How to Sign a Lease as a Long-Distance Landlord
Imagine receiving a $20,000 check to purchase a rental property. How about step-by-step guidance from some of the most experienced real estate investors in the industry? Well, that’s exactly what the Dream Investment Adventure series is all about.
Follow along with our contest winner, Joe, and his journey of purchasing an out-of-state rental property. Through the mentorship of Steve Rozenberg, Head of Investor Education for Mynd Property Management, they learn about investing remotely.
Dream Investment Adventure Recap
Last week, Joe completed a rental property rehab without ever seeing the home in person! This week, we will learn about the leasing process. We discuss a step-by-step overview of getting residents into your rental property. Most importantly, learn how you can start to collect rent as soon as possible at your investment property!
Use Property Managers to Help With the Heavy Lifting
Joe’s property rehab is complete, and it’s time to start the leasing process. Vivian Lwin, VP of Marketing at Mynd Management, joins Steve Rozenberg today. Vivian shares her tips for leasing a property remotely using technology.
The time it takes to get from marketing a property to leasing it affects how long a property sits empty. Time is money, and efficiency is key.
The major tasks included in the process include:
- Taking photos
- Marketing the property
- Accepting applications
- Screening tenants
- Leasing the property
- Overseeing the move-in process
Who Is Your Management Point of Contact?
At Mynd Management, every owner has a dedicated portfolio manager as their single point of contact. It is their responsibility to understand both the owner and the property. The owner’s preferences and goals are defined, and the property’s unique situation is evaluated. The portfolio manager audits the situation and develops a leasing strategy.
Pro Tip: Set expectations with your property management company to ensure transparency and clarity of goals.
In Joe’s situation, his property needed some work. As you saw in episode 5, having a property manager involved early has benefits. Consider their advice on rehab tasks as they are the experts in the rental market. They know what improvements increase the rent rate. Mynd worked along with Joe to make sure the rehab was going well and on schedule.
How to Pre-Lease Your Rental Property
When available, you can try to pre-lease to reduce vacancy time. Having a tenant lined up ready to go when the property becomes rent-ready is optimal but not always an option. Mynd Property Management Try to parallel-path as much as possible.
If the property is going through extensive remodeling, preleasing is probably not the best option. You will want to wait to market the property with photos and videos of the improved property.
Get Professional Photos Taken
Photos are the most important feature of a listing. Consider including 3D maps to help prospective renters get a better feel for the layout of the rental home.
Pro Tip: Have professional photos taken of your rental property to increase your leasing applicants.
Advertise the Rental Property Efficiently
Uses technology, when available. Consider syndication listing software, as there are more than 40 sites used by prospects to find rental properties. Include listings on popular sites like Zillow, MLS, Apartments.com, and Redfin.
If you choose to work with property management, they will use syndication software. This means no manual submissions are necessary. The property is listed quickly and efficiently.
Pro Tip: Syndicate your rental property listing to as many listing sites as possible to cast a wide net for prospects.
In Joe’s case, the property was marketed and leased in five days. His property had over 173 prospects, 28 showings, and three applicants.
Allow for Visibility in the Prospect Pipeline
The leasing process can be a nerve-wracking time for owners. Mynd Property Management believes in transparency and gives owners full access to data via an owner portal. Owners can log in and see what is happening in the leasing process. They have access to the number of prospects, the number of showings, and the number of applications. Owners like the fact that they can see what is going on during the process with real-time data.
Pro Tip: Use data and technology to ensure transparency during the leasing process.
How to Screen and Select the Right Tenant
Look for a property manager that has a high standard when it comes to screening tenants. The right tenant can make or break your investment.
Mynd Property Management follows specific criteria that include:
- Criminal background
- Credit history
- Employment history
- Rental history
- Income (usually 3.5x the rental amount)
A screened tenant is assigned a score of approved, approved with the condition, or denied.
Ensure Compliance With Laws and Regulations
Throughout the marketing, screening, and selection processes, there are laws, rules, and regulations that apply. For example, the Fair Housing Act prevents housing discrimination. Whether you are self-managing or have a property manager, you must comply with all local, state, and federal laws.
Consider working with legal counsel that ensures best practices are followed. Day-to-day management procedures are designed to follow the law and keep you out of a legal situation.
How to Coordinate the Move-in Process
From the signing of the lease to the move-in, each step can be completed online and remotely with the right technology in place. Online lease signings and lockbox delivery of keys allow tenants to complete the process remotely on their own time.
Advantages of Technology in Property Management
When you partner with a property management company that is technology-focused, the level of transparency and communication is higher.
Technology allows an owner to feel more connected and informed about the leasing process. An updated status is just a portal login away. Of course, nothing replaces personal communication with your portfolio manager. Technology just adds another level of connection and transparency.
Technology also offers valuable feedback to the property management company. Data analysis leads to improved systems and procedures. Mynd Management is constantly testing, measuring, and improving. As a result, the quality of service is continuously rising.
Remote Real Estate Investing and Managing
Consider remote leasing options that include:
- Self-Bookings – Potential renters can book an appointment online to see properties at their convenience.
- Self-Showings – A self-guided tour is completed without the pressure of a salesperson. This process has security protocols in place so Mynd knows exactly what is happening at the property, who is there, etc.
With this option, tenants are able to self-view a property at their own convenience. Then, the completion of the leasing process can be done online from home. Technology like this allows for a frictionless leasing process!
Nothing is worse than losing a quality tenant because they were waiting too long for the next step to begin. Find your stall points in the leasing process and speed them up. You want an approved tenant quickly rolling from one step to the next, not waiting for days for a phone call. Technology helps minimize the time between steps.
Pro Tip: Make the leasing process as frictionless as possible.
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