The Good Stewards Real Estate Podcast

Property Management #1: Leasing & Screening

Episode Summary

Leasing and screening is the secret to retaining your investment. Make property management easier by starting early with a project management system.

Episode Notes

Leasing:

2:17: We use Rentometer.com when estimating how much we can expect for rent, but usually start on the higher side since we’re bringing a better product to the market. Don’t underrent your property, it’s a common mistake.

4:27: We recommend using RentLinx and ShowMojo to automate the rental listing and showing process. All you have to do is manually list on Craigslist and coordinate pre-lease viewings on occupied properties.

7:51: It’s important to have any leasing leads go somewhere. So with a phone call or text-based listings, you need to make sure you keep tabs on these by using some sort of CRM, spreadsheet or whatever works best for you to keep track of people and who’s doing what. If you need to, use the call service CallRail to keep a record of conversations over the phone.

10:57: Starting out, you have two options. (1) hire a property manager or (2) manage properties as you aquire, which you could probably do up to about 20 units. But when the time comes to hire a property manager, you have to manage them. Remember that this isn’t their livelihood, net worth or future

13:49: Have a good website where everyone can find everything they need. Rental applications, co-signer agreements, maintenance request forms.

Property Management Software:

15:08: We use Rent Manager for it’s robust backend accounting platform, but Appfolio is another seamless, customer-experience focused system. You need to track what’s going on, even though you may be able to handle a few properties in your head, eventually you’ll need to write everything down. Going with a property management software can save you a ton of headaches in the future.

Screening:

20:13: Establish your screening guidelines and stick to them. Make sure you’re following local and federal screening requirements. Knowing previous rental experience is particularly good to know because it’s a good indicator for how people are going to treat your properties and if they’ll pay on time.

22:00: We use a third party software since it’s a pretty time-consuming process and want to avoid any employee favor over one tenant to another.

23:15: Our general rule is 2 years of good rental history, rent is paid on time and their income is 3.5 times rent. But as a multi-market investor, you want to treat each market individually.

26:00: Before Stewardship Properties entered the Kansas City market in 2011, the screening procedures allowed for far more relaxed policies. But when we brought those policies to Kansas City, it really tanked us. We now never make exceptions and hold to the federal standard of not treating one resident from another.

28:13: The only allowances we do make are cosigners if you don’t have the rental history or income.

29:42: Andrew uses Red Star for screening in Kansas City. He wants to avoid any chance of staff putting favor over any applicant.

Connect with the Good Stewards:

Episode Transcription

Amanda: Specifically in Kansas city. We had a really strong, uh, rental market in Oregon, and so we took, are a little bit of our relaxed policies and applied it to Kansas city when we first started getting out there in 2011. And what that did was really tanked us.

[00:00:17] Jandy: Welcome to the good stewards podcast, the only podcast dedicated to seasoned real estate investors who want to maximize the cashflow potential in their business. We are buy and hold investors with a thousand plus properties and markets across the U. S. Who bring an insider's view into the nitty gritty details of real estate investing. If you're looking to develop the mindset teams and systems that can dramatically build your real estate business and net worth, you're in the right place.

[00:00:51] Ryan: Welcome to this episode of the good stewards podcast. I'm Ryan Dawsey.

[00:00:55] Amanda: I'm Amanda Perkins.

[00:00:56] Bill: I'm Bill Syrios

[00:00:57] Andrew: and I'm Andrew Syrios.

[00:00:58] Amanda: Today we are going to cover best practices for leasing and screening that we use to manage, um, our properties with our in house property management staff. Before we dive in, just want to remind everyone that you can find us@thegoodstewards.com.

[00:01:16] Reach out and connect with us that way. Um, so diving into this, um, we, part of our company ma like mantra as that we manage all of our own properties. We found that that works the very best for us. And over the years we have stopped and started and tried a lot of different things and it's gotten us to where we are today.

[00:01:42] And, um, you know, like, so you get your good deal. You're, you've got it rehabbed and you're ready to go to the market. What does that mean? Like what do you do next? Um, for us, uh, you know, you're going to determine that you're going to rent the properties. So what kind of a rent are you going to assign to the property was probably a good place to start.

