Almost all things in life seem to flow in a cycle– leasing your rental property is no exception. The leasing lifecycle will set the pace for your business as a property investor. This predictable cycle occurs between each of your tenants. How does it work? Below we will discuss the ideal way that the lease lifecycle happens while providing you with tips and tricks that are sure to make your rental see minimal days of vacancy.
Stage #1: Vacancy
When existing tenants vacate your rental, there are a few things you have to do as you prepare to show potential tenants the property.
Ensure the Property is Still Adhering to Local Building Codes
As a landlord, it is your responsibility to maintain your rental investments and create a safe space for your tenants to live. Follow your local building codes to ensure that you aren’t missing anything. While these guidelines can vary from place to place, here a few general expectations and building codes that are probably required where you are.
Expectations for Landlords:
- Maintain common areas
- Keep all vital services functioning properly
- Supply running water and sewage
- Provide necessary trash receptacles
- Perform repairs as needed
Common Building & Safety Codes Regulate the Following:
- Toxic mold
- Lead-based paint for properties built prior to 1978
- Maximum number of tenants per unit
- Smoke and Carbon Monoxide detectors
- Adequate lighting throughout the property
- Electrical wiring
- Fire retardant paint
- Maintaining the structural integrity of the building
When you are between tenants, be sure to assess the utility situation at the property. If you are including any utilities in the rent, double check to make sure that your meters are operating correctly and that you do not have any existing leaks. Even the smallest leaks can become quite the expense. Review local ordinances to see if air conditioning is a responsibility for the landlord. Also, check the current status of high-speed internet in your area and see which companies offer services to the property. This is not a necessity; however, it can make a major difference in your tenant pool as most people are dependent on having in-home internet for a variety of reasons these days.
Trash And Sanitation
Before new tenants sign a lease, find out the current trash and sanitation schedule at the property. When is trash collected each week? What should your tenants know about routine cleaning and sanitation on site? Be sure that all of these details are stated clearly in your leasing agreement and in conversations with prospective tenants before the lease is even signed.
One of the biggest selling points for tenants is security. Double-check to make sure that your security system is working as it should before you rent the property. Are your cameras recording? Do all doors on the property close and lock easily? In common areas, do doors lock automatically? If you offer security beyond the basics, you should include that in your listing. Tenants will be drawn to your property knowing that safety and security is a priority of yours.
Keep your property looking great both inside and out. Your landscaping sets the first impression, and you want it to be a good one. Spend a little time and money to ensure that the landscaping at your rental looks nice so you can bring in more prospective tenants.
Staging Your Rental
By staging the property, you will make your place feel more inviting. It also helps tenants visualize what it will look like when they move in.
Hire A Photographer
Before you list, you should update your listing photos so that it accurately represents the condition of your property. This is also a great way to connect with local photographers and build a professional relationship. You can help each other build your businesses which is a win-win for everyone.
Stage #2: Listing And Marketing
When you have made all the necessary repairs and had your property professionally cleaned, you are ready to list! Be sure that you are following the best methods to finding a good tenant and that your set rent matches the market in your area.
A well-written listing with current photos will catch the eye of prospective tenants in your area. There are two ways that most landlords show their property: individual showings and open houses. You can choose one or do a mix of both. Some applicants may prefer a virtual tour if that is an option for you. You can use virtual showing software to get more views on your listing. The benefit to this is that you won’t have to spend as much time showing the space.
Once the applications start rolling in, you can begin reviewing each of them to determine who will be the best fit. In addition to a background check, you should take the time to become familiar with each applicant through a simple interview process, which can be done in person or on the phone. You might be beyond ready to fill the vacancy but taking the time for this step will be beneficial for you as it helps you ensure that you chose the best tenant for your space.
Some applications may not set a great impression so you might want to put them in the discard pile, however it is important that you are not discriminating against any applicant so be sure to follow the legal guidelines in your state.
Stage #3: Move-In Date And Arrangements
When you have secured a tenant, it is time to do the paperwork. Wait until all the paperwork is signed and the property is leased before you let other applicants know that, just in case it didn’t work out with the applicant you chose. You might need a backup option and you don’t want them knowing they weren’t your first choice.
Now that the lease is signed, you should confirm the tenant’s move-in date, make them aware of all pre-occupancy details, and give them the keys. All the benefits should be clearly listed in your initial advertisement, but you should review those during the lease and signing process. Take the time to talk about property amenities, renters’ insurance, and anything else you are able to offer.
You made it! It’s move-in day! If you want to start off on a good foot, consider giving new tenants a welcome gift or a packet that includes information about the area and maybe even a few coupons to local hotspots.
Double check to make sure your tenants have your contact information so they are able to reach you should a problem occur. If you are using a property manager, you can give their information instead. This alleviates some of your duties as a landlord and gives you more time to expand your real estate portfolio.
Stage #4: Tenant Takes Occupancy
It might seem that this is the easy stage of the leasing cycle– tenants have taken occupancy and now all you have to do is collect rent and enjoy life. However, that is not the case. It is important that you take the time to maintain your relationships with your tenants. Need help doing so?
