We recently talked about the importance of providing a move out checklist for your tenant, and how much easier it’ll make the process for the both of you. Once your tenant is all moved out and the property is empty, the next step on your agenda is to conduct the walk-through.
The walk-through is a very important step in the process because it allows you to assess the condition that your property was left in and determine what your previous tenant is liable for. When conducting the walk-through, you should take a record of what damages and/or issues the tenant may have noticed when first moving in, a report of any maintenance problems they may have had while living there, and the move-out checklist that they completed for you. You may want to consider making a chart where you can document all of these things so as to avoid having to be going back and forth.
The first thing you should pay attention to when doing the walk-through is whether or not your previous tenant did everything that they were responsible for. Look at the checklist and make sure that everything on it is done, because are the things that your tenant was held fully liable for. If something hasn’t been done, make note of it so that you can see if it will need to come out of their security deposit or if you will need to charge them additional for it.
Once you’ve determined what the tenant is still responsible for, look at reports of existing issues, and maintenance problems that may have come up while your tenant was living there. This way, you’ll be able to see if any problems still exist and if repairs held up well. You can then determine was needs to be fixed or replaced before the next tenant moves in.
So, a few days ago we talked about different amenities that you should be sure to have on your property for your tenants. Community wide amenities are always good to have because they give your residents a reason to come together while adding a whole other level of appeal to your property. What kind of community amenities should you consider adding to your property?
A community pool is a great idea and definitely a big selling point for people. Maintenance on the swimming isn’t going to be too costly, and your residents will want to stay at your property longer. This is also very appealing for people with children looking for a new place to lease because kids looooove pools. A pool area is also the perfect place to have an outdoor bar or kitchen! This will totally fly in summer time, and gives you the opportunity to hold community barbecues for your residents.
If your property is one where a lot of tenants have children, a playground is definitely something you should consider adding if you don’t already have one. This a community amenity that you won’t cost you a lot to put in place but will make your residents very happy because they’ll feel that your property is a place for the entire family.
If you want to add some recreational space for your adult residents, think about a basketball or tennis court, or even both. This is also a great fitness outlet if you can’t have an on-site gym. You can even hold games and tournaments to bring your residents together!
As a property manager, there may be times when you encounter difficulties in finding tenants for your property. In a case like this, where there are lots of properties similar to yours available, what can you do to stand out? Give people an incentive!
One of the basic economic principles is that incentives matter, and it really is so true. If you provide people with an incentive, they’ll be more inclined to choose your property over others. Incentives are great because you can target them to your specific property or target market. For example, if your property is located on a golf course near a country club, you can team up with the club and offer those who rent with you a lower membership rate. This same kind of thing can also work with properties in college towns, too. Team up with the local cable and internet provider and offer a ‘student special’ with lower rates to those students who decide to rent with you.
Aside from market specific incentives, you can also offer general incentives too. You can offer a reduced application fee (or get rid of the fee all together) to those who sign before a certain date. You could even offer cash incentives, or gifts for tenants, too. The purpose of having an incentive is to make your property stand out when the competition is very similar, so it’s important to also factor your competitor’s incentives as well.
When you have a lot of different people all living together in the same place, it’s hard to expect everyone to get along perfectly fine.
For the most part, all of your tenants have different lifestyles and routines, which could may end up causing between them. Consider two separate sets of tenants in different units; you may have a family with a newborn baby living next to someone who’s in a rock band and practices constantly. It’s easy to see how a problem may arise from a situation like this, and why your tenants may end up having some issues with each other. What can you do to fix problems between tenants?
If your tenants come to you with any complaints about other tenants, your first piece of advice to them should be to talk to whoever they are having the issue with. If your tenants don’t tell one another that when they have a problem with something, there’s no way of knowing the problem even exists. If your tenants have already discussed the issue and it has continued, you may want to suggest that they try working with a mediator. The mediator can step in and help them resolve the problem in an organized and fair manner, and can help you avoid getting caught up in all of it.
Like many words in the English language, sublease and relet tend to be used interchangeably, even though they are two different things. Though they both are methods of renting out property to a tenant, and involve a third party, reletting and subleasing are totally separate understandings.
Well, where to begin?
Reletting is pretty much the process of voiding the original lease with a tenant and bringing in someone new. The new tenant is now the lease holder and the old tenant is no longer responsible for the property. There are various reasons properties may be reletted, be it because of the tenant, landlord, or both. If someone has a special circumstance, maybe a new job, that requires them to move from their rental, the landlord can come in and relet it so that the initial agreement will no longer stand. This is also an option if a tenant is evicted from their property prior to their lease ending.