[00:02:03] Um, something we normally do is kind of test the markets, see what everybody else is kind of renting, like properties for. Um, there are some websites, Ryan, don't you guys have a website? You kind of go to.

[00:02:17] Ryan: Yeah, we use Rentometer and then we'll also look at like Zillow, nearby rentals, some Craigslist stuff. And with us, we always push it a little bit. Like if everybody else is getting $850, I'm like, why not? $875? We haven't had a problem filling stuff.

[00:02:33] Amanda: We do the same thing and a lot of that for us, it just feels, um, worse oftentimes bringing a better product to the market. And our price should reflect that. And, you know, oftentimes, um. You know, we're going after a certain resident, that's what we're looking for. And so, you know, we want that price and we, our properties reflect it. Um, the other thing about that is, uh, you can always lower your price if you're not getting a good person. Uh, you know, you're not finding somebody to rent your property, but it's hard to up at after you start low. So we always choose to start high.

[00:03:09] Bill: That's one of the most common mistakes is renting to under market and what renting under market does for you. It tends to cripple a buy and hold strategy, particularly if this is a common theme in your, in your portfolio. Uh, you need those dollars to help you, uh, not only service your loan and your taxes and insurance and everything else, but also to move ahead and to improve your properties over time as well. So do not under rent your properties.

[00:03:43] Ryan: I would actually say the vast majority of properties we purchased off market at a discount. The number one thing they all have in common is they're under rented. So if you want to sell to us for pennies on the dollar, feel free to underprice your stuff.

[00:03:57] Amanda: Well, and I mean, the thing with that too is once you get somebody in there, you can only raise your rent and you know, so much on somebody.

[00:04:06] Um, you know, actually in Oregon we have a rent control. It's pretty, um, it's pretty favorable at this point. I think it's a little over 10% after you add their, 7% and some cost of living adjustments. But still, I mean, you know, you maybe don't feel good about raising 10% annually, so it's good to just get it out there, get what you want.

[00:04:27] What we try to do is, um, you know, we have a, we have a procedure with this, so we, you know, we. We use rentlinx.com, which is a, uh, it's

[00:04:39] Ryan: got like a syndicator.

[00:04:40] Amanda: I like a platforms that we can put our properties on. It shoots it out to Zillow, uh, apartments.com I believe, basically, I think around 15 or 20 websites that people go, Craigslist, everything but Craigslist,

[00:04:53] Andrew: Put it on Craigslist yourself and rentlinx.

[00:04:56] Amanda: Right. And so, you know, we spend the time to write a good description. We get really good quality, um, photos of our properties so that they market themselves well and, um, you know, throw it out there, put a sign on the property. And another thing that we do is we, um, utilize a company called show mojo.

[00:05:17] Um, I think Kansas city uses it. No, you should show mojo as well. And, um. That allows people to schedule a showings online, which people like to be able to do without having to reach out and actually talk to someone these days. Um, and if the property is vacant, um, if you're qualified, you can get a code and actually get into the property.

[00:05:37] So it actually limits who we have to send out. Yeah.

[00:05:42] Bill: one of the things about that, Amanda, is that we haven't had a bad experience yet. So I think people think, Oh my gosh, somebody who's going to go into a vacant property without me being there. That could be a disaster. Well, I suppose that is possible, but they, they have figured it out.

[00:05:57] Rently is another company that does this. We have used, show mojo primarily

[00:06:02] Ryan: Rently is more expensive for the same thing.

[00:06:04] Bill: Yeah. But it's been. Uh, particularly if you're in a market, when I'm in a Metro area, that you have properties that are in, uh. Very divergent geographical locations. This is going to be a huge time saver for you.

[00:06:20] So I am a huge fan of show mojo,

[00:06:23] Amanda: and that works amazing when you have vacant properties that you're renting. But, um, something that we do in Oregon and, um, with our portfolio because we've been managing it for 30 years now. Um, we're doing a lot of pre-leasing. So most of our properties that are coming on the market are currently rented. You know, once we get our 30 day notice from the current resident, we're putting it on there, or with our student population rentals. Um, you know, we spend a good chunk of the year marketing, and so show mojo would work great for scheduling those showings. But, um, if you're showing occupied properties, you need to make sure that you have staff there because you can't, you can't let strangers into an occupied house. But it works great in our markets that either new rentals coming online that haven't been rented before, or just maybe places that the pre, you know, we haven't necessarily got the pre-leasing under our belt.