Here are four simple rules to follow when building your tenant-landlord relationship:
- Communicate proactively
- Promptly respond to requests
- Keep your expectations realistic
- Be attentive but not intrusive
How Do These Rules Apply To Property Occupancy?
There are several routine tasks you will have to complete after the tenants take occupancy and all of them are much easier when you apply the four golden rules listed above. What are these tasks?
Collecting rent shouldn’t be complicated. Technology has made this process much easier, as you can now pay on your phone each month!
If you aren’t sure which way you will collect rent, consider these five methods:
- Online rent payments
- Mailed rent
- Designated drop-off location
- Through a property management company
Using a property manager tends to be the least complicated as you do not have to interact directly with tenants.
Conducting Routine Inspections
This tends to be an area where landlords make mistakes. Sure, you have the right to inspect your investment property as frequently as you desire but showing up every other week is a good way to make your tenants feel uncomfortable and have them looking for a new place to live. It is important that you respect their boundaries and give them space in their home. Ask your tenants what day/time is the most convenient for them and make sure that they are aware that it is simply routine so that they don’t get the wrong impression. You will also want to inform them how long you intend to be inside the property. You are the owner of the property, but to your tenant this is home, and it is important that you show them the respect you would want if the roles were reversed. Property managers can handle these inspections efficiently and professionally so that your tenants do not feel like you are intruding on their space.
Handling Repairs And Maintenance Requests
Routine maintenance comes along with inspections and can be quite time consuming for you as a landlord throughout the duration of a lease. What maintenance that is required will vary from place to place, so be sure that you stay current with the laws in your state. Generally, landlords are responsible for predicting their tenant’s needs as it pertains to how they will use the property. This includes tackling routine maintenance, as well as any emergency repairs.
The four golden rules should be applied: communicate proactively with your tenants, promptly respond to their maintenance requests, have realistic expectations, and be attentive not intrusive.
In addition, you should complete these tasks every six months to ensure that you are on top of your routine maintenance which helps you avoid racking up a bunch of expenses at once.
- Replace all the batteries in your smoke and carbon monoxide detectors.
- Replace air filters regardless of how bad they need it, so that your HVAC stays running as efficiently as possible.
- Review utility bills to make sure your property is operating efficiently. Look at the current bill and compare it to one from the same month a year ago. This is the quickest way to determine if everything is still functioning appropriately. If you include any utility bills in your rent, you will definitely want to check this.
- Building maintenance is ideally conducted each month, but if you live out of state or far away, you can get by with only visiting twice a year. Look to make sure that your common areas have been kept clean, your laundry units work, and your security system functions. Take care of your lawn and landscaping and ensure that there aren’t any weak spots or leaks on your roof or cutter.
Dedicating time each month to local small problems will keep you from facing a much larger, more expensive repair down the road.
Dealing With Complaints
It is never easy to deal with complaints which is why it is important that you do your best to avoid them. Typically, the less you complain or request from your tenants, the less they will complain about or request from you. Do your part to keep your property safe and enjoyable for your tenants but without overstepping any boundaries and nitpicking. Small issues that aren’t creating issues for other tenants can usually be let go. You want to allow your tenants to live their lives as this makes your property easier to manage and in turn, keeps the rent flowing in.
When should you intervene?
- If you see something that is devaluing your property
- If you discover your tenant got a new pet
- Someone moved in and you were not informed
- You smell smoke in a non-smoking rental
These are situations where you should reach out to them. You want to avoid confrontation but by communicating with them clearly and early, you can get through to them without any issues. Some states have clear guidelines on dealing with tenant complaints. Does yours?
Ultimately, your goal is to keep your property occupied so that you can continuously receive rent but sometimes, it is not worth it. There are some instances when a tenant violates the terms of the lease, and you will be faced with asking them to vacate the property. This can be unavoidable at times but following the four golden rules of being a landlord, you can avoid undesirable situations.
When To Raise The Rent
When your lease ends, you have the opportunity to renegotiate your rent. Do your tenants plan to renew their lease or not? If they plan to stay, do you need to raise the rent?
Tenants know that you might have to increase their rent over time, even if it is only enough to keep up with inflation. But significantly price-gouging is illegal in most of the United States– be sure that you are within your rights prior to creating a new lease for your existing tenants.
Your life as a landlord will be made a whole lot easier by following the four golden rules, you will also have happier tenants and in turn, less vacancies. The easiest way to coast through any leasing cycle is by keeping the wonderful tenants you have now.
This leasing cycle does not have to be complicated. With enough time and experience as a landlord, you can keep the cycle moving smoothly.
Hiring a property management company is often the most cost-effective way to shorten the lifecycle of your lease and keep your property filled with lasting tenants. Property managers offer valuable experience and can keep up with the day-to-day tasks most landlords have to deal with on their own. When your leasing lifecycle is managed by a partner you can trust, you will be able to grow your investment portfolio over time while enjoying all the benefits that come along with being a property owner.
Contact us (866-500-6200) for more information today!
About Real Property Management Midwest
We are local property management experts serving Cincinnati, Dayton, Columbus, & Louisville. We manage Single-Family Homes, Apartment Buildings, and Condos. With years of experience, Real Property Management is Cincinnati, Dayton, Columbus, Louisville and Northern Kentucky’s #1 Property Management and Leasing Company.