Managing a Move-In Sensibly

You’ve lined up a new tenant for your rental property.  Now what?  Just as with managing a move out, it always seems like more work than you think it should be to go from finding the person who say “I want it!” to handing over the keys. Let’s walk through some steps for a smooth transition.

First, who is this person who wants to live in your rental? Have the prospective tenant fill out an application.  Include information such as full names of everyone who well reside in the property, most recent two addresses and most recent two employers (or residences and employers covering the last two years).  Call all of the references for everybody. A quick Google of the information and a background or credit check can also provide a lot of information.

Second, determine if the information you have gathered meets your criteria for a renter.  For example, what if there was a bankruptcy 5 years ago but the last 2 landlords report the rent was paid on time every month?  Tough call or no brainer? Everyone has their comfort zone – find yours and be sure to apply the same standards to all applicants.

Then, once you are satisfied (as much as you can be) that the rent will be paid on time and the tenants will take care of the place, it’s time to finalize the details and pull the lease together.  If you don’t have a lease, many samples can be found online. Be sure to check state or local guidelines/laws to see if there’s anything you are required to include or exclude.  If you’re still not sure, consult a lawyer.

A couple of suggestions to include (but not limited to):

  • Full legal names of all parties who will live on the premises, excluding minor children.
  • Exact address and exact dates of the terms of the lease.
  • Spell out who is responsible for what utilities.
  • Amount of the monthly rent and the exact date it is due. On what day is it considered late and what the late fee is.
  • Any security or pet deposits.

Once the lease is signed and the deposit and first month’s rent have been collected (be sure to give the tenant copies and receipts and keep a copy of everything for your records), it’s time to turn over the keys and request the tenants do a walk through with an Inventory and Condition Checklist and return a copy of it to you.  The Checklist should include a list of every room and everything in the room (window coverings, furniture, appliances, etc) with room for notes.  Encourage the new residents to take photos or videos with a digital date stamp.

Now that your tenant is settled into the rental property, it’s time to file everything in a safe place, labeled properly so you can find it easily when you get that call that they’re moving out.

By following these or similar steps, you can help minimize the current and future hassles of being a landlord. Sound overwhelming? 8z Rentals can manage your property and tenant transitions.  Ready to get started? Give us a call today! 888-613-8832

Managing a Move-Out Wisely

You’re tenant has given notice that they are leaving at the end of the lease.  Now what? It always seems like more work than you think it should be to turn over the property. Let’s walk through some steps for an easy and harmonious transition.

First, pull out the paperwork for the tenant and review the specifics such as the actual last date of the lease, how much you’re holding for the security deposit, the Inventory and Condition Checklist and any notes you have from your last walk through.

If you’re not already aware, check the particulars of paying out interest earned on the deposit, what you can deduct and when you have to returned the final amount to the departing tenant. Check state and local laws in your area for details.

Second, schedule a time to walk through the property after the tenant has moved everything out (remember to collect all of the keys!)  Nothing like a strategically placed box to hide a hole in the wall or major stain in the carpet! Using the Inventory and Condition Checklist from the move-in, document any damage with notes and photos or video, whether you think you might charge the tenant or not.

After you’ve done the walk through from the perspective of returning the security deposit to the tenant, do a second walk through from an owner’s perspective.

  • Test every light switch and outlet, locks and latches.
  • Make sure all of the sinks and shower/tubs flow and draining properly.
  • Change the batteries in the smoke detector and carbon monoxide detector.
  • Check the fire extinguisher expiration date. If it’s set to expire during the term of the next lease, replace it now.
  • Open and close all of the doors, windows, closets and cupboards, making sure they work properly, especially if it is a point of exit from the property. Lubricating any squeaky or sticky hinges will help sell the home to a prospective tenant.
  • Test the heating and cooling systems. Change any filters.
  • Walk around the outside of the structure, looking for any weather-related damage.
  • Make a list of items that may not need attention now but may next time around.  Take photos or video if you want to see how much something may deteriorate between tenants through ordinary wear and tear.

And finally, check the curb appeal of your rental. Does the landscaping need sprucing up? New paint inside or out? Will blinds or curtains help the place rent faster?

Now that you’ve completed your checklists and evaluated your rental property, it’s time to get to work! Schedule yourself or your contractors to do any necessary painting or cleaning and get that next tenant moved in.

By following these or similar steps, you can help minimize the current and future hassles of being a landlord. Sound overwhelming? 8z Rentals can manage your property and tenant transitions.  Ready to get started? Give us a call today! 888-613-8832

What’s Your ROI?

A lot of people invest in rentals not quite knowing how to figure their actual return on investment (ROI). Buy a property and rent it for more than the mortgage, right? Well, that’s part of the equation but there are a few other factors as well.

First, how do you figure how much rent your property will bring? Always keep in mind that the rental rate is set by current market conditions and not by how much your mortgage payment is.  A quick look at Craigslist can tell you the current market rate of comparable properties but it’s only a snapshot of what’s going on today.  A good rule of thumb is to check quarterly so you can keep in touch with the ups and downs of rentals in the neighborhood.  You can usually get a better rate if you turn over tenants in the summer but that’s not always the case.  Sometimes spring or fall can actually bring a higher rent.

A periodic check of comparable rental rates in your area can also help you determine if and how much you may be able to raise rents each year.  Being able to raise the rent every year is wonderful but if the property sits empty for even a month, it can take months to recoup the lost income.

For example, if you are advertising your rental at $1800/month, that will bring you $21,600 for the 12 month period typical of a lease. However, if the property is overpriced and sits empty for a month, your gain for the same 12 month period is $19,800.  If you had dropped the price to $1700/month you would be at $20,400 for the year, or $800 ahead.  That would pay for a really nice weekend getaway!

Second, don’t forget to factor in those hidden costs of running a rental, like the cost of your time. Communicating with tenants, depositing rent checks, contracting for repairs and seasonal maintenance.  It adds up to quite a bit of time!  A good property manager more than makes up for their fees by fielding all of the questions and scheduling associated with your rental.

Reaching that balance between maximizing the income with what the market will bear is a constantly changing strategy.

Check out everything 8z Rentals can do for you.  Ready to get started? Give us a call.