[00:07:20] Bill: Show mojo does, one of the nice things, even with occupied properties, when you look at the schedule, a person can schedule, but they can't schedule that very day. They can schedule 24 hours later or so whenever your staff, whenever you set it up that, that, that, uh, bet, uh, appointment could come in the calendar, you're ready to go. If they schedule at that time so they can schedule a occupied property. You just have to know your scheduling and have it consistent with what you set up.

[00:07:51] Ryan: I would say on kind of the topic of leasing, it's really important to have your leads go somewhere. If you're using something like show mojo, may automate some of this stuff. Um, but if you like. Say you're on Craigslist, Zillow, and just have your phone number up there and you're getting phone calls and text messages. It's pretty easy to lose track of who's called in, who you've gotten back to, who you haven't. And uh, you know, kind of like with sellers, we never know when the person we're going to buy from or the person that we're going to want in that property, that person who's a good fit for it is going to call, right.

[00:08:22] So, um, I would highly, highly recommend using some sort of a CRM, even if it's like a Google sheet or Excel document of the address, who called what the next step is and when it's due, you have to work these leads the same way you do anything else. Um, if you just wait for like the perfect person that happens to call when you happen to be available, who happens to be able to do a showing, then who happens to lease it? Good luck. A lot of the times it's there. Everybody else they're calling. I just looked for rental housing, so I'm super familiar with this. Like nobody calls you back and nobody picks up live, so it's super frustrating. As you're digging through looking for properties. People in your market are no different. So if you're not going to pick up live, make sure you're getting back to them in a timely manner. We had places that got back to us two weeks later that were like, Hey, I just wanted to set up your walk through. And it's like, yeah, I live in a different house now. Like, I no longer need you. Um, so just make sure that you're tracking those, that you're following up with people.

[00:09:21] Um. One thing I would recommend if you're using something like a Craigslist or like a Zillow where people, there's just a phone number for them to call, right? Maybe it's a for sale or for rent sign out front. Um, there's a software called CallRail. You can set up that we'll record all conversations.

[00:09:38] So somebody calls in, they're interested in renting from you, you can go back and listen to it and Oh, yeah. Okay. That's what happened on that call. So, um, you know, if you're gonna track it somewhere, great. At like a minimum, if you're not going to track it and just kind of like fly by the seat of your pants, I'd use something like call rail.

[00:09:55] So you at least have a record of who called and what the conversation was.

[00:09:58] Andrew: Well, and quick point, Ryan lives in San Diego, and if you're a property manager in San Diego, you can treat tenant prospects like absolute trash, uh, because there's, you know, because, uh, yeah, you have a problem. So anywhere else. Yeah, but in San Diego, you, you don't have to respond.

[00:10:15] Ryan: Yeah. I mean, if you're in like a super hot market, cool. But at the same time, I will say as a caveat to that, um, we had a couple of places that we were interested in that reached back out to us that they were like, Holy crap, you guys are 10 times more qualified than, than who we just signed a lease with. We had several places that were like. Oh, well, I wish I would've talked to you yesterday. Right? So, you know, you never know who's calling and when, and like wife's military salary. I do. Well as an investor, really, really good applicants. Uh, the only reason we're not buying is we're probably only going to be here for about a year, but, uh, you never know who's calling. And, uh. Later on, I'll, I'll hit on a story about that of property that took us six months to find somebody good.

[00:10:57] Amanda: Well, and another point with that is, I'm speaking of our companies that we have several hundred units, and so we've, over the course of however many years. Hired staff to handle this for us so we're not out chasing down these leads, getting people in places. But if you're just starting out, um, your options are either to hire a property manager, which can be effective. You need to make sure you manage them, and then they would do this for you or to handle it yourself until you can afford to hire somebody else. And, um, you might be able to handle 20 on your own while trying to acquire property and oversee that, but at some point you are going to have to hire somebody. Um. We typically start with sort of like a catchall, like an admin person that can do some property management, met with, help some bookkeeping with help some leasing agent, and then kind of fill it in as our property. As we, our portfolio grows. But you know, if you're starting out, this is going to be you. So, you know, you need to know, where am I going to find good quality residents? Well, um, online is the answer and a lot of, you know, apartments.com as effective. And like I said, we use. Rentlinx cause it pushes out to everywhere.

