Is the Rent Affordable?

If the potential tenant is working they will be in a good position to pay the rent required.

If the tenant is not working, and in receipt of benefit payments of some kind, you have to make sure that these payments will come to you, and that they will be enough.

Should the benefit payments not be enough to cover the entire rental payment, ask them how they plan on making up the shortfall each month?

Vague answers mean they don’t know, or they haven’t thought about!

(9)  The Deposit

This is an important part of deciding if the tenant is suitable or not.

If the deposit is readily available, the potential tenant scores a maximum 10 / 10! This is a good indication that the tenant will be acceptable.

Having the deposit, gives you, the landlord many reasons to feel comfortable.

If the deposit is not available, and the tenant asks to pay it up over a number of weeks or months, will leave you in a vulnerable position.

What happens if the property is damaged and there is no deposit and the tenant absconds?   …   Who pays for the damage?

If you need the property rented and you only have this type of applicant, make sure you have at least one and possibly two, guarantors in place.

(10)  The Role of Guarantors

Guarantors can be former employers or family.  They will be responsible for the non payment of the rent.

This helps to keep the tenant from being late with their rental payments and having the embarrassment of knowing that we will contact the guarantors who will then contact them, and tell the tenant to pay up!

Brieff summary

Having gone through the above list and obtained the information mentioned, you have the ammunition to help you come to an important decision, which is backed up by a variety of “cross checks”.

You will not always be right with your choice, but you will certainly have every reason to believe that you are right!

Prolong the life of your tenant  ..  It is not rocket science here, it’s pure common sense  ..  Trades people are your “gold dust” ..  When people talk .. others listen and believe!!  ..  Freshen up all the time  ..  Internet technology and nettles  ..  Create a website that is an offshoot of your main property rental website  ..  By now your grey cells must be working overtime!  ..  Free Home Delivery is a great add on!  ..  Now take another step!  ..  Arms & Legs!  ..  No need to think twice  ..  Why stay in contact?  ..  Stability and cheques!

Prolong the life of your tenant

Running a property rental business has many issues to address, but the number 1 issue you have to address is to fill your property, and whenever possible, prolong the life of your rental property tenant!

If your tenant is going to leave,  for whatever reason,  you are then faced with the task of filling your rental property again!

If you have taken on board the ideas in the article “Advertising ideas!” … you really should not have too much bother filling your property …. But why not totally avoid this situation happening? .. or at the very least, reduce the number of time a rental property tenant says they want to leave!

It is not rocket science here, it’s pure common sense.

Your tenants need to be treated like real human beings; they need to be contacted on a regular basis.

Any, and I mean any problems they report, about the property should really be dealt with immediately.

I cannot recommend strongly enough that to keep your business ahead of your competition, you need to have tradesmen on hand who can respond to water, gas, electric or other problems “at the drop of a hat”.

Trades people are your “gold dust”

Because you are running a rental property business, it means that you are always going to need trades people, and they know it.

They want to give you a service you can rely on….. if they don’t,  it is quite simple for you to say “goodbye” and move onto another tradesperson who is keener to make an impression,  and keener to establish a long term relationship with a firm they know will give them work on a regular basis.

When people talk .. others listen and believe!!

The knock on effect of having quick, reliable and competent trades people on hand, feeds down the line for you.  You don’t know when it will happen … but people will talk about your business

“ I called late yesterday and they were out after only 1 hour .. I was relieved to not to have to wait! “

“The water leak was sorted so quickly by my landlords’ plumber! ”

“I had a problem with my washing machine and the landlord had someone  out within 4 hours,  and they mended it there and then .. that was great!”

These are the sort of comments you want to hear from your tenants time after time after time!

Your tenant feels  important and comfortable with you, and as a consequence less inclined to look about for other places to stay if they know they are being looked after.

Freshen up all the time

Wherever possible, try to keep your property “fresh”   .. well maintained and well decorated.

There are two  reasons for doing this ..

(1)    You are maintaining value.

Whenever you come to sell your rental property, you do not want to be faced with huge costs to “get the property ready” … it’s far easier to do little tasks regularly to keep improving and upgrading your property.

(2)    Your tenant will like that!

If your tenant is living in a property that is being looked after .. they will feel looked after.  This really does add to their” comfort zone” and is another reason for your tenant to stay your tenant.

