As a real estate professional, you may work with buyers, sellers, tenants, and landlords. You must learn the importance of prequalifying landlords who might be your client. Who might be your client? Several problems can come up if you haven’t ensured that the landlord is someone who can make a successful lease. However, by asking the right questions, you can start your relationship with the landlord, knowing the challenges and opportunities ahead.
What Are the Right Questions?
So, what are these “right questions” you need to ask? When working with real estate landlords, you need to focus on your first questions to find out what lies ahead if you accept this landlord as your client.
Here are some of the most important questions you need to ask:
- How much equity do you have?
When you ask about equity, you’re trying to determine the landlord’s financial position regarding this property. You need to know whether they have kept up with their payments and how much they still owe on the property. Don’t take their word for it. Even if they’re being honest, their memory of the numbers involved may not be accurate. Instead, ask if you can look at their mortgage statements to find out how long they’ve owned the home and whether they are in good standing with their lender.
- How has their financial situation changed recently?
Recent changes in the landlord’s finances could make an incredible difference in how you should seek to help them. If their income has increased, you can guide them to higher-priced properties to lease. If they have recently had a downturn in income, you can suggest they downsize. And if their income has been stable, you can help them get the most out of the property they have.
- Do they want to stay in the neighborhood where they currently live?
Anyone could become dissatisfied with the neighborhood where they live, including landlords. If they would rather live elsewhere, you can encourage them to sell their home and move to their preferred neighborhood. Then, they can rent out the first home.
- What about remodeling?
If the landlord is unhappy with their home, you may suggest they do some remodeling. When working with tenants, you must ensure they are interested in leasing their homes. Suppose they remodel it and discover they like it so much they want to stay. Then, you have spent time and resources with nothing to show. Yes, they should improve the home to attract better tenants. However, they need to concentrate on getting the property ready to rent, not ready for them to live in it themselves.
- How do they feel about the current market?
Advising your landlord clients about the current real estate market is important. They need to know early on what to expect from the market. Will they be in an excellent position to get the rent and the terms why want? Will they struggle to find a tenant willing to pay their asking price? Is the market showing signs it will change shortly? Manage their expectations to prevent surprises later.
Key Questions to Ensure a Successful Landlord Outcome
You can’t have a successful outcome for the landlord or even yourself if the landlord or their property is not in a good position for renting. Here are the most important questions to ask – and get proof for – before you accept a landlord as your client.
- Are they motivated to lease their property?
Find out why they want to lease, how long they’ve been considering it, and how soon they need to lease it. Consider whether they currently live in the home they want to lease and how fast they want to be in another home. How motivated are they to complete this transaction? Have them rate themselves on a scale of one to ten.
- What does the landlord expect to happen?
Here again, you need to manage your client’s expectations. When working with real estate landlords, you need to find out what they think will happen, how the process will go, and how they see your part in the leasing process. Then, if they have mistaken ideas, you can gently guide them to a better understanding.
- Do they have the ability to lease the property?
It might be surprising, but you could meet with a landlord only to discover that they can’t lease. They might need more for the property than they can get from any tenant.
- What kind of personality does the landlord have?
Knowing the client’s personality before you start a real estate agent/landlord relationship is essential. In online real estate courses like Roadmap to Success: Landlords, you can learn about the DISC model of personality and how it impacts your dealings with real estate landlords.
Knowing Your Landlord Client Is the First Step to a Successful Transaction
When you first went to real estate school, you might never have envisioned working with landlords and tenants. However, if you’ve decided to go for the benefits of starting your career this way, it’s important to know what you are facing.
Know the landlord, including their expectations, abilities, and current situation. Know the property’s worth and whether it is in good standing with the mortgage lender. Once you know what you are dealing with, you can decline the client or start helping them accomplish their goals.