The most stressful decision that landlords have to make is who do we want living in our buildings?

For anyone that has ever worked in property management, we can tell you that the way people appear on paper is not always the way they behave in their home. But more often than not, it is a pretty accurate indication.

Approval application forms are supposed to ask the tough questions. They are supposed to help you weed out the less desirables. But what happens when you have young applicants without the prerequisite employment length, rental history, or established credit; yet you are motivated to lease to them anyway. My advice is to load up on co-signers.

A co-signer is typically a parent of an applicant (though it may be anyone) who is willing to vouch for the applicant… financially. For some odd reason, a few management companies do not condone co-signers. I’ve never fully understood this. A co-signer is accepted ONLY when they have perfect credit, great income, and great references. So I think having co-signers attached to your rental units is a tremendous way to carry a little extra layer of insurance against what we are all really afraid of: ugly evictions. So screen your co-signers properly, allow them on your sites, and remember that they will be the ones mopping up all the pieces to whatever money problems their applicants are attached to. Not you.

Many property managers debate how to determine the correct amount to charge for security deposits. On one hand, it is important to collect a large sum in case there are problems during the tenancy. With a large security deposit, the apartment will likely be taken care of amidst large problems. On the other hand, if you ask for a high security deposit, you are narrowing the pool of potential renters. This can cause your vacancy to sit. That’s no good. So what is the right approach?

The answer to this question is actually very simple. It is whatever the market will bear. If you can regularly achieve a high security deposit, then continue to ask for high deposits. The market will correct this mistake if you overcharge. You simply won’t have the traffic you need to fill the vacancies as they come due. So this question can most regularly be answered naturally.

However, as markets rise, security deposits should also rise. The higher the monthly rate, the higher risk there is if the tenant defaults. So make sure you are regularly reviewing your security deposit amounts in conjunction with the rent. At Castle Management, we have a bevy of available properties to discern market data from, and we can help make sure that your deposits are accurately priced. So don’t get caught behind the market. Think about hiring a professional property management firm, and consider Castle when you do.

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