[00:12:09] Um, previously we had a lot of success with Craigslist. Um, that seems to be less of a place that we go, but we definitely still have active Craigslist ads just so that we're trying to. Find everybody that's looking, because people usually are searching the internet. Um,

[00:12:27] Andrew: and, but don't forget your for rent sign in the front yard though. They're cheap and simple and you're still going to, uh, a small but reasonable percentage of your leads from them.

[00:12:36]Ryan: I will say on Amanda's note about hiring somebody when you do You still have to manage that person. Like you want to watch your business just, you know, absolutely fall apart. Hire somebody, train them, and then just take your hands off. And that goes for acquisition, management, construction, any of that stuff. You still have to manage them because at the end of day, this is a job for them. This isn't their livelihood. This isn't their net worth. This isn't their future. Right? So no maintenance guy for the most part, I mean, don't get me wrong, there's like exceptionally rare human beings that do everything with 100% excellence, but for the most part, they're gonna need some feedback. They're going to need some, Hey, on this last one. I think we missed the mark a little bit. Here's what I want done differently on the next one. If you don't provide any oversight, I've noticed like quality of work, quality of leasing stuff starts to go down, and we experienced this firsthand in Indianapolis. Quarter one we had a property manager that we ended up having to let go and like stuff started to fall apart in the, in the 90 days she was with us, cause she wasn't like, wasn't working leads was missing. Leasing appointments was not following up with people. Um, so when you have employees, you do still, you have to lead them.

[00:13:49] Bill: You know, I'm also a huge fan of, uh, having a good website, uh, particularly as you grow. Um. Our website is actually, Oh, we got the domain name in 1999 I think it was. So we've had a 20 years. One of the reasons is we caught on early is because we had students and we realized, uh, you know, increasingly students were on the internet. Now there's probably 99.9% of the students on the internet, and that number is rapidly getting close to that for just the population in general. So people are shopping online and they're shopping for properties online. And if you have a good website that includes a lot of your, you know, has your, uh rental application has co-signer agreements, has pet signer agreements,

[00:14:40] Ryan: maintenance request forms.

[00:14:42] Bill: Yeah.

[00:14:42] Andrew: And property management softwares can integrate and tears into your website. So that's something you should look for as well.

[00:14:48] Bill: Right. So early on before maybe even you feel like you need it, think about, uh, putting together a website and maybe Amanda could talk a little bit more to the software options that you'd have for property management, because you want to stop doing that with pen and pencil, uh, and paper a very quickly.

[00:15:07] You want to,

[00:15:08] Amanda: yeah. I mean, one of the things having that, um, we, we use rent manager, but if you're, um. I mean, I know that a lot of people have success with a lot of different things. We use rent manager because it's robust and we're in so many different markets that it's great for us. Um. But that, you know, like, that allows our management to, you know, like from a bird's eye, you can look and see, you know, what rents are being collected, how many applications are coming in, all of that sort of thing. Everybody has access to look at it. So you're sharing the same information. Um, you know, if you're starting out, you probably can do it. Um. Maybe it was an Excel spreadsheet and paper, but you know, that's gonna you're going to get to a point where you're not gonna want it to be wanting to keep all of that information in your head. And so, you know, we store everything in our, in our property management software, including our leases, our property pictures, notes. We run our service orders out. Basically, we run everything through our property management software.

[00:16:05] Bill: The property management software that's really come on in the last few years is one called Appfolio. We don't use it because it's accounting side is not as robust as Amanda was talking about as a, as a Yardi or as a Buildium or as a rent manager, which is the one we do use.

