The Process Of Running A Rental Property
By JD Esajian on August 4, 2014
The process of running your rental property should be a seamless transition of tenants coming in and tenants going out. Unfortunately, during the nine months that your tenants live in your property, there are going to be ups, downs and issues along the way. The best way to prevent or mitigate these issues is by having defined systems in place along with thorough documentation of the move in condition. As much as you would like to think that everything will go smoothly, the fact is that your property is occupied by real people who can’t live on eggshells. If you spend the time with your tenants to review expectations and consequences, the process of running a rental property will be much easier.
Once you get to the point that your tenants are going to move in, they will have seen the place and should have some idea of what to expect. After you review their application and commit to renting to them, you need to set a firm date to receive security funds and go over the lease. People are busy with work, kids and everything else but if they keep cancelling on you it could be a sign that they may not have the money in place. If this is a problem now, it will only get worse once they move in and have additional expenses. Assuming that money is not an issue, you need to spend the time and go over the lease with your tenant. You need to make it clear which utilities you will be covering and which are the tenant’s responsibility. You also need to point out any parking issues, weather related procedures and late rent fees. This may be tiresome going over everything, but it is far better than dealing with an issue midway through the lease.
After you go over the lease, it is a good idea to walk the house with your tenants and show them how things work and review the condition. During this initial walk through you should bring a camera and snap pictures of any potential damage spots. If there is an issue with a closet door or bathroom sink you should make a note of that and share your pictures and information with your tenants shortly after. In addition to the pictures you should describe exactly where they are located in each room. Too many landlords will omit this step and when it is time to move out they will either have an issue with their tenant or try to hold the security deposit to cover any damage. There are times when this can lead to a lengthy and unnecessary battle over minimal damage. This walkthrough should be done with your tenant present every time there is a new lease. If you don’t you are asking for trouble.
Turnover will happen in every property with even the best tenants. Nobody stays in a rental house forever. To ease the process you should give your tenants ample time and ample warning especially if you are on a month to month lease. It is a courtesy to give your tenant a day or two notice if you are going to show the property. At a minimum you should tell them that you may have showings at any time over the next few weeks so they are not caught off guard. Just because your tenant is moving out doesn’t mean you should forget about them. If you are respectful of their living situation they will be much more likely to have the place clean and orderly when you show it. Little things like this can go a long way to finding a new tenant.
When you tenant is ready to move out you need to stress to them that you need to have the place clean and in the condition they found it. Here is where you need to keep in mind that if your property is older it will take less wear and tear to cause damage. Even the cleanest tenants will not have the place as clean as you need it to be for new tenants. What you are looking for is any major damage or anything that you will have to pay out of pocket for to replace or restore. If you bought cheap paint for the halls or bedrooms you can’t get too mad if there are fingerprints and dirt stains on the walls. You want to be reasonable with your tenants and not try to hold every dime you could for a couple of dings on the couches or walls. Tenants talk and if you try to squeeze every dime of security you could face some backlash on social media or other outlets. If you are fair with your tenants you never know who they will recommend the property to down the road.
In the rush of trying to get a new tenant in and out it is easy to overlook the basic steps. By taking the time to go over the lease and document the condition you will save yourself time and possibly money down the road. Little things like taking a camera with you should be done automatically on every property. If you fail to do these basic things they will catch up with you in the future. It is little things like these that make the difference between a good rental experience and one filled with angst.