7 stages of the tenant’s life cycle: What you should know

The idea of ​​being a landlord sounds simple enough: buy a property, look for trusted tenants, sign a lease agreement and sit back and look at the rent.

Unfortunately, the property management business is rarely overwhelmed by this simplicity, and many new landlords are overwhelmed by all the steps necessary to successfully manage rental property.

The general sequence of operations and standard best practices may seem complicated until you can create an operating system that works best for you. Generally speaking, the tenant’s life cycle involves seven stages: vacancy, screening, leasing, relocation, occupation, termination of tenant, and relocation.

1. Vacancy

Every tenant’s life cycle begins with an empty rental property. If you have never rented your property to a tenant before, you want to make sure the unit is clean and fully ready for someone else to live in. Invest time and money in high quality photos that show off the interior of your property. And the exterior features are ready for you to list for rent.

If you rent a property and are only working with rental turnover, take advantage of the unit being empty and deal with any repair or maintenance issues that need to be addressed.

This is a great time to start building tasks in your operating plan. Check the foundation of the toilet for proper seal, change the HVAC filter, check the smoke detector etc. If you have any unneeded fixes on your list, it’s time to close them.

Before moving on to the next step, your last step is to create a rental list that includes all the details and photos of your property. Explain in detail about location, price, features, community, application process and general lease terms. Put together a marketing plan that includes online listings and syndication networks, flyers, yard signs and word of mouth. When the phone starts ringing and the email starts coming in, the word about your available property will go out.

More about landlording from BiggerPockets

Whether you are buying your first and hold property or an experienced Landlording Pro, these articles from BiggerPockets will help you make your rental game beautiful.

Landlording and rental property

2. Screening

Once you’ve started marketing your available rental property, it’s time to start showing up and consider potential tenants. The Covid-1 pandemic epidemic has opened the door to alternatives such as virtual property tours or self-guided tours, but exhibiting in private with both (safe) landlords and tenants is still a popular option.

Whichever method you choose, be sure to exempt ineligible or unwilling tenants from traveling, such as rental application, rental criteria and property information.

It is important to review your state’s rules before you begin the rental application process. In many states, landlords have to process the application on the received order, in other states, you may be allowed to review and process multiple applications at once.

Call current and previous landlords, work and character references and consider a tenant interview schedule to ask any additional questions you may have. Tenant screening is an important part of the screening process and you should follow your best practices according to your state rules when it comes to background and credit checks.

3. Leasing

After you screen eligible applicants and select a tenant, you will need to enter into a lease agreement. These include creating a lease agreement, setting a move-in date, calculating a move-in cost, and signing a final lease agreement with both parties.

It is best practice for tenants to sign the lease first and ensure a copy of the lease agreement signed by both parties.

4. Move

At this point, you should agree on a transfer date with your tenants and collect all applicable move-in fees before handing over the keys. Review any final rules or regulations and make a plan for when and where your tenant will pick up the keys to the property.

Consider putting together a welcome packet that includes important information such as contact information, a copy of the lease, rent payment instructions, transfer inspection documents, property rules, and details of the tenant portal.

5. Occupancy

Hopefully, this is the stage of the life cycle where you will spend most of your time. Once your tenant has moved into your rental property, your focus should be on property management and building a strong landlord-tenant relationship.

Consider resolving any issues you may have, such as late rent payments, tenant complaints, lease violations, or emergency maintenance issues. Plan a regular visit schedule (a good place to start the season) and share the schedule with your tenants. This will help you stay on top of maintenance before it becomes a big problem.

Tenant transactions are one of the biggest cash flow killers for rental property, so increasing retention rates will help you in the long run. While you can’t stop tenants from moving for personal reasons like job transfers or family, you can take a few small steps to keep vacancies to a minimum. Prioritize your landlord-tenant relationship through open communication and respond to tenants’ requests in a timely manner. Stay on top of maintenance and keep your rental price at a fair market price.

If you find long-term, reliable tenants who pay rent on time and take care of the property, try your best to retain them as much as possible.

Ready to build your investment empire?

Think of us as your personal trainers. From a detailed breakdown of real-world contracts to one coaching session after another and a warm, welcoming community, host Ashley Kehr and Tony J. Robinson bring guests a wide range of “fresh” questions about you but may be afraid to ask.

6. Finish the tenant

Whenever your lease expires, you and your tenant have the option to extend the lease or terminate your lease agreement. If your tenant is interested in getting stuck around, you can either go for a one-month contract or enter into a lease renewal with new dates and terms.

Finishing a tenant can be driven by a variety of factors, from a tenant simply wanting to explore other options up to the consequences of a lease breach. To conclude a lease agreement, written communication is required and often state-specific regulations must be followed. It goes both ways. If a tenant wants to transfer, they must give you a letter, and if you have finished the tenant, you must send a notice to vacate, usually before the lease expires.

7. Move-out

The move-out process is an important step in wrapping up a tenant’s life cycle before you move on to another. Provide detailed instructions on delivery and time to move, clear and transfer keys, such as move-in.

Conduct a move-out inspection to make sure the tenant meets all requirements and note any maintenance issues that need to be noted before the other tenant goes inside. Calculate any security deposit and return it as soon as possible.

Like anything in life, the tenant’s life cycle and property management steps can be unpredictable and complex. However, most situations will follow this simple outline, which will give you a framework for setting your expectations.

Along the way, you can guess multiple interactions that will define your landlord-tenant relationship. It is important to work and stay on top of best practices to manage your properties effectively, build positive relationships with your tenants and keep your properties profitable.

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button