QUESTION:
“Do you as a Mobile Home Park Owner advertise specific criteria that you use to approve or deny Tenants?”
“If yes you do advertise the specific criteria, what specific criteria do you use? Do you use any of the following?:”
Evictions: No Previous Evictions
Monthly Income: Specific Amount Of Monthly Income Needed To Qualify
Verifiable Income: Must Be Able To Verify Income
Rental History: Must Have Prior Rental History
Below is a local Craigslist Ad for a Mobile Home that I ran across:
"2 Bedroom 2 Bath Mobile Home for rent.
— $695 per month.
MUST HAVE NO PREVIOUS EVICTIONS!
$695 Deposit Required-
$2085 monthly income needed to qualify. Must be able to verify income—
Prior Rental History Needed.
-Background checks are part of the application process
NO Pets,
NO Section 8
This is a NON_SMOKING unit
Phone Calls ONLY- Text will not be responded to – Call"
The above is NOT my advertisement.
However, I love the advertisement.
We tend to get a lot of interested people who cannot possibly afford the rent (and we have low rent).
We tend to get a lot of first-time renters. We have approved first-time renters and they are currently living in our MHs, but we have found that they really do not understand all the costs involved in renting or they complain about everything.
We are actually very responsive Landlords.
We have sprayed a POH for pest/bug control at least 4 times in the past two years for one specific Tenant. Finally, I put my foot down and said that we had just sprayed the POH less than 6 months ago and that any other pest/bug control was their responsibility.
I also love that ad. Like you Kristin, i’m getting a lot of folks who simply don’t qualify for my rentals, based mostly on income levels. I’ve had folks with monthly incomes of $700 apply for a $400 per month rental.
Nick, I feel your pain! I just simply do not understand how people who make $700 per month think that they can pay $400 per month and also pay their other bills (important bills like food).
Does the US not teach money management in school? Money Management is such a vital skill.
We understand that you cannot discriminate against pregnant women (and we do NOT discriminate):
“We do NOT discriminate based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and disability.”
However, we get a lot of people who want to play house.
They barely make enough money to feed themselves (and cannot afford housing), but they have a girlfriend or fiance and the girlfriend/fiance is pregnant.
On top of this the person actually working at a real job is usually the girlfriend/fiance.
It just boggles my mind that people think just because they are pregnant that they need a home of their own. On top of that they usually also want to get a dog.
People…what are you thinking? How are your bills going to get magically paid?
I love me some Public School Teachers.
I am just concerned that the US needs some actual courses/classes about the real world and budgeting.
I have been tinkering with my advertising approach too, and I plan to try this next…
Our last experience was painful… Approach 1 - We have advertised generically and received an overwhelming number of calls (literally 15 per day) and did 30+ showings in a month to unqualified people. Approach 2 - We took extra pictures and provided thorough detail on our website (e.g. 100+ pictures with detailed descriptions of everything) and required an application + fee prior to showing. This got very little traffic but the applicants were typically good quality, but took much much longer than expected and desired. We think with this approach we left some food on the table and were too strict.
So my plan for this next iteration…
Have the potential tenant sign a “pre-showing application,” which will confirm the above items and a) get permission up front to contact their employer and b) contact former landlords. To me that 75% of the battle - if those pass muster then show them the property and still interested collect the necessary items for background / credit check to confirm they told you the truth on the prior forms (e.g. addresses for landlords match up, no evictions) and confirm the other items to reach a final decision.
Like your Approach 1 we advertise generically (state that we do a background check, credit check and eviction report), but with no specific criteria (such as a specific dollar amount of verifiable income…we just state that they need verifiable income).
Like your Approach 1 we also get an overwhelming number of emails (I do emails as opposed to phone calls as I have a low tolerance for listening to others drama and why they have a drug charge on their record but they are really a good person).
After they answered some basic questions we would give them the address of the Mobile Home, so that they could view the neighborhood, the Mobile Home Park and the exterior of the Mobile Home.
If after viewing the above they were still interested, we would then show the inside of the Mobile Home. For the inside of the Mobile Homes we ended up doing “Open Houses” for 2 to 3 hours on certain days to have all these prospective Tenants look at the interior.
@jhutson hutson , that is awesome that you are tinkering with your advertising approach.
We are always trying to tweak our processes to make them better for our MHP and for us.
Your Approach 3 of a “pre-showing application” sounds great.
@jhutson , I have a couple of questions:
1.) For the “pre-showing application” will you have them give you one or two months of their pay stubs in this process?
2.) When will they pay an application fee (before or after showing the inside of the mobile home)?
3.) Do you allow people with prior evictions?
4.) How much verifiable income do you require (what percentage)? We require 30% verifiable income.
We have had some people who “say” they have a job on my basic questions, but come to find out their job was not verifiable (they work for themselves).
