What to Look for in a Tenant Placement Service

By Matthew Whitaker, founder of Evernest.

Quick disclaimer: this is general guidance, not legal advice. Fair housing rules, lease requirements, and eviction procedures vary by state, so confirm the specifics with a local attorney. Fees and terms vary by company, so always get them in writing.

You own a rental, and you're fine managing it yourself. You can handle a leaky faucet, and you don't mind collecting rent. What you don't want to do is spend three weekends showing the house to strangers, sort through a stack of applications, and hope you pick the right person. That's what tenant placement is for: someone else finds the tenant, screens them, and hands you a signed lease. Then you take it from there. I'm Matthew Whitaker, founder of Evernest, and I wrote the book How to Rent Your Home. Here's what a tenant placement service should include, what it should cost, what it doesn't cover, and how to tell whether it's the right fit for you.

The short version

The short version: A tenant placement service handles the hardest few weeks of being a landlord: pricing your home, marketing it, showing it, screening applicants, and getting a lease signed. You pay once, usually when the lease is signed, and then the property is yours to run. Most companies charge about one month's rent. It's a good fit if you live nearby, have repair people lined up, and want to stay hands-on. It's a poor fit if you want to stop getting calls altogether.

What tenant placement is, and what it's called

Tenant placement goes by a few names. You'll hear leasing only, tenant procurement, or lease only. They all mean the same thing: you hire a company for one job, getting a qualified tenant into your home on a signed lease. You pay once, usually when the lease is signed, and after move-in, the property is yours to run.

That's different from full property management, where the company leases the home and then keeps running it every month after that: rent collection, maintenance, inspections, renewals, all of it, for a monthly fee. Tenant placement is the middle ground. You hand off the most intense few weeks, and the most important decision in the whole process, finding a tenant, and then you keep the rest.

What a good tenant placement service includes

Six things should be on the list.

Pricing. They should tell you what your home will rent for based on real, comparable rentals near you. This matters more than most owners think. In our own data, the first week a home is listed pulls in more than twice the interest of any other week. If the price is too high and nobody bites that first week, you usually end up cutting the price anyway, and the home sits a lot longer. Getting the price right on day one is most of the game.
Marketing. Good photos, a clear listing, and getting that listing onto the big rental sites where tenants actually search.
Showings. Somebody has to get prospective tenants inside the house. A lot of companies, including us in most of our markets, now use self-showings: the tenant verifies their identity and gets a one-time code to tour the home during set hours. It's faster for the tenant, and you're not driving across town for someone who doesn't show up. We've found that homes lease much faster on self-showing than when we use an agent.
Screening. This is the big one. A real screening process checks identity, income, credit, and rental history, plus background checks where the law allows, and it applies the same written standard to every single applicant. That consistency is how you stay on the right side of fair housing law, and it keeps you from deciding on gut feel.
The lease. You should get a lease written for your state and signed by everyone on it before anybody gets keys.
The move-in condition report. This is the document with photos that records what the home looked like on day one. When the tenant moves out and you need to hold back part of the deposit, that report is your evidence. Make sure somebody does it, and make sure you get a copy.

I care a lot about the screening step, and here's why. My mom owned a rental and managed it herself. She had a tenant bounce a move-in check and never pay a penny while living in the home. I had to work through that eviction with her, and it cost her tens of thousands of dollars. That experience is a big part of why Evernest exists. In my experience, most of the really bad outcomes in this business start with one screening decision.

What tenant placement costs

Most companies charge a full month's rent. Some charge a flat fee. Ours is normally one month's rent, and we run specials from time to time.

[TODO: confirm the current Evernest placement fee before publishing. The video says one month's rent, but other pages on evernest.co list different placement pricing. Also add the link to the current offer.]

What you're still responsible for after the lease is signed

Let's be clear about what you're not getting. Once the lease is signed, the tenant is yours. That means collecting rent every month and following up when it's late. It means taking the maintenance calls, including the ones that come in on nights and weekends. It means handling the renewal, the rent increase conversation, and eventually the move-out and the security deposit. And if the tenant stops paying rent, you're the one who files.

