How to Find Good Tenants for Your Rental Property

 

Tasha Newton is a Navy veteran and JWB’s Leasing Supervisor, who is in charge of placing tenants into JWB’s Turnkey Rental Properties. She shares the processes of how to find good tenants for the JWB properties we manage. When you learn what Tasha Newton shares in this interview, you will see that our tenant qualification process helps the average ROI on real estate increase for our turnkey rental property investors.

When you invest in an investment property, you want to place good tenants into that property. Real estate investors want to know they will have a good rate of return and positive cash flow. At JWB, we pre-qualify potential tenants to make sure that we find a good fit for your property and that you will see an above-average ROI on real estate over the long term.

How Do We Qualify Tenants for Your Jacksonville Investment Property?

When potential tenants contact JWB about our rental property vacancies, we ask a series of pre-qualification questions, which include the following:

  • What are you looking for in a home?
  • What are your needs as a tenant?
  • How soon do you need to move in?
  • How long do you plan to live in the home? (If they are looking for long-term, we offer 3-year lease agreements, which are ideal for tenants looking for a home.)
  • How many adults will and how many children be living in the home?
  • Are you bringing any pets? (We will look at the insurance to make sure their type of pet is covered.)

After they answer the pre-qualifying questions, we ask questions about their willingness to commit to a deposit. Assuming they agree to put money down to secure the lease, the next step includes doing a credit check and a background check. We aren’t looking at credit scores, per se, but we look for proof of income, any evictions or felonies, and any bad records involving children or sexual assault.

We want to know if they are a good fit for us and are a good fit for them? We do this before we schedule them a showing of available rental properties and sign the lease.

What Will Disqualify a Potential Tenant?

We will have a frank conversation with potential tenants if we see they are not an ideal fit because we want to create a positive experience for them, property owners, and our property management team

  • We disqualify someone if they have an open bill with a landlord or a foreclosure. 
  • If they are not willing to complete the rental application and provide the appropriate paperwork, they are disqualified.
  • We disqualify anyone who cannot pass the standards on a credit check or background check.
  • If they have a pet that is not covered by insurance, they are disqualified.
  • If they are not interested in living in that property long-term, they are not an ideal JWB resident.

How Should I Find Good Tenants and See a Better-than-average ROI on Real Estate?

It is always wise for real estate investors to have thorough tenant screening to find a good fit for their rental property. Your questions when seeking out great tenants should include the following:

Timeline: How soon do they need to move in?

Length of stay: The longer they plan to stay in your rental property, the better your rate of return.

Pets: As the rental property owner, you should decide whether or not you want to allow pets.

Income: Do they have proof of income, such as pay stubs, bank statements, and their credit check meet your criteria?

Background check: It is wise to find out the history of potential tenants through thorough background checks.

Why Does JWB Seek out Long-term Tenant Leases?

Longer leases = lower fees for the tenants and increased ROI for the real estate investors.

The 3-year leases are our target, and many assume they’re difficult to get. Most other property management companies have 1-year leases, but JWB is different. It’s in the best interest of the rental property owners and the tenants to have long-term leases because that improves the average ROI on real estate investing. 

Tasha confirmed that JWB’s leasing team could get the 3-year lease terms easier than you think because these are houses, not apartment complexes. We have a 2-year lease option, but we target 3-years because it makes more money for our rental property investors.

The JAX market is crazy right now, and every time you sign your lease, your rent goes up, so the people who want to keep their rent amount at the same price eagerly sign the 3-year leases. We usually increase the rent by $50 when renewing our leases, so when they lock that lease in, it saves the tenants money. No other property management company besides JWB offers that.

Pablo commented that the rental property managers would squeeze him year after year, especially when the market was going wild in Miami. But, property owners lose money when tenants move out. At JWB, the goal is to keep a resident in the property for as long as possible. 

How to Find Good Tenants Is the Result of Asking Good Questions.

Our Not Your Average Investor show has an active online community, and we had several great questions coming from the audience.

Most real estate investors who work with JWB live outside of Florida and are not intimately familiar with Florida’s real estate market. Our leasing department screens potential residents to find out if they would be good tenants for our investors. After a tenant signs into a 2- or 3-year lease, the JWB property management department takes on that relationship with the residents.

What Is the Eviction Process in Florida?

