Mike Explains: Should a Landlord Meet Prospective Tenants?

Imagine if you will, you hired a professional property management company to manage your property. Your management company has its screening process. That’s part of why you hired them. However, before you sign off on the lease, you want to do your extra due diligence and meet the tenants yourself in person just to be sure. After all, you are a good judge of character. They will be living in the property you own, and you will be the one ultimately taking on the credit risk. Is this a good idea? I’ll explain.

Should you meet prospective tenants in person?

To be clear, it is a very bad idea for a rental property owner to meet prospective tenants. This is true whether it is the prospective tenant’s idea or the property owner’s. This is a large part of why you want to have a property manager. Here are seven reasons why it is a bad idea for a property owner to meet prospective tenants.

  1. Fair Housing Nightmare – This exposes both the rental property owner and the property manager to unnecessary additional Fair Housing Risk. Fair Housing laws and exposure to them are real. Your well-meaning intentions will not protect you in a court of law. Arranging a meeting between the property owner and prospective tenant, especially after a manager has already shown the property and screened the tenant only increases this risk.
  2. Clouds Your Decision – There is no better information than the relevant data. Taking in subjective emotional information only confuses. Looking at objective information like credit scores, verifiable income, financial reserves, and criminal records is significantly more reliable than a property owner’s intuition. It does not matter how experienced you are, credit scores and income ratios are more reliable than your gut.
  3. Scares Away Quality Applicants – Today’s tenants don’t want overly intrusive landlords. Unusually, a tenant would be required to have an additional appointment with the owner of a rental property to be “approved”. This additional step will likely be interpreted as a red flag causing quality prospects to move on.
  4. Leaves Door Open for Risky Applicants – The applicants with low credit scores and long explanations are the ones who ask to speak with the property owners directly. They can be very persistent and convincing. If you do drop your standards for them, you not only take on the extra credit risk, but you have also added fair housing risk from any other objectively, better-qualified tenants who you may have declined.
  5. Hard to Justify Denials - Professional management companies have sophisticated screening processes that comply with current industry standards. If an applicant already objectively qualifies for a property, what additional information could you be trying to achieve by meeting with the applicant? Are you looking for race, familial status, or just to see if you “like” them or not? At that point, it is hard to justify what you were looking for and why someone was denied.
  6. Upsets Declined Applicants – As mentioned previously, most management companies use an industry standards screening process that requires time, effort, and application fees to be collected from each applicant. If they pass the first step, and then they are required to interview the property owner, they will be super upset and take it personally if they are turned down. Nobody wants that.
  7. Defeats Purpose of Management Company – One of the main reasons why you have a management company is to create a healthy barrier between you and your tenants. This helps set the tone, keeping it less personal and more professional. Remember, your rental property is a business. Additionally, tenants are less likely to try to contact you directly for issues that you would prefer your Property Manager handle. Keeping matters professional will be of benefit throughout the entire tenancy relationship.

Bottom Line

It is a bad idea for property owners to meet with prospective tenants. Let your property manager be the one to interface with prospective tenants. When the property owner meets with prospective tenants, it is a fair housing nightmare, clouds your decision, scares away quality applicants, leaves the door open for risky applicants, it hard to justify denials, upsets declined applicants, and defeats the purpose of having a property manager.

If you have any further questions about this or any other real estate-related topics, please reach out to the Mike Dunfee Group. Based out of Long Beach serving much of Los Angeles and Orange County areas we are happy to be your resource and are here to help.

Dunfee Real Estate Services
DRE # 02026232

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