For people new to the park business the above discussion is the reality world of park owners having rentals in their parks and the problems are increasing with time. When buying parks do you want to rent homes or rent spaces–thus if renting homes is part of your business plan, plan for much more hands on time and money expended to accomplish the job and frustration. We discriminate in the sense we are very picky with our potential new homeowners–it is our responsible to provide a safe nice environment and with a husband and wife looking for problems at the interview time and former place of resident we have in the last 30 years have less than 4 evictions. A park without POH generally is very easy to operate at a distance.
I plan to call their employer and confirm their pay per cycle, and also verify the duration of their employment. I would get a copy of one pay stub from the applicant to see both sides marry up. The pre-showing application would obtain their consent to this. If they have their own business I would want to see 12 months of bank statements. Maybe longer especially if their business model is seasonal and requires money management through the slow part of the year.
The application fee would come after the showing, assuming they get that far.
I won’t look at people with prior evictions unless it was 5+ years ago, and their financial situation and prior tenancies reflect they have changed their ways, which is very uncommon and I have not done it to date.
We require 300% monthly rent as their monthly income (e.g. for $500 rent then must make at least $1,500 month).
I would probably be less strict on this if I was just plain renting, my intention is for these people to own the home - and am fortunate to have good demand, like you, to ask for these extras as a means to weed out the tire kickers. If they aren’t organized or qualified enough to get past a “free” pre-showing application then they’re not who I want living on my property.
This could fall flat on it’s face too, but think it’s a good mix of checks. The key will be turning around these application quickly, so that these people can see the home the next day if they’re truly interested and are motivated while meeting the criterion…
I would agree that an all Tenant Owned Park is the ultimate in a MHP.
Unfortunately, even if you start out with an all Tenant Owned Park you “could” eventually end up owning some Park Owned Homes. It depends upon your business model. It is just the nature of the beast. A MHP is definitely a dynamic creature.
Finding an all Tenant Owned Park at the correct price with the your correct criteria might be like “finding a needle in a haystack”.
Ultimately, just like a person selecting their future primary residence you have to prioritize your needs and desires.
Some of that prioritization might be accepting Park Owned Homes.
@carl it would be great for us to learn from your experience. I suspect beyond the four evictions you’ve had some abandonment, or other reasons where there was turnover of a unit and the Park had to get involved… What is your strategy to get these home re-occupied with a desirable owner? I appreciate you seem to always have people banging down your door to move their homes in, but that cannot always be the case if a home is vacant and already in place.
Our units need filling as part of a turnaround - problems we chose to take on as part of a sweat equity strategy, not because we’re evicting people due to poor screening. We’re honing our processes to find the right person faster and easier, not to just find someone that’s good enough to be in a Trailer Park.
We use renting as a tool to vet our homeowners as a good fit for the community. We find this approach more attractive than immediately selling a home to someone and finding out we don’t like them and evicting them from their home or the property. There are benefits and risks to any approach, and there’s more than one way to skin a cat.
We buy parks that have tenant owned homes and they have room for expansion. We had another resident today bring in a new home with no freebies on our part. We have put in 12 new sites in the last 6 months and have over half full plus will put in another 6. The problem can be pricing but in our case if the parks do not met our parameters we pass. It is like marriage be very careful what you hookup with–divorce is not a money making concept. When we had a150 space park we would end up with two homes a years but since we were strict on the quality and upkeep of homes in our park the homes would have a value of around $45,000 and sell quickly since we are in an upscale market. We never renting those homes and if needing any attention they were upgraded. We have owned fix up parks in the past but we found we could make more money easily with great parks in nice areas. Owning parks with POH is a choice and there can be a good learning curve from owning them–it not our choice anymore. The main point is HOW to determine a new possible resident will pay on time. Greg is right on with his ideas about tenants. I will say be tough up front or deal with evictions. Being tough is if there is are ANY questions or ANY uncertainty about the applicant(s)–move on you are operating a reform school.
I put no large dogs and no felonies in my Craigslist ads. I also put references and application required. You will save yourself so many bad calls.
One thing I will say that is so important. Screening on the phone! When I hear you guys say “Pre Showing Application”, it made me realize that the first phone call I get from the prospective tenant is their “pre screening”. I weed out 90% of the calls I get with the first phone call. People can be very honest if you play your cards right on the phone call. Get the people talking.
Here are several red flags issues that are easy to figure out within a few minutes or less.
They have a large dog.
They have a criminal history.
They say they must move immediately. Or they talk about all these places they have lived.
Listen to how they sound and talk. Do they ask you questions that an established, consistent, responsible person would ask? Or do they sound like the opposite type person?
When they talk about negative things in their situation are they blaming others or tackling the issue head on?
Do they act like they have something to hide? ( I can usually find out what it is on the phone)
Do they just want to rent or are they looking for a long term home?
Do they have a good steady source of income?
