Landlords, Property Manager’s and Investors – hope you caught Making Unhappy Vacant Property A Happy Occupied Property-Part 1 last month here on REIClub.com’s real estate blog. To reiterate, renting an investment property can be a very stressful process. The right decision can lead to nice residual income and someone to pay for our investment. On the other hand a bad decision can lead to negative cashflow out of your own pocket. Here are the last two points on working with tenants to rent & lease your income properties:
3.) Money should not be your goal finding a great tenant should be your goal.
One of the most common and harmful mistakes you can make is taking money from the wrong tenant. Many prospective tenants will use the fact that they have the rent and the deposit and based on this alone they are the tenant for your property. The individuals will not pay for applications, will not give information on their past, and will only give you money in return for their keys to your home.
I encourage you to not take this money and always remember the tenant that will fit your criteria is a call or a couple of days away from contacting you. A good tenant knows that there are rules to follow and does not mind following a process because they have nothing to hide. However, those throwing money at you may have plenty to hide.
They maybe hiding an eviction, a horrific criminal past or flat out wants it done their way or the highway. Again, remember this is your property and your rules. So if it’s not application first then the process stops there. I know how hard it is to say no to rent and deposit in your face, but we need to protect our investment, and not doing our due diligence on a potential client is not good business.
In my experience when I took the money without protecting myself I ending up hurting myself more than helping myself. Yeah the money feels good to you now, but it makes you feel horrible when rent has not been paid in two months and you are getting repair requests at 3Am in the morning at least twice a month. Respect the process more than the fast cash this is a business relationship so finding a tenant that plays by your rules is a must.
4.) Invite your tenant into their brand new rental home with confidence.
You have done the make ready, done the due diligence of your new tenant, and collected both the deposit and first month’s rent, and now it’s time to welcome your tenant into their new home. The number one thing to do is have a genuine excitement that they are the correct choice for your home.
The second step is to have the tenants bring their copies of driver’s license and social security card and or their social security number. You want to make sure they are who they say they are, and you most likely will need this information to file an eviction or a negative report against their credit or rental history.
The third step is to have the tenants sign and understand your rental documents and lease agreements. The tenant needs to know what you expect from them as a landlord. The rules need to be signed in writing and understood before they officially move in. Tenants before they move in need to know the do’s and don’ts, know when the utilities need to be in their name, understand your maintenance procedure, and most importantly your payment agreement for rental payment.
Once the tenant knows the rules and what you expect you make sure you have copies of the keys for yourself, make sure all the keys work to each lock, hand your new tenant the keys, and forget about it until rent is due or repairs is needed to be completed on the home.
Finally, congratulate yourself on a job well done; your vacancy is now an occupied residence.
Getting you property from vacate to occupied is an art form not a science. Just understand you are going to make some mistakes along the way. However, as you move forward in your career these mistakes should decrease in their occurrences.
We should always take pride in our rental properties. We should strive to provide our tenants a great product to move into and give them the reinsurance that repairs will be completed in a timely manner.
Respect the procedures you have in place and you should be on your way to a successful income producing property.