[00:16:23] But the nice thing about AppFolio is it's got a, basically a built in website. You can be up and running very quickly. They all kind of look the same. They've, they've kind of figured, figured it out. So I would. If you're looking around for one, I would check that one out. Uh, particularly if you're not running hundreds of units,

[00:16:41] Ryan: a very nice platform. The user experience is really good. Uh, I will kind of touch on Amanda's kind of point here with using a property management software. And, um, if you catch anything that I've said in this episode, um, do this right from the beginning. If you start out with like a composition notebook, Excel, you're trying to remember like, Oh, three 42 and needs a new, you know, washer or whatever.

[00:17:05] Let, let's say you run an Excel spreadsheet and that's great. You do that for a while and then you get to the point where you realize, okay, I want to switch over. Well, now you have two years of data on 20 properties that.

[00:17:16] Amanda: You're not going to manually put in. So it is worth spending the money from the beginning. It's not that expensive.

[00:17:22] Andrew: In Kansas city, we went from, we had a hard time picking one because Eugene was on and olds on old property management software, so I think we went from Excel to a, I won't name them, but we went from one to another. And ended up finally with rentmanager, which was a lovely project.

[00:17:40] So yeah,

[00:17:41] Ryan: How much fun was that to move around a whole bunch.

[00:17:43] Andrew: It was lovely, especially since you had to input everything. We didn't have very many properties though at this point. I can't even imagine. I have heard of a property management company, a friend of ours who had well over a thousand units switching property management softwares. Yeah. I mean, you even, you have to leave like one portal, open, so you can get to the really old data, but that just transferring all those residents from one software to the next is a nightmare. I don't even want to comprehend.

[00:18:07] Ryan: I think I just had a mini heart attack when you mentioned a thousand units and switching software, um, life is too short to stress yourself out like that.

[00:18:15] Amanda: So I sort of mentioned, um, you know, like when you're just starting out pre-leased pre-leasing isn't gonna be a huge, um, option for you, but it's something definitely to aspire to. And it's something that's been really effective for us in Oregon. And what that means really is, you know, the minute we know a property is going to be available, whether we know Elisa's ending or whether, um, you know, a 30 day notice has been received. Um, you know, it immediately goes live at that point. And, um, our project manager kind of assesses maybe he's been in the property recently or something. He kind of assigns a date of availability. And what that means is it's going to be usually about a week or 10 days after the person moves out. He allows himself a window to get the property turned. And it really limits the days vacant, which really maximizes our rent potential. And also it gives us a deadline to strive for. If you don't have somebody trying to push themselves into moving, um, into a property, uh, it's not gonna, you know, like you can be like, Oh, you'll even let your contractor take an extra couple of weeks or so.

[00:19:21] And so this has been really good for us to sort of establish the system and keep it going so that we can pre-leased. Um.

[00:19:31] Bill: I would make another plug here. Uh, there's a person named Jeffrey Lord. He runs mr landlord and he's done so at least three decades, I think. And if there's anybody who is all about pre-leasing and all about not losing the day of rent, he has got this thing figured out.

[00:19:50] Uh, it's very impressive. And I would, I'd encourage you to look his website up and he's got lots of, uh, lots of posts, lots of articles you can buy into his bootcamp, but mrlandlord.com well, where

[00:20:04] Andrew: his name is Jeffrey Taylor, by the way,

[00:20:08] Bill: I'm sorry, Jeffrey Taylor, who was Jeffrey Lord?

[00:20:09] Andrew: Jeffrey Landlord? I don't know.

[00:20:13] Amanda: Once you get your marketing out there and you get your qualified applicants in, um, And actually you would do this beforehand. You need to establish some guidelines for your screening that you're going to stick to. And this is for two reasons, uh, one does to protect yourself, but also so that you aren't violating fair housing laws. You need to treat everybody the same. Everybody has to meet the same criteria. To lease your properties or else you could say yourself up for a lawsuit down the line. Um, you also need to make sure that you're following, um, local and federal guidelines with what those screening requirements can be. Um. You know, Oregon has, Oregon seems to be pretty friendly towards tenants right now just because we have a big, um, I think homeless population is driving this. And so the state of Oregon is kind of making some guidelines about what our screening is, including like, uh, you know, criminal requirements and who you have to let in your properties and that sort of thing. You need to make sure that, you know, that information, um, because you can make. All your own rules that you want, but if you're violating state and federal regulations, you're setting yourself up for a lawsuit down the line.

