Part Two: Identifying the sources of good referrals for tenants
This is part two in a four part series on referrals. If you haven’t already, read part one where I explain the importance and benefits of referrals go here to read it. Here, I’ll cover the importance of identifying the sources of good referrals and how to do so.
The importance of good referrals
So, you’ve read part one and know the importance of getting referrals from your tenants.
But wait, don’t immediately descend upon your current tenants, bribing and cajoling them to provide you with referrals — let’s think about the type of referrals we want first.
The tenant that provides the referral is likely to share many characteristics with the person they are referring. If you want to breed a calm dog, you probably wouldn’t pick a dachshund and a terrier as the parents. The person you want a referral from should be the type of tenant that you’re looking for.
People surround themselves with people who are similar and share similar interests. If someone is in college, they spend almost all of their time with people in their classes and the clubs or fraternities/sororities they belong to. If they are studious, they probably also surround themselves with other studious classmates in their discipline. Conversely, if they like to party, then the people they hang out with probably do as well.
Now, between those two choices, who would you like to encourage a referral from when seeking a tenant? People remain as predictable as they get older too. Professionals generally surround themselves with other professionals, usually within the same or complementary fields. Higher wage earners tend to interact with other high wage earners.
I think by now you see the pattern and the importance of sourcing referrals from the type of tenant you would like to have.
5 characteristics of good referrals
What sort of characteristics should you look for in the source of a tenant referral? That depends on what you value most as a landlord, but here are some suggestions that shouldn’t be controversial.
Unless you have a large spread in the value of the units you offer, the one is probably self-selecting. If someone can afford one of your units, they will likely refer someone who has a similar ability to pay. But if you do different levels of affordability across your properties, this may be something to consider.
As a landlord, you are looking for on-time payment of rent. People who are prompt tend to get easily annoyed at those who aren’t. So even if your prompt tenant recommends your property to a friend that isn’t, they will probably warn him or her about the strictness of your late rent policy. Your tenant may even admit it to you if you ask them whether the person they’re referring is reliably prompt.
People who are honest value honesty in others. If you have a tenant that admits to you when they flush something they shouldn’t have, or damages something easily blamed on normal wear-and-tear, you’re definitely going to want to see if they know of others like them that are looking for a place to rent.
While similar, this differs from honesty in that the responsible tenant will not bother you unless necessary, and you won’t have to bother them either. You can count on the responsible tenant to follow through if you require him or her to keep up the yard or do other reoccurring maintenance on the property. They will also probably warn you before a small, easily ignored problem turns into a big problem.
Respect is huge and covers not only their attitude towards the property, but also towards their neighbors and yourself. With the respectful tenant you don’t need to worry about the property being trashed or getting calls from other tenants about noise late at night. This is another characteristic where opposites tend to almost never mix.
Undoubtedly, there are many more characteristic than the ones I’ve listed which you might want to encourage in future tenants.
Take a minute to think about them and which of your current tenants seem to exhibit them. Conversely, you can think about your best tenants and identify the characteristics they display that you value so highly. You can also think about some of the negative characteristics you’d like to avoid. However, I wouldn’t focus too much on those. Everyone has faults, and you don’t want to turn away an otherwise perfect candidate because you could only focus on one thing that’s found on a list of negative traits you came up with. My suggestion would be to limit yourself to maybe one or two pet peeves you just can’t live with and from there only focus on the positive.
By now you should have been able to identify not only the characteristics you most desire in a tenant, but also which of your tenants have those characteristics. Congratulations, those are the tenants you want to receive referrals from. Be sure to catch the final part in this series, where I show you how to best solicit and encourage referrals from those tenants.