- Real estate investment takes time, money, dedication, a strong work ethic, and the ability to take risks. It also takes a certain amount of savvy in order to close that amazing deal, or wisdom to find the perfect tenants. All in all, real estate investment is not for the faint of heart. However, with that being said, real estate investment can also be an amazing adventure. One that leads you down a road to financial freedom and success. You just have to be willing to put in the time and effort. And we’re here to help. In this article we have outlined for you a go-to guide to follow when trying to improve your internal processes of managing property. That way, you’ll have the best systems in place to better support your business and growth.
- Essentially, the best way to describe this guide is like a flow chart. Each step of the process leads to next, which leads to the next, which leads to the next. The process is as follows:
Tenant Orientation & Lease Signing
Retaining Tenants/Property Maintenance & Upkeep
Tenant Move Out
Unit Turn Around
Each step of this flow chart requires certain processes and steps, which we will break down for you. So, let’s go.
- Attracting Tenants
When attracting tenants it's important that you establish a few things from the get-go. For instance, you'll want to determine ahead of time your rental rates. You'll also want to create unique rental ads that will stand out. So, this means that you want to take quality pictures that actually stand out and are good quality. You also want to think about your distribution method with these ads. Posting ads online these days is a must, and there are tools that can actually be very useful. For instance, Real Estate Virtual Tours are becoming more and more popular. Real Estate Virtual Tours are tours that are done online via extensive pictures and graphics. This is very useful for potential tenants, as it allows them to see weather or not they’ll like the rental before even stepping foot inside. This is extremely helpful when it comes to cutting down on the number of serious renters. Other online methods are posting on craigslist, Postlets, vflyer, and local area websites. You can also market your unit off-line by putting for rent signs in the lawns.
- Screening Tenants
Screening tenants can often be one of the most stressful processes. After all, you're trying to choose a person that you might have to deal with for the next X-amount of months or years to come. So, we recommend having a phone screen questionnaire in place before you even show a unit. This will help you eliminate potential renters that are not a good fit. Next, you'll want to show the unit, and follow up with the interested parties. Once you have a few renters that seem like a good fit, it’s then time to start the rental application process. In order to cover your costs, make sure you charge a fair rental application fee. We recommend about $35. This will help you cover the costs of processing a criminal, credit, and background check. Also, make sure you gather references on the application. Then, reach out to the previous landlords and ask questions about prospective tenants. After you have narrowed down your list, make a decision based on your rental standards. If the tenant chooses to accept, schedule a move in date/lease signing meeting.
- New Tenant Orientation
This process is fairly simple. Basically all you're doing is meeting with the new tenants to sign the lease. As you are doing this, make sure that you're going through and informing them about all the different things that they'll need to know. In this step make sure you get your first months rent, security deposit if you haven't already, and explain to them the different aspects of the lease. Once all this is done you can hand over the keys.
- Retaining Tenants
The best way to retain your tenants is to simply be a good landlord. This means to be fair, accommodating as much as you can, and have open communication with your tenants. Also, it's not a bad idea to reward your tenants who are reliable, consistent, and are pleasant to deal with. Make sure that you're always keeping on top of maintenance and repairs, and make the tenant renewal process as easy as you can. It's best to give them at least a 90 days notice before their lease ends. That way, it can either help you better prepare for emptying out the unit, or maintaining the tenants that currently live in the house.
- Move Out Process
If your tenant decides to move out, go through a move out inspection. This basically means to go through the unit with the tenant and inspect for any damages that may have occurred while they were living there. Make sure you’re fair in how you determine if it's normal wear and tear, or if it's something that was specifically caused by the tenant. If this is the case, then deducted the expense from their security deposit. Otherwise give it back to them in full. Finally, mail the security deposit check and letter to their forwarding address within 30 days of moving out.
- Unit Turnaround Process
This is when you go into the unit and give it a good thorough cleaning, repair any damages that have been done, and do upgrades as necessary. This is the time to get with your contractors either in-house or sub, to help get the property ready as quickly as possible. Once it's complete do your final walk-through. After you determine that the unit is ready for new tenants, you're now ready, once again, for attracting tenants.