[00:21:26] Um, so, you know, we've usually, I think we were at, he to make a three and a half times the rent in order to be our resident, you know, we have pet guidelines that you have to meet. Um, one of our biggest things is, uh, previous rental experience. You know, that's, that's a huge indicator of how people are going to treat your properties or pay their rent to you is based on what they've previously done. And so you know that that can be part of your screening criteria, and you want to make sure that you're. Following that up, reaching out to past landlords. Um, you know, don't let that get away from you. Um, we actually use a third party service to do this for us. You know, are the applications come in and then, um, we push it out to a third party screening. So that they're contacting those landlords for us and running the background checks and verifying the income because that kind of, that kind of process is pretty time consuming. And if you have, um, you know, your staff are trying to show properties and market properties and run property management, they might not have time to chase down past work experience or collect their W2's and their time cards or, you know, I'm sorry, their wage stubs, all of that to make sure that they're verifiable and then really stick to your guns.

[00:22:51] So once you start having your leads coming in, um, you know, you're going to, you gotta get down to business and start screening applicants and you want to, from the beginning, set yourself up with some strict guidelines and follow them. Um, in our experience, it has, uh, worked better for us to leave properties empty than it does for us to put the wrong people into our properties.

[00:23:15] Um. General rule we follow is two years of good rental history, meaning we reach out to landlords and verify that they paid their rent and paid it on time. Um, kept up with their place, didn't damage at, move out, and then three and a half times the rent for an income. And that can be, um, I mean, that can be debatable on your area or what's, you know, what works well for you. You need to keep in mind that you also need to follow, uh, state and local laws with regarding what is allowable and what, you know, what meets criteria. And then what you need to do is make sure that you apply your screening criteria across the board. Everybody needs to be able to, everyone has to meet the same set of criteria. And you can't make allowances for people who don't meet those criteria, or you could be subject to discrimination suits down the line.

[00:24:09] Andrew: And that's even a good line to use to like, you know, if somebody is like, Oh, can you maybe take a break for me? Oh, I'm really close, so I promise I can do it, or I got the money, or whatever. Um, you can say like, literally like these are our rules. It's, it's, we're not even allowed to make an exception.

[00:24:24] Amanda: And another screening guideline, although, you know, again, check your state and local laws, but you know, we don't allow a recent evictions. Um, I think the state of Oregon is going to make us allow some of that, but that hasn't gone into effect yet. And you know, our exp, I mean, I think our guideline right now is within 10 years. And our thought with that is there's a lot of ways to avoid getting evicted. You can move out before the eviction takes place, but if you're willing to see it through to where you're getting removed by the court system once you're likely going to do it again. And so it's just not something that we're wanting to allow.

[00:25:01] We use a third party, uh, to process a lot of our applications, um, to verify wages. And, uh. Reach out to past landlords, do that sort of thing. If you're doing it for yourself, um, you need to set up a system for it because it's a lot of reaching out and waiting for followup, which is why we choose to use a third party to do it for us. Definitely cost money, but it makes the process a whole lot smoother. And you know, you're going to need to be reaching out to people along the way and letting them know the process, you know, like where they are in the process so that you're not processing. 50 people for the same place. You know, you kind of want to prescreen them and make sure that they fit your fit within your screening criteria. And then, um, you know, that third parties is going to verify that all of that's legitimate. And they were telling you the truth.

[00:25:53] we, uh, previously did, uh. Make some allowances, um, specifically in Kansas city, we had a really strong, uh, rental market in Oregon. And so we took our, a little bit of our relaxed policies and applied it to Kansas city, and we first started getting out there in 2011. And what that did was really tanked us because, um, you know, we were relying on our Oregon processes to save us in Missouri. And the laws were different and evictions took longer and all of that. And so what we really learned along the way is set your criteria and then just stick to them. Don't just two months of having a vacant property. If you can't find a good quality resident could save you thousands of dollars, whatever it costs you, it will be worth it.