Tasha said the leasing side is different from the property management side of JWB, so she doesn’t know all the details. However, we do everything possible to work with the tenant and keep the tenant in. Denny, a longtime investor with JWB, chimed in and said he’d had several evictions with JWB. Fortunately, it’s been easy, and yes, FL is a landlord-friendly state. 

What Are the Median Rents for JWB Properties?

We have $1188 as the average amount of rent for most JWB properties.

Are Most Renters Coming from Apartments or Houses?

Many come from apartments, and they want to live in a house. We also get people coming from other houses.

Do Most Residents Plan to Purchase Their Own Homes?

Or, do they plan to be long-term renters? We get a lot of repeat residents on the leasing side. They’re looking to buy down the road, but they talk with JWB about their goals, where their credit score is, etc. They want to stay with JWB because they’ve had a great experience with us.

Do We Only Want 3-year Tenants If a Property Owner Requests It?

Yes, we can do that, but your property could stay on the market for a longer time.

What Is the Average Vacancy Rate?

We currently have a 3% vacancy rate, which is the industry standard.

What Is the Tenant Responsible for the Upkeep of the Home?

The tenants are responsible for paying utilities, bug control, lawn maintenance, and upkeep for the home in general.

Do You Need to Qualify Your Residents Again Every Time the Rent Gets Raised?

We do not requalify at the time of renewal because the rent increase for the same home they are occupying is minimal.

However, if the resident wants to finish a lease and rent from JWB again, moving from one home to the next, yes, they get another round of qualification questions.

Are Tenants Required to Own Renter’s Insurance?

No, but we strongly suggest it. Hurricane insurance is covered, but their personal belongings are not, but the renters’ insurance will cover their assets.

How Has the Leasing Qualification Process Evolved for JWB?

The leasing qualification program had evolved a lot since 2006 when JWB first began. Denny, who has been a client of JWB’s since 2012, chimed in, saying the 2021 leasing process is better than it was when he started.

Tasha said Denny could not be more right! Times have changed. JWB is data-driven, and what we used to look for pre-COVID is different from what we are doing now post-COVID.

Since the pandemic began, we no longer have in-office appointments with potential tenants. Everything has gone digital, and with the capacity to form fraudulent documents, it becomes harder to know who you are renting to, so we’ve changed it. 

For example, we get the ID and SSN, taking a picture of them beside their face to prove it’s them. We also require bank statements to make sure their income is what they say it is. It’s more tedious now, but it’s to make sure it’s not fraudulent or a scam.

We went from face-to-face interviews to qualifying via digital means, exposing a crack in our qualification system. We found out scammers pretend to be owners of our properties and offer the property at a lower rent.

The poor, unsuspecting tenants moved into a vacant home that was not rightly theirs to rent. These are tough conversations when a tenant has moved into an empty house that isn’t verified by the JWB team. It’s sad, but we handle it.

What Are the Best Practices These Days to Make Sure We Have the Right Person?

JWB’s leasing team requires bank statements, pay stubs, and pictures of the applicant next to their photo ID. We have multiple eyes on our team verification the residents are who they say they are. 

For example, our leasing agents are our first set of eyes. Next, we have systems in place with our leasing admins, supporting the leasing agents, who are our second set of eyes. The third pair of eyes are our “investigator ninja,” who finds other issues. The 4th and final set of eyes is the underwriter.

We do what we can to not miss things, like criminal history or income issues. To have these systems in place is terrific, and not many other property managers in the United States have the team to do this level of qualification for each tenant. We have the “investigator ninja,” but having multiple eyes to look for critical details is ideal. 

How Does JWB Maintain Quality Control for the Leasing Department?

The alignment of incentives is another great thing we do at JWB. From leasing agents to the property manager, everyone is working toward the common goal of creating a win-win for our investors and our residents.  

The agents put themselves in the owners’ shoes, and we are doing what we can to find the right residents for these properties. We will tell them we are not a good fit, even if it costs them a commission. 

We are building long-term relationships, and though we are incentivized to fill these properties with tenants, they need to be the right fit. We want to do the right thing, and that’s the JWB culture.

We have a great team, and we explain the “why” in our company. We want to empower our team to be the best they can be, serving others. It’s not “I” driven, but always to look at the big picture. Our team wants to know the big picture and know why we do what we do for the best situation for everyone involved — investors, residents, the community.