Subleasing, on the other hand, is a bit different. Subleasing is when the tenant who initially signed the lease rents out the property to another person. The new tenant is responsible for paying rent (this may be less or more than what the original tenant pays) as well as following the terms of the lease. Despite this, the overall responsibility of the lease still falls on the original tenant. If the new tenant damages something in the property, they won’t be liable, the initial tenant will be. With subleases, there is usually an agreement drawn up that states the terms that the new tenant must abide by (i.e. when to move out, how much rent they need to pay, etc.). Sometimes a fee is charged to sublease the property, with the initial tenant being the one liable for paying it.
Should you be working with a property manager?
If you’re looking into real estate and rentals, hiring a property manager, or property management company, is definitely something you should consider. Property managers basically serve as the middlemen between you and your tenants, keeping up with rent, tenant issues, and maintaining the property. Also, property manager can also work with you if you’re investing in commercial real estate!
Property managers are well equipped to deal with tenants and issues they may have so that you won’t have to. If this is your first real estate venture, you’re already going to have a lot of different duties as far as getting everything situated and ready; do you really want to figure out property management on top of that?! I don’t think so. If your tenant has a maintenance problem, your property manager can find and hire a contractor so that you don’t have to. If a system for rent needs to be set up, it won’t be your duty, it’ll be something that the property manager handles. With a property manager, you won’t have to invest tons of your own time into your property; they’ll handle the work
Property managers also know all the rules and regulations that you must abide by, and what kind of protocol needs to be used. Their jobs are to manage properties, so they know what they’re doing.
In any lease agreement, probably one of the most important things is the issue of rent. How much rent will you be collecting? When will you collect it? How will you collect it?
As we’ve talked about in the past, pricing is relative, so that part of your lease doesn’t require as much of your own personal preference as do the other parts. Once you’ve set the perfect monthly rent, you need to set up a date with your tenant when it’s due. Usually, this date falls at the beginning, middle, or end of the month, not just any random date. Choose this date and tell your tenant to make sure that they are financially prepared for it. As a sort of safety blanket, you can give your tenants a 2 or 3 day grace period to pay without being subject to a late fee.
After figuring out how much your tenant is paying you, and when, it’s time to figure out how they will be paying you. At this day in age we have all sorts of ways to pay people instantly, allowing you to have lots of options and choose what’s best for you. We all know the classic payment method: checks. Checks are easy because mobile banking now allows you to cash them instantly, but they still require your tenant to bring them to you. Online payments are great because they’re pretty quick for both you, and your tenant. An online system works well when you have a lot of tenants. Another way that people transfer money that’s becoming quite popular is via mobile apps. Mobile apps like Venmo and Square Cash have made it possible for people to transfer money to each other almost instantly. Though this is still fairly new, it may be something you want to consider.
How should you be communicating with your tenant(s)?
Sometimes it may seem a bit difficult to manage tenants and properties in an effective way, and that’s why communication is so incredibly important.
First of all, make sure you have the right information! Be sure to have at least one phone number for each tenant, a number that you’ll always be able to reach them at. Having your tenants email addresses is also a good idea because it allows for communication on a bigger scale. If you have a property-wide announcement to make, you can send an email out to all of your residents. Tenant File offers this feature, check it out here.
If you have multiple properties and tenants, a great way to ensure that they can all communicate any issues they have (effectively) is to set up an online portal where residents can input different requests they have pertaining to the property. Tenants can have an online login that is linked to their property so that there is never any confusion about where the work needs to be done. All these requests can be sent to management in an organized way and be handled quickly.
In addition to the online portal, you should also have a phone line, aside from the normal phone line, that tenants can use in the case of an emergency. For example, if the pipes burst and begin to flood the property, waiting for the online request to be received may not be the best option.
Recently, we talked about the different benefits and costs that come with investing in single family homes vs. apartments (multi-family homes). Like we talked about before, multi-family homes allow you to house several families, meaning toooons of tenants. Because of the cost and management, apartments aren’t typically everyone’s first choice as far as real estate investments. Aside from apartments, what other kinds of multi-family homes can you look into?
A duplex is pretty much two separate homes, side by side, under the same roof. Each half of the duplex is equipped like it’s own mini-home, allowing for two separate families to live there. Duplexes are nice because you have two separate rental incomes coming in from one single property. If you have a big house that you might want to convert, a duplex is not difficult to achieve with the right permits.
Townhouses are multiple separate homes, side by side, usually within a communal style neighborhood. Townhouses definitely require more work than duplexes, because you’ll definitely have more than two families, but they can be less work than apartments. Like apartments, you’ll typically use a property manager to manage your property.
Two-flats are structurally similar to duplexes in that they are pretty much built in houses. In a two-flat, you have one apartment on the top floor, and another on the bottom floor. Both usually share a common basement, and front entrance, because they’re constructed in what looks to be a normal house.