Internet technology and nettles

Grasp a nettle and you feel pain,.. but, touch a nettle carefully…. and you will avoid pain,  allowing  you to move on to bigger and better things…

Think about this for a minute.. You have a website advertising your properties… you have touched the nettle of internet technology and you can now use it without pain …  so why not take it a stage further and harness more possibilities from the internet…. and use the internet to help you grow?

Create a website that is an offshoot of your main property rental website ….

Tell your tenant that because they are your tenant, they will gain special access to your special and exclusive Online Shopping Website.

By now your grey cells must be working overtime!

Take this as far as you want.

In setting up your online shopping website, you will have affiliated with a number of big name stores …. They want the business and they will pay you a commission for you sending customers to them.

Your tenant gets access to exclusive deals and vast choices, all from the comfort of their chair in their warm house.

Free Home Delivery is a great add on!

Free Home Delivery cuts out the hassle of having to find parking and practise Olympic weightlifting as they  carry shopping bags for what seems like miles and miles!

The convenience of tapping a few computer keys makes this a great “add on” for your tenants.

Now take another step!

You can even expand your website idea further and offer your preferred trades people a spot on your website under “property maintenance”  …. Any enquiries you receive can then be passed on to your trades people …they will appreciate this advertising on their behalf!

Arms & Legs!

Now you will find this website idea developing arms and legs….  as you realise you can offer your tenants online booking for Holidays, Plane journeys, Train journeys, Car rentals……. this list can just grow and grow!

So many companies are happy to “affiliate” with you, and you can offer your tenants a service which they would lose if they left your rental property.

No need to think twice

All the above points in this article will help to create a more than convincing case for a tenant to think twice before deciding to move.

Why stay in contact?

Keeping in contact with your tenant definitely helps to prolong their tenancy.

This simple task has so many beneficial effects that will let you build a rental portfolio that consistently has tenants in situ for long periods of time.

Stability and cheques!

This stability cascades down into your pocket.

You will receive regular and consistent property rental cheques, and if your online shopping takes off. who knows where that will go!

Stable and happy tenants let you achieve a peace of mind that many property rental businesses do not have.

Before you look at particular rental “hotspots”  throughout the world,  there are a number of parameters you have to factor into your thinking before making a rental property investment decision.

How to be attractive

For a town or a city to be attractive for people to live in you have to consider not only how stable employment is, in and around the area,  but also, what career prospects look like for the future,  in relation to the industries in and close to areas of interest.

Career prospects are always linked to what the growth prospects of the industries in these areas look like.

Before the Credit Crunch

Before the credit crunch really hit home, tourism, energy, manufacturing and finance were the driving forces behind many economies.

A year later we find these industries have declined as quickly as snow melting on a sunny day, and now we are finding government programmes with complicated financial structures that are propping up many sectors of many economies.

These measures are holding fragile economies together,  but,  they are not permanent and we have to consider how long governments will be able to sustain these massive financial intervention methods.

How to be in Pole Position

Currently, cities with robust job prospects and stable employment are proving to be most attractive for the real estate rental sector.

It is interesting to observe that the degree of severity during a downturn like this has less impact on employment areas where people have to create new ideas, in other words, where people are paid to think.

Taking this a stage further, consider the professions where people work in the likes of science, engineering, architecture and education.

These types of careers are providing the better job opportunities, and the areas to factor in when looking at where you want to build a rental portfolio.

Now let’s look at America, and the American rental sector

In America there are cities of different sizes which include outlying areas all of which contribute to the overall stability of the “economic bubble” within these city and suburban areas.

Top 10 rental cities in America

Research has shown that at present ( July 2009 ) areas now at the vanguard of the American economic recovery include:

• Huntsville, Alabama  (population about 545,770 as of 2008 census ).
• Albuquerque, New Mexico   (population about 521,999 as of July 2008 census
• Washington, D.C. ( population about  6,549,224 as of 2008 census )
• Charlottesville, Virginia. ( population about  41,228 as of 2008 census )
• Athens, Georgia. ( population about 173,442 as of 2008 census )
• Olympia, Washington . ( population about 45,322 as of 2008 census )
• Madison, Wisconsin ( population about  231,916 as of 2008 census )
• Austin, Tex.  population about  757,688 as of 2009 census )
• Flagstaff, Ariz. population about  127,450 as of 2007 census )
• Raleigh, North Carolina ( population about  392,552 as of 2008 census )

So if you are looking where to buy rental properties in America and you want to know that long term employment prospects will keep your tenants in your rental properties for a long time with stable job prospects, the above areas are certainly worth considering.

