5 Step Guide: Closing the Deal with Tenants
One small step for dealing your land, one giant leap for landing a deal
After marketing your home, conducting credit and background checks, and narrowing down the tenant pool, you’re probably drained. “Owning rental property is a lot of work,” you might think. “Maybe I should just sell it instead.”
The good news: You’re almost there! There’s only one more step you have to take before you can start reaping that sweet, sweet cash flow.
The bad news: Just kidding. There’s no bad news.
Depending on who you ask, closing the deal is the most difficult part of the rental process. But it shouldn’t be. Think about it: the prospective tenant is there because they want to rent the home. Otherwise, they wouldn’t have gone through the entire process up until now. All you have to do is give them that little push over the edge. The deal is yours to lose.
How do you give them that push?
0. Make the house presentable
I listed this as step 0 because it shouldn’t be a step so much as common sense. Make your home as welcoming as possible, especially if your prospective tenant hasn’t toured it yet. Organization is the biggest thing, but other subtle touches such as small scented candles and some basic wall decor will do miracles for your house’s presentability.
You don’t need to drop a ton of money on an interior designer or a professional stager. Chances are, you’ve lived in a house before, so you can generally tell what looks good and what doesn’t. Neatness and organization are key here. For a more in-depth look, check out Good Buy or Goodbye? 4 Infographics to Help Better Market Your Home.
1. Make yourself presentable
While it should come as no surprise that the home has to look good, don’t forget that you have to look good as well. I don’t mean you have to put on your best suit (in fact, you probably shouldn’t — it might come off as desperate), but you need to dress somewhat nicely and comfortably. As with any sales pitch, the best thing you can wear is a smile!
Making yourself presentable extends far beyond your physical appearance. Punctuality, body language and general warmth play a huge role in closing a deal. Ideally, your tenants are going to live in your home for a long time. They want someone they can trust, which leads to our next point.
2. Start building a relationship with your tenants now
If you start getting to know your tenants after they’ve been living in your house for awhile, chances are it’s already too late. If you don’t communicate with your tenants from the get-go, they’re less likely to come to you with their problems later on. This can result in problems down the road, such as maintenance requests going unreported for extended periods of time. Plus, the more communicative you are as a landlord, the more likely the tenant is to trust you and stay with you, which means avoiding the hassle of finding a new tenant.
Many potential tenants will appear a bit nervous during interviews or showings, especially if this is their first time renting a home. This is completely normal. Making casual conversation can do wonders in terms of making them feel more comfortable, and first impressions go a long way.
3. Tailor your pitch
As you get to know your tenant, you can start pointing out features that they’ll appreciate. For instance, if you casually drop golf in the conversation and they mention that they’re a golfer, you can bring up that there are a number of courses nearby.
One way to gauge their interests is by opening yourself up to questions repeatedly. When a prospective tenant asks about a specific feature, they’re basically telling you what they want in a house. For instance, if they ask about the nearby schools, you can tell them all about how great they are and, if you have kids, how much they loved it. Some landlords prepare for these questions beforehand by researching and memorizing statistics on the local schools, parks, employers, and anything else that may come up in conversation. This works twofold: not only does it work as a selling point for the house, but it also demonstrates that you know the area well and builds trust between you and your tenant.
This goes without saying, but don’t lie in your sales pitch. If there really aren’t many parks or trails in the vicinity, don’t make the house out to be in a prime location for hiking. Sometimes, a house may not be ideal for an applicant. As a landlord, you should realize that and look for a better suited tenant instead of trying to fit a square peg in a round hole.
4. Ask open-ended questions
People love talking about themselves. Asking a prospective tenant simple questions like “What’s your favorite feature?” or “Why do you like this area in particular?” will open up new lines of conversation, strengthening the bond between the two of you, but it will also serve a more important purpose.
The more the applicant focuses on the positive features of the house, the more they will psych themselves into wanting it. Think of a job interview: The interviewer asks why the interviewee wants to work at a company, and the interviewee will respond with a number of reasons, triggering a subconscious response of Wow, I really do want to work here. Asking prospective tenants the same question will elicit the same response, assuming they’ve done their due diligence.
5. Let the house do the talking
If the tenant-house match really is meant to be, the house will sell itself. Focus on the facts. Believe it or not, “We just installed this seventy-two inch walk-in Whirlpool bathtub with eight water jets” comes off as more genuine than, “You guys are sure to love this brand new, state-of-the-art bathtub with tons of features!” Subtly mentioning that you are showing the house to other applicants indicates high demand; telling prospective tenants they have to get the house before it’s gone will sound desperate.
Remember: the tenants want to rent the house. Breathing down their neck and constantly pressuring them will only push them away, as they may think you have something to hide. Let them find out for themselves how awesome the house is. It takes practice, but finding the balance between salesperson and person will take you a long way in closing deals.
Next Steps
Much like a job interview, following up with an applicant after a showing can do wonders if executed the right way. A (very) short email thanking them for their time and inviting additional questions should be done within 24 hours of the showing. Again, refrain from being pushy, but make sure you don’t lose them in case they happen to be looking at other houses as well.
Ultimately, closing a deal requires a good deal of nuance and people skills, but becomes easier with practice. What techniques do you use when closing a deal with a tenant? Let us know in the comments below, and be sure to check out our website!
