Rental Unit Ready to List! What now?

Question

Howdy BP! Our first rental property is ready to list/advertise for rent. I'm looking for guidance on sequential steps to take to go from this point to moving our first tenant in. I've got my RentRedi account ready to post the listing. I've got my accounting all squared away. I've got the forms I need to proceed. When it comes to listing pre-qualifications, accepting applications, collecting information for background checks, etc., I am definitely a rookie looking for some guidance. Can applications be filled out electronically? Do I need to provide my email address and then send individual applications? Lots of questions. Hoping someone can help me out. Thanks!

Disclaimer: We are going to try out managing the property on our own at this time as we live next door.

Disclaimer: We are going to try out managing the property on our own at this time as we live next door.

Trevor Schmitt · Answer

Hi Wynn, congratulations on your progress so far!

A strategy that I have implemented previously on the properties that I self manage is to hire a property management company to complete all of the above items that you mentioned, and get a lease signed. In my experience they have charged 75% of the first months rents for doing so. After they get the tenant in, there job is done.

I know that it can be discouraging to think of giving up 75% of the first months rent, but you should consider the time and energy you will save by letting a professional with systems in place take care of it. In addition, if you can hire a property manager and have all of these tasks completed and someone moved in by August 1... vs... you trying to complete everything yourself, and not getting it rented out until September 1... you have lost money, and a bunch of time/energy.

After the tenant has signed a lease and moved in, you take over again and continue to manage the property.

Just something to think about! Totally worth it IMO!

Wynn Williams · Answer

Thanks for this info, @Trevor Schmitt! There is actually a property management company that comes highly rated in the area. Even if they did it this first time around, it would give me more time to learn the process so maybe next time I could do it on my own. Thank you again!

Erin Church · Answer

You've very welcome :) We were all new at one point! :)

Michael Smythe · Answer

Suggest you use one of the free PM software options as they will offer:

1) Online applications2) Ability to run background checks3) Allow tenant online payments4) Track lease payments with ledger auto-charges5) Other options depend on the software

Alecia Loveless · Answer

@Wynn Williams If you’re going to be living next door to them I’d encourage you to pick your own tenants. That way you’ll have a better handle on them. It’s not that hard.

Once you talk with them on the phone and have their application you start to get a good feel for the people. I mean sometimes one might play you but if there’s chaos in the background you know what you’re getting or dogs barking etc. In my experience it’s been pretty straight forward and if people don’t feel like they’re a good fit with me they generally just go away.

I also try to look into their car when they are at the property looking at it. I’ve got a few properties and I’ll often meet them in the parking area just to make sure I’m not being set up for a robbery or anything, you can never be too careful, and for that look into the car. If it’s full of trash and not we’ll cared for that’s a hard pass and I’ll find something to pass on. And you can tell a well taken car of older car, I’m talking about someone having 30 days worth of fast food wrappers.

I don’t have a fancy electronic application. I just email out a word document. If you’re more technologically savvy even better. Then I narrow it down to the top 2-3 and do background checks and in order of first arrived and approved that’s who I take.

I’m different than most landlords in that I deduct the cost of the background check from the first months rent. I figure it’s just a cost of doing business. I know everyone will think I’m crazy. I think it’s the little things that make a difference.

Scott Mac · Answer

Know how you will have the utilities transferred.

See if each utility offers a Landlord or Rental Home type of account to make your life easier.

Some renters will require a deposit and not have it, and try to keep them in your name for a long as possible.

Some owners allow up to 5 days to transfer, and some make them transfer before handing over keys.

Some areas do not allow you to shut off service to the unit punitively for any reason.

Know what's legal in your area and know how you will handle this procedure.

Good Luck!

Wynn Williams · Answer

@Erin Church this is incredibly helpful, especially the Google Doc. Thank you for taking the time to respond!

Erin Church · Answer

Congrats on getting your first property ready! Discussing with the PM how they screen and their criteria is definitely important, so do that first if you get help with getting tenants. @Trevor Schmitt's idea is a solid plan, especially for starting out :)

The article that @Nathan Gesner mentions that Brandon write is also great! I would say that because the article is old, I suggest looking for a higher credit score than 600. There was an adjustment to the way things were calculated several years ago: https://www.cnbc.com/2018/08/2...

I personally look for 650+. There is some flexibility depending on the overall picture of the credit. (Things like medical debt don't concern me as they likely didn't "choose" to get sick.) Also, on background, you'd want to make sure that your area allows judgment calls based on their criminal background. Some areas consider it discrimination.

If you do decide to start finding your own tenants, I highly recommend listing your criteria in the ad, list what utilitites they will be paying, and use a google doc to prescreen. I have a google questionnaire to collect basic info - many folks won't fill this out, and many will rule themselves out with it. https://docs.google.com/forms/...

So, when someone requests more info/showing, I sent a copy and pasted email back with a link to my Google form letting them know that this is the first step in the process. I only deviate with the c/p of the email if they asked a specific question that I want to address (so, just extra info put into the email).

This allows me to quickly see who meets the criteria. I then copy and paste the same email to each person that qualifies to line up a showing and let them know the next steps in the process.

I suggest as much copy/paste correspondence as possible to minimize the possibility of perceived discrimination.

Good luck with your first rental!! :)

Wynn Williams · Answer

Absolutely! I may try the a la carte tenant placement that was mentioned above and then manage the property after a tenant has been placed. Thanks @Nathan Gesner!

Nathan Gesner · Answer

Properly screening applications is the #1 way to protect your property. Screw this up and everything else will be so much harder.

This article from Brandon is ten years old but still accurate: https://www.biggerpockets.com/...

Rental Unit Ready to List! What now?

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