March Madness: How to Pick a Great Bracket & Great Rental Tenants

Everybody loves March Madness.  Even property managers!  Chances are the only repair calls will go to the cable television companies if their television screens start to flicker.

 

But now the hard part starts; trying to predict who will win each game of the NCAA tournament.  Picking a perfect bracket is tough; no one did it last year after millions of entries.  The odds are seriously stacked against getting them all right.  And, inexplicably, it’s even tougher if you’re a serious college basketball fan!  The men’s college basketball fanatics, who watch all the games year round and know that Duke should absolutely kill Mercer, wind up picking the wrong team to win.  Meanwhile, the clueless non-fans who turn on Mercer Street to go to work everyday and choose Mercer to win, wind up getting the pick right.  Go figure!

 

To make good picks, fans rely on statistics and past performance versus other opponents.  And then they look at other, intangible signs.  Are their players healthy?  Are they experienced or are the teams filled with unproven freshmen who might wilt in the big game?  How did they do against big teams during the year?  How about fast teams that like to run?  How well are they playing now?

 

Much like fans, property managers are tasked to pick the best tenants when they get many applications for the same rental property.  Some, like Kentucky this year, seem to fall in the “no-brainer” category.  Great credit scores, great landlord history, make plenty of money to afford the rent, and stay away from trouble with the law.  They don’t seem to have any weaknesses and look to be a shoo-in for application approval.

 

But what about if Kentucky’s starting center gets hurt and can’t play?  Or in the rental game, you read about a company starting layoffs in the department where your “no-brainer” tenant has worked for the last 10 years.  Is that a cause for concern?  Yes, but how much so?

 

That’s a judgment call.  Kentucky has enough other talent to steamroll most teams on most nights even without their center.  And the prospective tenant could be just fine as she has plenty of cash reserves and a robust Rolodex where she could get hired anywhere in town with a quick phone call.  Or she might be in real trouble as she was living paycheck-to-paycheck and hasn’t updated her resume since college.

 

The other prospective tenants aren’t as polished (lower credit scores and income), but have dual incomes in disparate industries.  Would they be better bets?  How does a property manager know who to give the approval to?

 

There is no right answer.  Much like picking a bracket, some of it comes down to raw data and past landlord performance.  But some of it comes down to the experience of selecting tenants for many years.  I wish I had it down to a perfect science and could put it in a training manual (that I could sell for millions of dollars…).  But no matter how good a property manager is, no one can get them right all the time.  As my 3^rd grade teacher said emphatically, “that’s why pencils have erasers!”

 

So, what to do?  The right answer is closer to reviewing the raw data thoroughly and then looking for other signs.  Do they have a pattern of paying people on time?  Did their past landlords have good things to say?  Do they make enough money to afford the property with some excess funds still available if their car breaks down or they face unemployment?  Have they recently attempted to hurt anyone seriously (I’m half-kidding on this one)?

 

As for other signs… how did they sound on the phone?  Did they get the application materials back to us in a timely manner?  Are they pleasant to talk to?  Were they forthcoming and truthful with everything asked in their application?  Did they return our calls in a timely fashion?  Were they evasive in any way?  There’s a certain feel involved.

 

The other signs are tough to quantify.  But that is when picking good tenants turns from a science into an art form.  And that’s when the experienced know in their gut that Lehigh has a chance to take down Duke, even though they are a huge underdog.  And that North Carolina, despite an up-and-down season, seems to be peaking and can take it all this year. 

 

Picking tenants and the NCAA brackets isn’t as easy as picking all the favorites.  Experience counts.

 

Good luck with both and enjoy the tournament!                

 

Brett Furniss is the President & Owner of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!