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.
Great discussion. I learned much. Here’s a few more thoughts relating to Fair Housing/ Illegal Discrimination:
You can discriminate against people on everything but the illegal traits (age, family status, sex, religion, country of origin…);
The new Supreme Court ruling in the Texas Dept of Housing case concluded that legal discrimination that results in disproportionate representation in your park of certain racial groups equals illegal discrimination. Thus, having a rule that you won’t take any felons can leave you open to an illegal discrimination/fair housing lawsuit if such a rule results in fewer from any minority residing in your park (thus you have to racially discriminate in favor of some so you don’t racially discriminate - go figure that out). The bottom line is if you have a “no felony” guideline, it must be subject to some further examination. For example, a felony theft charge from ten years ago with a tenant that has no problems since, is married, and has a good job history must be treated different than a felony sexual assault where the guy was released from prison two months ago;
Post your non-discrimination company rules on your websites and applications. Make sure anyone you employee who screens tenants knows the rules and has signed off saying they know the rules. If the government ever gets involved in your operations, they are a like a bad relative that moved in and won’t move out; and
If you only advertise for tenants in a medium that attracts only a certain subgroup of tenants (ex. working Hispanic families via a Spanish language newspaper) and your park tenany reflects that, and you live in an area with predominately black residents, you’re subject to a Fair Housing complaint.
It’s important to do all this correctly as Park General Liability insurance excludes coverage for discrimination claims. “EPLI with 3rd party” coverage will cover tenant and employee discrimation claims, but that coverage generally costs an additional $1,500/year for most park owners.
Kurt,
Thanks as always. We have one exclusion criteria - can you tell us if this will be a problem:
– No people riding their dogs in a motorcycle side car - all riders must show proof of license
ok iv’e been looking at MHP’S and alot of them have some POH’S in them. what would peoples inputs be to sell them to the tenant and let them be responsible for all of the upkeep. it seem’s that people are more responsible when they own something vs it’s the landlords problems and or they just outright thrash the place!!! alot of pepole told me not to buy a park with POH’S in them or you’ll be getting calls all hours of the day and night