[00:26:39] Ryan: Yeah, with us, we don't even let people get into the make an exception conversations for me. Um, you know, we just like, they even start to like, well, no, but you know, Hey, unfortunately, legally we have to stick to these guidelines for everyone to avoid lawsuits where people start to get into trouble as they start to like listen to the story, and it's like, Oh, she's a single mom of four kids, man, her ex husband was an awful guy. And then it's like, well. You, you, you get into this like, you know, you, you don't even want to get down kind of that road or that path. We had a property that, out of everything we own is probably, maybe the only one that I regret buying. Um, we only paid like 35 grand. It pulls in like 1200 a month, so I don't have any complaints on the cashflow side, but it literally took us like three, four months to get somebody in there that made sense. I mean, we did dozens and dozens of showings and process applications, and it's like we had somebody that was like, Aw, I can't believe you discriminate against drug dealers. Well, of course I discriminate against drug dealers. Right? And you know, um. Putting somebody in one of your rental properties is kind of like making a hire, you're not just looking for like a beating heart. You're looking for somebody that meets your criteria. Um, you know, they. They're going to be a good fit long term. Not just like, you know, well, they've, they've got the first month's rent and cash, so let's go. Right. Um, you know, I, I love when complexes have those like 400 bucks moves in. It's like, ah, stuff with, that building's probably not going super well.

[00:28:13] Amanda: Right, the only, I would say, the only allowance we would make, which I don't think is an allowance, is if you don't have the wages or you don't have the rental history. Coastal, we accept co-signers, but you know, like that's especially like if you've never been in there, you know, if you've never been in the rental market, we're going to allow that. If you have difficulties with your past rental situation, I don't think of co-signer and our situation is going to help you because we still see, Oh, well you left a balance with your old landlord. If you're willing to do that, that means you're willing to do that to us. And you know, people like the people can change, but we don't need to be the people that see that through. So we don't always have to make allowances for that.

[00:28:56] So we're just going to wrap this episode up. I did want to turn it over to you a little bit, Ryan, cause I know that you guys follow a different sort of a screening procedure than we're doing.

[00:29:07] Ryan: Yeah. So this is, uh, this is part of the fun of running a podcast. Um, even as one of the hosts, I'm learning new things. Um, we, we follow kind of the same written procedures and policies, but we do all of our, um, residents screening in house falling up on job applications.  Contacting previous landlords, all that good stuff. Um, so this is kind of new for me of like, wait a minute, we can get this piece off of our plate, because as Amanda alluded to, it's not something that's fun. And, uh, I think I'm also now hearing that Andrew, you guys use a company for yours as well.

[00:29:42] Andrew: Yeah, we use red star, I believe, and they do most of the screening stuff themselves. And I, we, we prefer to have an out of our own staff's hands just so they can be tempted to kind of push it in one direction or the other. Um, based on whether they liked the person or not. We want to make it as objective as possible. That's why we prefer to do it. Um, outsource it.

[00:30:01] Ryan: So it sounds like in the beginning, um, which I probably should have pushed this off our plates sooner. Um, but it sounds like in the beginning this is something that's important to kind of have a handle on. I think the only other thing I would touch on is make sure you understand legally how to decline an applicant. Right? Um, I think that's where you kind of run the risk of potentially getting into trouble is saying something you shouldn't say of why you're not losing to them of like, well, we don't want kids in here.

[00:30:30] Amanda: Specifically, if you collect an application fee, it's just like if you get to get declined for a credit card, you know, you have to, you have to. Decline them in writing and site why, and it has to be something that tracks back to your written criteria for screening so that you're following the letter of the law. That's very important.

[00:30:49] Ryan: That's the cover your rear piece of this episode.

[00:30:52] Amanda: Right.

[00:30:53] Andrew: Okay. I think we're going to wrap up here. Uh, obviously property management. Is not the most sexy part of real estate investment. It is one of the things that gets overlooked the most, but it is essential. It's something that you can't succeed at in the buy and hold model without doing and doing very well, particularly the screening part. Cause bad residents can make your, uh, make your cashflow just disappear faster than just about anything. Um, anyways, please check us out the good stewards.com. Uh, we very much thank you for joining us and we will be back again next week. Thank you.