Tasha learned excellent team-building skills in the Navy, so she carried those leadership skills to JWB as the head of the leasing division. Is their “why” the same across the board and are the residents understanding why we make the decisions? That’s the goal. 

Approximately, What Percentage of the 3500 Properties Are 3-year vs. 2-year Leases?

The average lease term is 26.43 months, but a little more than two years.

How Is the Waiting List for JWB Properties? Is There High Demand?

Yes! We always have 40 – 80 applications per week with qualified residents. Yes, we always have people coming through the pipeline consistently. JWB has a sophisticated marketing funnel that constantly has people coming through to rent properties. 

What Major Changes Are You Implementing and Improving Your Leases over the next Two Years?

We’ve added software and are always keeping an eye on the horizon. We used PropertyWare, but it wasn’t ideal. Now we use CoreLogic, which is linked to SalesForce. CoreLogic is predictive and will help illustrate if someone is going to be an ideal renter. 

There’s been a vast difference in our background checks and specifies our qualifications to find if they will be the best possible resident. We can choose what we are looking for in this system because they’re used specifically for rental properties. 

If Tenants Want to Move out During a Lease Term, How Is That Handled?

We let them know we specialize in long-term leases, so we tell them we may not be the best fit. If you break your lease, you forfeit your security deposit to the homeowner, and you must pay 2-months rent.

What Lessons in Leadership Can Tasha Share with Us?

Tasha loves the military. It’s taught her so much over the years as a small-town girl from West Virginia. JWB has also helped her grow. The leadership style is very different, but she enjoys both environments.

Tasha has been molded and shaped by the JWB team to manage and fluidly lead people because everyone is different. It’s been a growth opportunity for Tasha because all of the 4-owners of JWB have different styles, and she learns from each person. 

How Does the Leadership Style of the Navy Compare to the Leadership of JWB?

On the military side, it’s similar leadership across the board. JWB has a genuine care for personal and professional development, and it’s been a breath of fresh air to experience the JWB leadership style.

JWB has a 4-person partnership, which allows for a positive work laboratory. Our team doesn’t have to be afraid of making mistakes because we learn from them. Every step is a learning and growing process.

Does JWB Do a Walkthrough Every Six Months to See How the Tenant Takes Care of the Property?

We do a pre-move-in inspection. We also do a walkthrough inspection when it’s time to renew the lease. 

Interestingly enough, we experimented with standard inspections, and JWB discovered these inspections did not drive ROI. Why? Because tenants know they can avoid issues when they have enough warning, they will get rid of the offending evidence when they discover there will be an inspection. 

But we have many JWB team members who are always in the area of our rental properties, and they’re all trained to keep an eye on the properties inconspicuously. Active people are always around the properties, and if they see something amiss, like a leak, they’ll have it checked out. Scheduling a plumber to stop by a property does a good job, if not better, than doing a standard inspection every six months. 

How Do You Get Started with JWB?

If you enjoyed today’s show, join our Facebook Group, Jacksonville Rental Property Investing, our new name. You will find an active Facebook community at www.jwbfacebookgroup.com

If you are thinking about investing with JWB, tune into our Not Your Average Investor show on Tuesdays and our Property Of The Week on Thursdays to feel more comfortable about our approach.

You can also go to www.jwbinventory.com to see what properties are currently available. We encourage you to contact the JWB team for a consultation to find out how our property management team can be of service in providing passive income cash flow. 

When you are ready to take the next step with Jacksonville real estate, visit www.chatwithjwb.com. We will walk you through the numbers to show you what your potential Return On Investment will be.

We hope you enjoyed learning how to find good tenants for your Jacksonville rental property. When deciding what residents you want to live in your rental homes, ask the questions to help you make the best decision. When rental property management companies like JWB own rental properties themselves, they better understand cash flow and its benefits. That is how you can get an above-average ROI on real estate.

If you have questions about your real estate investment options with JWB, contact us. You’ll be glad you did!

To Your Success,

Gregg Cohen

By Gregg Cohen

I am a co-founder at JWB Real Estate Capital, and I love to talk about investing in rental properties! You’ll often find me here contributing to our blog and in our Facebook group connecting with the community & sharing insights.

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