First time turning a property.

10 Replies

My first tenants are leaving after a great 20 months being my customer. My first question is what do you normally do on move-out day? Do you meet them at the property to collect keys? Do you walk through the property to document the condition before they leave? Are there any final documents you get signed or do they just quietly ride off into the sunset leaving the keys on the kitchen counter?

My second question is about a prospective new tenant that is a company. They will be using the home to house foreign interns. Would/do you all charge a premium for leasing to a company since they are the ones that will have control over who lives in the house?

Thanks in advance!

It would be wise to meet t the tenant to collect all the keys and have a move out inspection checklist .Note all damage items take pictures and have the tenant sign your report It saves a lot of hassle about security deposit deductions 

Depends on the tenants. Most of them we do a walk through a few weeks before they move and note anything that needs attention. Then we do another on the first day or so after they are out. We have had nothing but great tenants so far, but we screen pretty hard and that pays dividends in the end. Keys: they usually leave them locked in the house in a top drawer. If we need them to return, if they want to, for something that needed attention that will come out of the deposit, we let them back in. 

Most communication on move in/out we do by e-mail & text so as to have a paper trail of the process in case it's needed later. If you are in a heavy litigious state, or a tenant-friendly state (I'm not), you might want to have more formal documentation to protect yourself. 

On your second question, I wouldn't rent to them if it's a residential home. They are not actually living there, but rather using the house for commercial purposes. You'll have zero control over who is in the house and will have someone with deeper pockets than you for legal purposes if you end up in a disagreement. 

Hi Jason,

Congrats on having a great tenant. Did you do a move in walk through with them? If so, it is good to bring that to the move out to check conditions at beginning vs end of occupancy. I typically like to do the move out walk through alone, so I can take my time and thoroughly look through the property. If the tenant asks to be present, I always welcome them to join me. 

I ask them to leave the keys/openers on the counter. I access the home with my key. 

It is best to do the walkthrough after they are completely moved out and the house/carpets have been cleaned. At move in, I provide my tenants a "renter ready checklist" document outlining everything I expect in order for them to get their deposit back. It also outlines the replacement costs for things like keys, garage openers, light bulbs, etc.

I complete a security deposit disposition form, outlining their deposit(s) and any deductions for damage / cleaning. I mail it (certified) with the check for their deposit. 

As for the new company. I have so many questions. Can you provide a little more detail? How many students, in/out or same students for a lease term? How are they vetted? 

Great information. Thank you. This prompts a follow up. What do you consider "damage" vs. "normal wear and tear"? I know that's a loaded question but any examples would be appreciated.

Originally posted by @Meghan Martinez:

Hi Jason,

Congrats on having a great tenant. Did you do a move in walk through with them? If so, it is good to bring that to the move out to check conditions at beginning vs end of occupancy. I typically like to do the move out walk through alone, so I can take my time and thoroughly look through the property. If the tenant asks to be present, I always welcome them to join me. 

I ask them to leave the keys/openers on the counter. I access the home with my key. 

It is best to do the walkthrough after they are completely moved out and the house/carpets have been cleaned. At move in, I provide my tenants a "renter ready checklist" document outlining everything I expect in order for them to get their deposit back. It also outlines the replacement costs for things like keys, garage openers, light bulbs, etc.

I complete a security deposit disposition form, outlining their deposit(s) and any deductions for damage / cleaning. I mail it (certified) with the check for their deposit. 

As for the new company. I have so many questions. Can you provide a little more detail? How many students, in/out or same students for a lease term? How are they vetted? 

Thank you for taking the time to reply Meghan! I did do a move in walk through/condition form and will meet them at the property Saturday morning to do the move out portion. This will be before the home has been cleaned but they are moving out of state so it will have to do. I've been in the property a few times recently to show it to new tenants and I don't expect there to be much. They've kept it in pretty good shape.

As far as the new company, they are called Global Education Concepts which is a Division of the Southwest Company. They partner with local businesses to put Foreign nationals on a J-1 Visa program into 12 month internships. They provide the housing and the Foreign nationals are hopeful of landing a full-time job out of the deal and becoming citizens. 2 per room. Most likely for 12 months at a time but they may be overlapping move in/out dates so it could be multiple different students. Their company website outlines how they are vetted. I've asked for references from prior landlords they've worked with to get an idea of what I'd be getting into before I agree to it. I'm overly cautious about the screening process and have already turned down applicants. I'm trying to figure out, if I accept this company, whether it is customary to charge a premium given they aren't a typical tenant.

Shoot, this is a tough one. I love what they are doing and am all for helping foreign students navigate their educational journey here. A good first step would be to see what other landlords' experience has been with this company? Perhaps post a question in the forum with their name / Nashville and see if anyone has worked with them. I would ask them for referrals from current landlords they are working with. You can for sure charge a premium. This is going to be more work for you and in a hot market like Nashville, it needs to be worth your while. I wouldn't agree to contract longer than 12 months, so if it is a **** show, you can bow out easily. Conversely, It could be a well oiled machine that turns into a goldmine for you. Good Luck - keep me posted! 

Jason,

My primary concern with renting to tenants through this commercial opportunity is just that: does your renting to a business imply a commercial engagement, which may be banned by your local zoning board (changes your unit from residential to commercial property which you may not be zoned for), and may also cause the insurance for the building to go commercial. Be careful not to get yourself into something that could cause you to be in violation of local or even state laws.

Secondly, I would demand a copy of the entire vetting record done by the company and additionally would ensure (perhaps through an FBI office) that their vetting meets acceptable standards and laws. Don't believe because someone tells you they do "extreme vetting" that you will get great folks. 

It's a challenge enough to find acceptable tenants to pay rent and not wreck a place, but taking on this customer will add to your hassles: make it worth it by charging a premium for the effort, and be absolutely certain the money is worth it. 

@Jason Krawitz , two things. First, while I normally agree with everything that @JD Martin says, I would caution you against using text as a form of communication. In my state of Colorado, text is not a legal method of notice. Email is, so make sure you check your state laws so you are in compliance with legal notice.

Second, a cursory walk through with them before move out is fine, but inform them you will be performing a more extensive walk through after they are completely out. What happens if they cause damage to a wall as they leave? Or the couch is strategically placed over a massive stain? 

Do not base their security deposit refund on the cursory walk through. 

@Mindy, I didn't know that!!  YAY! I appreciate learning that :)

(texting is not a legal form of notification in Colorado)

fully vetted the student housing sounds like a money maker to me.

I know landlords in Silicon valley that put 2 engineers to a room.. this way they can make 1 million dollar 4bd SFR's cash flow.. they charge 1k to 1,200 per person... of course these are young apple engineers so probably pretty good tenants.

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