Cumming, GA · Member since 2013 · 5 posts · 0 votes
So, this is my first time doing a formal process for finding a tenant for our rental property. We had always found friends in the past, but won't go that route again. Anyways, we have had several applications on the property and most of the applicants have been woefully unqualified by our not so crazy metrics. However, we recently had an applicant who looks to be great based on their history. Unfortunately, they are on a month-to-month lease at their current residence and therefore want the lease to start June 1st.
Since this is the first time we have dealt with a ready to go vacant unit, what is the normal lead time between approving a tenant and having the lease start? I've heard that if they are ready to move in tomorrow, that can be a red flag and having them move-in in a month isn't that atypical. I hate the idea of having it sitting there vacant for a month, however, the applicant says that they won't give notice until they have a lease (which makes sense to me).
Sorry, I'm probably rambling on, but I just want to make sure we make the correct decision. Thanks.
I'll take the bird in the hand/the qualified tenant that has to wait till month-end vs. continuing to market it. My standards are high so if they meet it just have them give their reservation/hold fee to hold it. Then, once the lease starts the reservation fee converts to their deposit. This is how you may be able to address the non-refundable deposit issue.
So, if they want it that bad they need to pay the non-refundable reservation fee. If they won't pay it now I would continue to market it as there is a decent chance they won't end up moving in even if they sign a lease. Sure, you could purse them for breach of contract but that doesn't solve your problem of a vacant property.
The law may be different in Georgia, but here, if they applicant is presently month-to-month, they need only serve 1-month notice on their current landlord. If they deliver that notice with their May 1 rent, they could be moved in for June 01.
You can sign the lease now, with a start date of June 01. I just signed two last week - for units which are still occupied - to start on September 01.
Are you planning to go month-to-month or use a term (annual) lease?
I am having them sign a one year lease. I did not handle my situation optimally. Apparently (several landlords have told me), I should have been showing the unit while it was being renovated so that tenants who are looking 2-6 weeks out would be able to get an idea what the unit would be like. That way, I wouldn't be faced with having to carry the vacant property for another month, since I started showing the property after it was completely move-in ready. Oh well, definitely a lesson that I learned for the future!
Your not the first to do that. Initially I did not want to show units that were not "ready" as well ... then I decided I preferred to know they were rented before I dove into a renovation and spent money.
This spring I showed our "new" student house where the basement is unfinished and rented it as a 4/5-bdrm, 2-bath house (with 2-bdrms & a bath in the basement) for August. I had spray-chalked the room outlines on the unfinished basement floor and handed each prospect a floor plan when they viewed the property. We start the basement renovation on Thursday :-)
I am a property manager of a larger apartment community (300 apartments) and we won't hold a vacant unit longer than about 1-2 weeks, however we have the funds and traffic volume to be able to do that.
With SFHs it is a little different. You need to look at your lead volume for prospects. If you are getting a high volume of leads then expect that to continue. Some one will come along that needs to move inside 30 days.
And don't discount people that need to move ASAP. They are your best friend! While it can be a red flag, as long as you do your due diligence on them you should be fine. They could just be moving out of a friend/family's house and no notice is necessary. They may just be a procrastinator. ALWAYS run credit and criminal checks and verify their rental history. The previous landlord is a gold mine of information.
I'll take the bird in the hand/the qualified tenant that has to wait till month-end vs. continuing to market it. My standards are high so if they meet it just have them give their reservation/hold fee to hold it. Then, once the lease starts the reservation fee converts to their deposit. This is how you may be able to address the non-refundable deposit issue.
So, if they want it that bad they need to pay the non-refundable reservation fee. If they won't pay it now I would continue to market it as there is a decent chance they won't end up moving in even if they sign a lease. Sure, you could purse them for breach of contract but that doesn't solve your problem of a vacant property.
We've had our SFRs vacant for sometimes as long as 6 - 8 weeks, depending on the time of year they become vacant. We had one house where the lease ended in November/December, and it was difficult to find anyone who wanted to move during the holidays. The good part is that when it finally rented in January, that's a month that if it goes vacant again, it will likely be filled more quickly.
When a tenant wants a property and they are still under a lease agreement, we ask for a deposit of the full security amount, have the lease start whenever they can move in, and sign it right away. The time we would spend showing it to others that could potentially move in sooner isn't worth it...getting that lease signed and the security deposit right away is worth holding a property for a month.
I'll echo the majority of the other posters. If you have a qualified tenant who needs a month to be ready get a non-refundable deposit to hold the unit (you can even credit this to the first months rent or security deposit depending on your state's laws). If they aren't willing to pony up some money to hold the unit then you just move on and increase your marketing with extra flyers, craigslist, hotpads, calling realtors, etc. Better to eat an extra months mortgage than rent to the wrong people!
Although, I do like what Jeff said about not waiting in his case because of the high volume of traffic and leads. I'll keep that in mind when I move into the big leagues!
Thanks for all the replies! I hadn't even thought about a reservation fee that turns into the security deposit. It would definitely make me feel better about taking the property off of the market and renting to someone a month away from moving in.
I do just as Chris Sweeney stated (I hope I got the correct Chris, since I have a local BP colleague with the same name, and those tiny avatar pictures that come up in the mention selector aren't so easy to discern for me).