Its so easy to weed out the bad ones with practice. Granted I’ve been screening tenants for 14 years, however if you make a list of basic questions to ask and don’t feel good about the people after that, listen to your gut and move on. I run my parks much like Carl does. If you have nice parks and manage them yourself. Do yourself and favor and get the best of the best tenants and let them help you have an easier job.
I will often leave a home for sale and empty for several months, waiting on the right person, and when that right person comes along, they often pay lot rent for years and years, often even a lifetime. Meanwhile they help you manage the park. When you get a park full of great tenants, they almost become like a bunch of “mini managers” After doing this for years, its just keeps getting easier. Having nice homes and nice parks obviously helps also. I used to own a all rental park, and would never buy another one again!
I love your ‘several red flags’ list. Your list is great.
Thank you for sharing your 14 years of experience and knowledge!
We greatly appreciate it!
@mobilehomepark , I really like your following ‘red flag issues’:
“They say that they must move immediately.”: We get a lot of ‘we need to move in immediately’. Immediately for us = Not our MHP. We have a process that is not immediate, so that weeds out these individuals.
“When they talk about negative things in their situation are they blaming others or tackling the issue head on?”: When people start talking about ‘yes, I have eviction but it is the Landlord’s fault because of x, y, or z’. Other’s fault = Not our MHP.
“Do they have a good steady source of income?”: We get people who have worked at their job for a whole 1 month and want to move in. Short employment history = Not our MHP.
@mobilehomepark , I have a couple of questions:
1.) When you screen on the phone, how do you tell them that they are not approved?
2.) Do you give the non-approved Prospective Tenants the ‘reason’ why they are not approved?
3.) What income requirement do you use?
Tactfully. This takes practice. Each person has a different situation and personality. I just find a way to end the conversation quickly. No reason to waste my time or theirs. Often times I’ll just say, “I’m sorry it does not sound like We are going to be able to help you, best wishes”
No, unless its obvious, like they have a large dog or felony. Sometimes the reason may offend them. (I am not going to say to them, "sorry you sound irresponsible, move around alot, ect, ect.)
Common sense.
Be consistent, and treat everyone the same and fairly. However you do not just need to do things based on just numbers. I am currently working on updated my Policy Procedure manual, so that how we choose tenants is recorded and consistent. Do not deny people based on a protected class and be consistent.
Hi Kristin,
First I have read your posts and appreciate your detailed and well thought out comments. I do like this ad but that does not necessarily mean it will be most effective for you. We do have 2 pre-screening points:
We state that we have strict background checks (nothing detailed like the one you listed)
Phone message when we cannot pickup immediately also talks about the detailed screening
History:
We started with #1 and realized that a) people dont read. and b) if there is too much in the ad, they dont read and move on.
So we adopted #2 and found it cut down on the number of idiot callers. (sorry but I am quite cynical like Frank).
My Question to you is: Have you tried different variants of the ads, then reviewed the quantity and quality of the responses? You may find that for YOUR market this ad is great. Or it may be the extreme or somewhere in the middle.
Just my thoughts. Try it all. You seem very bright and can do the experimentation especially with CL ads.
Be very strict with screening policies, discriminate if you choose to do so. Remember it is easier to deny an applicant than to evict. Do not be afraid to make the tough decisions that protect both your tenants and your business.
One of the biggest mistake landlords always make is trying to make an applicant fit. They try to find reasons to over look small issues that are contrary to their screening policy. Never do that. When you set a minimum credit score at 650 a applicant with a 649 does not qualify. If you are going to have standards stick to them.
When I screen I am looking for reasons to evict not reasons to accept applicants.
"Have you tried different variants of the ads, then reviewed the quantity and quality of the responses?
The Craigslist Ad from this post was one that I ran across.
I actually use a very, very detailed Craigslist Ad with lots of information and lots of pictures.
I do agree that there are some who do not read all the details (such as “No Section 8”).
Our initial Craigslist Ad did not include the following:
Must Be Able To Verify Income
Prior Rental History Needed
However, we have changed our initial Craigslist Ad to include the above.
On the first Craigslist Ads we received an excessive amount of responses. A lot of the initial responses we received were from boyfriends/girlfriends who were first time Renters and that wanted to play house (as they had a baby coming).
We determined the following:
Must Be Able To Verify Income: No “Self-Employed People” as we inherited some of these Tenants in our Turn-Around MHP and they were the ones that gave us grief. Please note that not all “Self-Employed People” are bad. We just selected to go down the road with Tenants that receive steady paychecks.
Prior Rental History Needed: We found that those who have never rented do not understand what a great deal that they have. We are very responsive Landlords. We have our Contractors fix issues asap and even provide new, smooth top ranges and refrigerators. We desire Tenants who have rented in the past and who know the ropes.
Once we added the above guidelines our response level went down, but we gained more qualified, prospective Tenants.