I am going to date myself here and give you one of those ‘I remember when’ stories (damn kids get off my lawn). Things have come a long way and life is a lot better for landlords now that we are in the internet age.
Take advertising for example: before the Internet, the only way to advertise your rental property was in the newspapers. It cost you close to $40 for 3 lines of abbreviated verbiage that was hard to decipher and didn’t explain anything.
West End bung, 3 bed, 2 bath,
Avail. Apr 1, no smoke, $1500,
612-555-6245
Does that tell you anything? No. If you are a potential renter, you had no choice but to phone the person who put the ad in the paper for more information. As a result, the landlord was besieged by prospects, most of which weren’t qualified or looking for what you were renting.
That was a waste of everybody’s time and trouble. Plus, it cost you $30 to $50 for only 3 days. Then you had to do it again and again until you rented the place. Now you can post an ad online with one or all of several great rental websites. Each city or location has some that are better than others, so check around.
These websites let you post pictures and give all the details of your property. Most have no restrictions on the amount of wording you can use, they don’t use code words, and the one-time fee (typically $20 to $30) lasts for a couple of months or until the place is rented.
Now the prospect can get all the information they want and they can see what they are getting by viewing the pictures. The address of the property is also listed in the ad, so they can do a drive by and check things out before they even call you.
Now you might only get 2 calls instead of 30 on your ad, but those 2 prospects are qualified. They are okay with everything short of physically getting inside and seeing the room sizes, layout, etc. Your closing rate (the percentage of prospects that you turn into renters) should be much higher in the new world. By the time they show up at your door, they are already okay with the rent, the terms, the location, and quality of the exterior of the building.
All you have to do is close the sale (if this is the right person for this property). This has spelled death to the newspaper industry as everybody does their advertising online now, but maybe the papers should have charged less and offered more to their clients when they had the monopoly.
Do I sound like a cynic who has paid way too much for gibberish ads over the years?
I really like the new world as it pertains to being a landlord. Online advertising also opens up your rental to anybody from around the world that is moving to your town to start a new job.
Before, somebody would have to get the newspaper from the town they were thinking of moving to in order to check out the rental situation before they physically paid a visit.
Now with the Internet, a potential renter can build a full list of properties they are interested in seeing, make calls (text or send emails) to landlords, and get a day of showings set up before they even leave their hometown. I have rented units, sight unseen, from people in other parts of the country in a tight rental market.
The other thing that this new style of advertising helps to reduce (but not eliminate totally) is the number of no shows when you finally arrive on-site to meet the tenant. This, honestly, used to be the part of the landlord game that I hated the most.
You would do your three-line ad in the paper, a bunch of people would phone, you would interview them as best you could over the phone, and then arrange to meet the people that looked the most promising. You would arrive at the proper time but the prospect would not.
That means that you just wasted 1/2 an hour to get there, 20 minutes waiting, and 1/2 an hour to go home again. Multiply that by 5 or 6 times before you finally found the right tenant and it was a pain to rent properties. I hated it with a passion.
Looking back, I think that is the biggest reason why I fixed and flipped in the early years instead of keeping rental property. One of the big reasons for people not showing up was that the first phone call between the prospect and the landlord, in the old world, was the first time the prospect learned the address of the property.
You would make a date on the phone and then the prospect would drive by the place. If he didn’t like it, he never called back to cancel the appointment. Or maybe he did show up to the appointment, saw the place, and just kept driving. Now they can see the address on the web, I state right in my ads that the prospect should do a drive by first and then give me a call. Again, this doesn’t eliminate wasted showings, but it greatly reduces them.
Verifying applicants is also easier now. There are websites now that allow you to pull a credit bureau report on a prospective tenant for, typically, less than $25 (make sure you follow the rules of your jurisdiction and ask for permission to pull the report on your application form). To save money I only do this as the last step of an applicant that I am ready to approve. An applicant’s credit score shouldn’t be the only basis for your decision to rent or not but it does provide some valuable insight to help your decision.
The Internet has also made collecting rents a dream. Before, as a landlord, you would accept cash (potentially dangerous and not recommended), check, or money order. Checks can bounce. Now almost all my tenants pay by email transfer. You get an email, you click on the link, it puts into your bank’s website, you answer a security question, and boom! the money is in your account. You don’t even leave the house. The name of the person shows up on your bank statement so you can keep proper track of who is paying and who is not. It also keeps a permanent record of when the payment was made in case you need this information later.
Looking back I used to fix and flip because I hated being a landlord. I have gotten much better at managing over the years and the internet has been a big part of that improvement.
