Residential housing owners have likely had many questions during the COVID-19 outbreak—questions about everything from rent collection to tenant and staff safety are at the top of everyone’s minds. Beyond that, many of us have vacancies that need to be filled, and there are people out there who need to move to a new living space.
So, that leads us to the topic today: How do we lease an apartment while abiding by the rules that govern social distancing?
Renting Out Property While Practicing Social Distancing
Three months ago, this was not a question. Today, if you invest in rentals, you need to know the answer to this question—or you will find yourself overwhelmed with empty apartments and no way to fill or show them.
We are mid-renovation on several apartment complexes and have plenty of newly refurbished units ready for new tenants. We wanted to take a shot at getting these rented, so I did some research.
I spoke to owners and property managers who didn’t want to change their systems or take the risk of exposure, so they decided to hold off on leasing for now. We also spoke to others utilizing online and hands-off methods (some that we had already been doing) and came up with a system to lease apartments while fully abiding by social distancing protocols.
(Note: This is all well and good while we are working to avoid the spread of COVID-19. But this method can easily be continued post-pandemic in order to optimize the time of our leasing staff.)
Hands-Off System for Leasing Apartments
We decided to first try the method out at our property in North Carolina called Douglas Square. You may remember it as the property that was featured in the BiggerPockets YouTube mini-series “Fair and Square.” We ended up generating over 10 rental applications in the first week while having zero human contact. (In contrast, the week before implementation, we received three applications.)
My hands-off method revolves around automation and online tools, which when combined in the right order, create a powerful streamlined leasing system. The process involves six steps that I will outline here (and you can learn more by watching the video below).
Step 1: Online Marketing
Create a strong online marketing campaign through various channels, such as Instagram, Facebook Marketplace, Zillow, Trulia, and Apartments.com. The online campaign should have a good writeup and pictures. It should also include a video walkthrough, highlighting the strengths of the apartment like recent renovations and amenities.
We also did regular Facebook Live posts, giving a tour of the units. The video should end with a call to action.
To see some examples of the tours and videos we created, here is the complex’s Facebook page.
Step 2: Automated Showing Box
Put an automated showing box (an automated lockbox) on the door of the vacant apartment. Two popular options are ShowMojo and Rently, but there are plenty of others out there. Once you install the box, you direct your interested traffic from Step 1 to the showing box company directly.
The showing box company will ask the questions you have provided them (i.e., Do you have any pets? When do you need to move? Etc.). They also collect a copy of the prospective tenant’s driver’s license and a credit card as collateral.
The prospect tells the showing box company when they want to view the unit, and they are given a code that opens the box for a short period of time. They can then go to the unit, open the door, and take a self-guided tour. The showing box provider then follows up with the potential tenant after the showing to gauge their interest level.
Step 3: Online Application
The interested, qualified tenant can then use an online application such as Appfolio, Buildium, Cozy, etc. to submit their application. This step should include a background and credit check, as well.
Step 4: Lease Signing
After all the boxes are checked, the tenant can sign their lease via digital signature, which is now recognized as a legally binding signing method—no wet signature required.
Step 5: Online Payment
The security deposit and first month’s rent can even be paid hands-off via ACH. All companies mentioned in Step 3 provide ACH services. If the prospect is not set up or not comfortable with online payments, the companies mentioned have relationships with major retailers like 7-Eleven to pay their rent at a brick and mortar location for a minor fee.
Step 6: Moving In
You can then give the prospect another code to the showing box to open the door and move themselves in. Once they are settled, have a maintenance tech go out and move the box to your next vacancy, and off you go!
Now, I know that every situation, tenant, and property is different, so the steps I listed above may need to be tweaked or compromises made to accommodate certain circumstances. That’s all OK, because I believe that this system works for most properties.
In fact, we are now using it across the four states we are invested in on all our properties with similar success.
In addition, once we are beyond the coronavirus, I will continue to use this method, as it creates operational efficiencies for our staff. Instead of having to go out and do showings several times a week, our leasing agent can focus on creating more great content for our media outlets and other proactive activities to help take our properties to the next level.
Hopefully, these steps can help make your rental portfolio more efficient and help others stay safe during these times.
Thanks for reading and watching the video, and have a great and profitable week!
What hands-off methods are you using? Are you inspired by our process, or do you think it’s flawed?
Don’t worry you won’t hurt my feelings—share your thoughts below!