None of that is part of tenant placement. I'm not saying that to scare you off. Plenty of owners handle it all very well. You just want to go in knowing exactly where the handoff happens.

Questions to ask before you sign

When you compare companies, don't stop at the number. Ask a few questions:

What exactly is included? Pricing, photos, showings, screening, the lease, and the move-in report.
What are your screening standards, and are they in writing?
How long does it usually take to lease a home like mine?
What happens if the tenant breaks the lease or has to be evicted in the first few months? Some companies will re-lease the home at no charge. Some won't. You want to know that before you sign.

Who tenant placement is a good fit for

It works well if you live near the property or have somebody reliable close by. It's usually a good fit if you have a handyman or plumber you trust, you have the time to answer calls and stay on top of rent, and you're comfortable with the basics of landlord-tenant law in your state.

It's usually not the right fit if you live out of state, if you don't have anybody local to handle repairs, or if you're a first-time landlord and the whole thing makes you a little nervous. It's also a poor fit if what you really want is to stop getting calls altogether. That would make you a candidate for full-service management.

The owners who call us about placement fall into two buckets. The first is worried about the cost of full-service management. Maybe they just moved out of their home and into a new one down the street, and they see the old home as a way to build wealth or supplement income. A monthly management fee takes away from some of that cash flow. The second is owners who have managed their homes for a long time and are tired of the leasing process. Both are perfectly good reasons to use it, and if a year from now you decide you want to hand off the rest, you certainly can.

Quick recap

Tenant placement covers the hardest few weeks: pricing, marketing, showings, screening, and the lease.
You pay once, usually when the lease is signed, and most companies charge about one month's rent.
After the lease is signed, the tenant is yours: rent, repairs, renewals, move-out, and filing if rent stops.
Ask what's included, whether screening standards are in writing, how fast they lease, and what happens if the tenant leaves early.
It fits owners who live nearby, have repair people lined up, and want to stay hands-on.

Frequently asked questions

What is tenant placement?Tenant placement is a service where a company finds, screens, and places a tenant in your rental on a signed lease, for a one-time fee, usually paid when the lease is signed. After move-in, you run the property yourself. It's also called leasing only or tenant procurement.

What should a tenant placement service include?Pricing based on comparable rentals near you, marketing on the major rental sites, showings, screening of identity, income, credit, and rental history, a lease written for your state signed before keys are handed over, and a move-in condition report with photos that you receive a copy of.

How much does tenant placement cost?Most companies charge a full month's rent, while some charge a flat fee. Evernest's fee is normally one month's rent, with specials from time to time. Always ask exactly what's included before you compare prices.

What does tenant placement not cover?Everything after the lease is signed: collecting rent, following up on late payments, maintenance calls including nights and weekends, renewals and rent increases, the move-out and security deposit, and filing for eviction if the tenant stops paying. Those stay with the owner.

Who is tenant placement a good fit for?Owners who live near the property or have someone reliable nearby, have a trusted handyman or plumber, have time to answer calls and stay on top of rent, and understand the basics of landlord-tenant law in their state. It's usually a poor fit for out-of-state owners or nervous first-time landlords.

What should I ask a tenant placement company before hiring them?Ask what exactly is included, whether their screening standards are in writing, how long they usually take to lease a home like yours, and what happens if the tenant breaks the lease or is evicted in the first few months, since some companies will re-lease at no charge and others won't.

Why does the screening standard need to be in writing?A written standard applied the same way to every applicant keeps you on the right side of fair housing law and keeps decisions from resting on gut feel. Most of the really bad outcomes in this business start with one screening decision, which is why the standard matters so much.

Where to go from here

If you're still figuring out whether to rent your home at all, start with my book, How to Rent Your Home. It's free, and it walks you through the whole thing, from deciding whether to rent all the way through the move-out.

Get the free PDF of How to Rent Your Home

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