A major part of your success as a property owner will be your effectiveness in filling vacancies and the Fill Vacancy Checklist focuses on improving that part of your real estate investing property management business.
In our Fill Vacancy Checklist we first focus on preparing the property for rent. Having the property ready for a new tenant will make the marketing you are about to do to get potential tenants looking worthwhile. It is a waste to prematurely market a property that is not ready for a tenant.
Before we officially put the property up for rent, we will need to research the current fair market rent is. We use the Determine Fair Market Rent Checklist to do that.
Once we have an idea of the rent that we should be getting for the property, we are ready to implement our marketing plan. Use the Marketing to Rent checklist to get the maximum number of tenants looking at the property.
Once you have tenants applying, screen them and process tenant applications before officially signing a lease at the lease signing ceremony and creating a tenant file.
Until my next post,
James
Be committing to use the Leases Checklist you will significantly reduce your vacancies and improve cash flow in your real estate investing business.
We track all of our leases on the Lease Log which allows us to quickly see the status of all our leases, when they need to be renewed and all other important information for tracking and managing leases.
If we need to renew a lease, we utilize the How to Renew a Lease Checklist to start the renewal process at least 30 days in advance of the lease expiration date.
If we received notice from the tenant that they will not be renewing their lease, we can start to run the Tenant Leaving Checklist as soon as we discover that to get a jump on finding a new tenant and keep our occupancy rate as high as possible to maximize cash flow and limit expenses.
Of course, if we have any vacancies we will want to run our Fill Vacancy Checklist to get a new lease on that property as soon as we can find a qualified tenant for the property.
Until my next post,
James
The following article was submitted to us for publication. While managing security deposits properly is more involved than this, this general advice is good policy for avoiding confusion with your tenants down the road.
No matter how great a relationship you may have cultivated with your renters during their period of tenancy, there’s one big hurdle to ending your contract amicably- giving back the security deposit. Renters, especially new renters, can be very naive when it comes to getting their money back. They can also be very optimistic about how much they’re receiving. It is very common for them to be counting on the money in order to finance the deposit on their next rental agreement. They may even be expecting you to hand them a check on the final day of their rental agreement.
In order to make sure that this transaction happens with a minimum of fuss, you have to do everything you can to manage your tenant’s expectations. On your end, you need to be very fair about what is reasonable. Unfairly gouging your tenant on his way out the door is not only despicable, but it is sure to create more headaches than the cash is worth. Before your tenant moves in, walk through the unit with your tenant, documenting the state of the apartment in writing, with pictures/video, or both. This will make absolutely clear to the tenant that you care about this property, and know exactly what the state of affairs is. At that time, make sure to discuss the deposit procedures with the tenant. Give him a fee schedule in writing so that he can refer to it throughout the year.
Three months before your tenant’s residency ends, send him a letter reminding him of your security deposit procedures, and give him another copy of the fee schedule. At this point, your tenant should really have a reasonable expectation as to how much money he will be getting back. If he comes to you with questions, try to answer them, but make it clear that nothing is written in stone until he has completely vacated the apartment and given you a chance to inspect the premises.
Following these simple steps can help improve your reputation as a fair landlord, reduce conflict and stress in your life, and also get tenants to take better care of your property.
You can also get more information about Property Management including an extensive collection of free property management forms exclusively for the use and benefit of our Real Estate Investor Bronze Members.
Until my next post,
James
This article was submitted to us for publication. The marketing strategy it recommends for filling vacancies is not one that I use in my own real estate business, but it may be something that you find helpful for renting out your properties.
My Great Uncle Sylvester is a real estate genius. His secrets are many, as you might imagine is the case for someone who’s been in the business for nearly fifty years. But if you were to ask him for one good tip, and if he liked you enough, he might tell you about six magic words that increased his Property Management (link to exclusive resources for our Real Estate Investor Bronze Resources) profit margin by tens of thousands of dollars in some years.
“Wanted. Renters. One Hundred Dollar Reward.” Before he struck on this self-explanatory campaign, Uncle Sylvester used to advertise his open rental units in the usual way. When he was a little fish in a little pond, word of mouth was enough to generate a decent occupancy rate for his rental units. But as he grew, and his personal connections ran dry, he turned to the typical realty tools for filling an apartment. He took out ads, making sure to use all of the right wording to attract renters. And he developed a relation with two or three headhunting realty firms that charged him a month’s rent to place a tenant. Between the advertising and the headhunters, he was spending thousands of dollars a year, and he still wasn’t as close to capacity as he would have liked.
But when he got the idea to put up some wanted posters all over town, his phone began to ring off the hook. Everyone is looking for an easy way to make some money, and a hundred dollars for little-to-no work is an easy payday that everyone will give at least a moment’s consideration for. That moment of consideration, multiplied by thousands of people who saw those ads, soon had Uncle Sylvester struggling to handle the renters who were calling him. They all had the name of someone who had referred them, and who would be eligible for those hundred dollar checks.
If you want to follow in the footsteps of a realty genius, you should seriously consider putting up some wanted posters of your own (and don’t forget Craigslist and other free listing services). Just be sure to set up a separate phone line so that you don’t have your primary phone number posted all over town.
