The idea of being a landlord sounds easy enough:
- Buy an investment property.
- Find reliable tenants.
- Sign a lease agreement.
- Sit back and see the ROI come in.
However, the property management business is rarely this simple, and many new landlords are bewildered by all the steps needed to manage investment (or rental) properties successfully.
The standard best practices and general order of operations may seem complex until you can create a working system that works best for you. Typically, the tenant lifecycle consists of seven stages: vacancy, assessing, leasing, move-in, occupancy, ending the lease term, and move-out.
1. Vacancy
Before moving to the next step, ensure the property is cleaned and ready for someone else to live in. Get ready to list it for rent with a high-quality photo shoot. And if required, tackle any maintenance issues or repairs that need to be addressed.
At this stage, your last step is to create a rental listing. Elaborate on pricing, location, distinguishing features, the application process, community, and general lease terms.
2. Screening
Once you start scheduling the showings and considering potential tenants, be sure to give all necessary details like rental criteria, rental applications and begin processing the applications to weed out uninterested or unqualified renters from the get-go.
3. Leasing
Once you have screened the most suitable applicants and selected a tenant, you will need to enter a lease agreement. This involves creating a contract, scheduling a move-in date, adding the move-in costs, and having both parties sign the finalized lease agreement.
4. Move-in
At this stage, you should have agreed to a move-in date with your renter and received all applicable fees before handing over the keys.
Consider putting together a welcome kit that contains essential information like a copy of a lease, contact information, rent payment instructions, property rules, move-in inspection paperwork and other relevant details.
5. Occupancy
Tenant turnover is one of the significant cash flow killers for rental properties. Hence, boosting the retention rate will help you in the long run. While you cannot stop tenants from moving for personal reasons like family or job relocation, you can take a few small steps to manage vacancies at a minimum.
Prioritize your landlord-renter relationships through timely responses to tenant requests and open communication. Keep your property rent at a fair market value and stay on top of maintenance.
6. Ending Lease Term
To conclude the lease contract, written communication is needed and often must follow specific regulations. And, this goes both ways. If the renter intends to move, they must give you a letter of intent, and if you are terminating the lease, you must send notice to vacate. Typically, at a specific period before the lease ends.
7. Move-out
The process of moving out is a crucial step in wrapping up “one tenant lifecycle” before you move on to another. Like move-in, provide detailed information on moving out dates, logistics, cleaning, and handing off keys.
Carry out a move-out inspection to ensure the tenant has complied with all specifications. Calculate and return any security deposits immediately.