Australian rental sector

Sydney and Canberra are well placed in the areas of employment and public sector involvement, making them areas where there is a strong demand for rental properties.

It appears that people are unable, or unwilling to commit to house purchase in these areas due to the very high property prices

Rental Demand continues

Due to the high property prices in Sydney and Canberra, you will find, of the people wishing to live in these attractive areas;  a large proportion are looking at rental properties as being the best way to establish themselves in these areas.

Obviously when demand is strong, rental prices are also strong and more importantly, liable to remain stable.

This scenario is a great “decider” for people who wish to invest in real estate for rental purposes,  and does not only apply to Australia!

The United Kingdom Rental Sector

Before the credit crisis hit the United Kingdom,  lending policies were so slack that everybody and their auntie was taking out a mortgage!

Now these lenders are weeping and wailing ……wishing they had been more prudent in their lending!

It’s too late to look back.

Currently,  many foreign investors are seeing certain areas throughout the United Kingdom as being prime targets for investment properties.

The excesses of the property boom in the UK, when many thousands of people were given mortgages they couldn’t really afford,  has resulted in the country being seen by bargain hunters as a preferred target as re-possessions rise.

Below I have indicated some of the larger populated parts of the UK … please take note here that some of these areas have been severely effected by job losses and therefore unemployment is on the rise ( almost touching 2.5 million for the whole of the UK, as of 12th August 2009 ).

Rental Opportunities

Property investors are aware of the potential value in buying repossessed property,  and see some parts of the UK as ideal “opportunity areas” for purchasing rental property.

The population figures indicate the potential for demand for housing accommodation.

Due to the chronic shortage of good housing stock, rental properties will continue to be in demand.

Help with the rent!

Obviously, employment is an important issue in all these areas,  but Government help in the form of Local Housing Allowances  has resulted in people who are no longer in work,  or in lesser paid jobs, to still to be able to afford their monthly rental payments.

Ability to meet rental payments is an important part of your decidion making process,  no matter what part of the world you are investing in,  when deciding on the location(s) of your real estate purchase.

Areas Investors are looking at…  for bargain properties!

I have noted below areas that are being targeted by investors looking for a bargain

• The Greater Metropolitan area of London ( population 13,000.000 from census in 2007)
• Birmingham ( population  1,006,500 from census in 2006 )
• Liverpool( population  435,500 from census in 2007 )
• Leeds: ( population 761,100 from census in  2007 )
• Newcastle: ( population  189,863 from census in 2001 )
• Bristol: (  population  416,400  from census in 2007)
• Cardif( population 321,000 from census in 2006 )
• Edinburgh ( population  471,650 from census in 2007 )
• Perth( population   43,450 from census in 2001 )
• Stirling( population  41,243  from census in 2001 )
• Glasgow( population   580,690 from census in 2005 )
• Aberdeen( population  202,37 from census in  2007 )

Above is a selection of cities/ areas,  all with potentially strong housing demands and,  as a consequence, potentially strong rental demand.

Many of these areas are well positioned to capitalise on the recovery ( when it happens).

This will mean that employment and career prospects in these areas will certainly look promising, as the entire country begins to experience the “green shoots of recovery” .

This article has only touched on a few areas throughout the world that show potential for Real Estate Rental Property investors who wish to start to build a rental portfolio, or wish to expand their current Rental Portfolio.

Further articles will be released in the coming months on this topic, and I will  “travel round the world” providing helpful information to all my readers.

It would certainly be of great benefit to my readers, if anyone reading this knows of good property rental demand in their local area.  This can be anywhere in the world.

So, if you want to contribute with your knowledge and or experience,  why not pop an email to Rentals@buildarentalportfolio.com and tell us a little about the rental demand in your area.

I will say thanks now for your support!

The next article is about how to Investment in Rental Property with little or no deposit!.. and it also explains how people from anywhere in the world,  with access to a computer can turn themselves into successful real estate rental entrepreneurs!