You can also get more information about Property Management including an extensive collection of free property management forms exclusively for our Real Estate Investor Bronze Members.
This article was submitted to us for publication. It provides a good alternative outlook on dealing with those unexpected and unwanted vacancies during the slower times of year.
Depending on where you live, you will have heard quite a bit about when the “hot months” are for rentals. If your rental property is, for example, near a university, then you’ve probably come to expect that the rental market is driven by students who are looking to rent in August and September. So what do you do when your unit empties out in February?
Some owners do the exact wrong thing: they panic, take out extra advertising, and lower their rental rates. Or, they do the opposite, equally wrong thing. They are discouraged by the thought of hunting up the mid-winter tenant, write it off as a loss, and wait for some opportunity to drop out of the sky.
The thing to remember is that the off season is not necessarily a time when supply outstrips demand. Sure, in September there may be 9,900 renters who are going to select from 10,000 available units. But now, in February, even though there might only be 99 renters out there, the number of available units has also shrunk, possibly to only 100 units. The point is that the laws of supply and demand are independent of the number of units that are going to be turned over that month.
The right thing to do is usually to stick to your game plan. Try to think about where those off-season renters might be coming from. In our college town example, you might want to change the wording of your flier ads to include “Roommate problems? Try renting this affordable one bedroom on your own!” Sometimes a little tweak like that can really make a difference. And it’s certainly more economical than accepting a huge loss because you fear the altered market.
Finally, if it does turn out that the off-season coincides with a disadvantageous change in the local supply and demand situation, then ask your prospective tenant to sign a 6 or 18 month lease. This way, you won’t be caught with your pants down next year.
You can also get more information about Property Management including an extensive collection of free property management forms exclusively for our Real Estate Investor Bronze Members.
We all know that vacancies are costly. Every month that a property remains vacant takes money out of your pocket. You still owe property taxes, insurance premiums, and in most cases a mortgage payment, while there is no rent coming in to cover these expenses. Furthermore, every time a tenant moves out, you usually have to come out of pocket to re-paint the house and have the carpets cleaned or replaced, in addition to other miscellaneous repairs. The best way to avoid these costly intervals is through improving your tenant retention.
Here are some tips that may be helpful to keep your tenants renting your properties for the long term:
Select good tenants to begin with.
This may seem obvious, but the typical temptation is that after your property has been sitting vacant for a month, you’re willing to let almost anyone rent it, even if they do have some problems with their credit report, etc. What is important to remember is that it is much better to wait another month to rent to a highly qualified tenant that will, at the very least, fulfill their rental agreement with you, then to have the less qualified tenant break the lease and move out after four months, or worse, need to be evicted by you. By having highly qualified tenants rent your properties, you significantly increase the odds of them fulfilling the lease and hopefully renewing it for another term.
Provide your new tenants with a helpful welcome packet.
Your goal as a landlord is to establish a positive relationship with your tenants from the very beginning. This starts with making their move-in as smooth and pleasant as possible. One of the things that you should do is to provide them with a welcome packet. It should have information about the property and how they can contact you for maintenance requests and other issues. It can include pertinent information like telephone numbers for the local utility companies, schools, public services, etc. It should also include entertainment and dining information about their new community. A nice touch would be to throw in some coupons for a few local restaurants.
Keep your rent slightly below market.
When it comes time to renew a lease, you might want to consider not raising the rent to the full market value. If the rent should go up by $30, consider raising it only $10. If you raise the rent too much all at once, your tenants may move out in search of a cheaper dwelling. But, if your rents are a little below the market value, then restless tenants will be less likely to move when they see that they actually are getting a good deal compared to what other properties are renting for. Of course, if your market is slow and rents really haven’t gone up that much, then don’t raise rent that year.
Respond promptly to tenant maintenance requests.
Make sure that you have a solid system in place for responding to tenant’s maintenance calls. Even if they are requesting a frivolous repair that you are not going to do, it is still very important to call them back promptly and to politely explain your policy on that item. For emergency repairs, time is of the essence, so make sure that if you are handling the property management yourself that you get your messages regularly and already have repair people lined up to deal with these sorts of situations. If you aren’t that good at following up and staying on top of tenant requests, I would strongly suggest hiring a professional property management company to handle this for you.
Maintain positive contact with your tenants throughout the year.
Again, your goal should be to foster a positive landlord-tenant relationship. This can include things like sending out “season’s greetings” cards during the holidays to your tenants. You should also do a semi-annual inspection of the property with your tenant and use this opportunity to get up to date with your tenant and their life. If you show genuine interest in your tenants and are accessible like this, they will be more likely to come to you with potential problems they may be having with your rental, instead of just moving out because they have no personal contact with you.
Overall, there is no magic bullet to procure and produce long-term tenants. However, you can apply some of these common-sense measures to increase the odds that your tenants will remain in your properties for a good, long time.
For help managing your rentals, please see our free property management forms on the Real Estate Investor Wiki for our Real Estate Investor Bronze Members.
Until my next post,
James
