Hi, all! I am back this week (Liz – Matt’s wife/partner) to talk about buy/hold investor’s favorite subject: managing tenants and properties.
Over the past 10 years of managing properties, we have learned a lot, had successes, and have made mistakes along the way. Over the last three years, we have grown significantly and have gone from managing 30 units to managing 100 units. Along with the growth of adding units, we have added team members.
There are many people who help in the property management side of our business. As a result of having multiple people working in this process, we have realized the importance of tightening up our property management systems. For the last few months, I have been neck deep in reviewing how we currently manage properties. I have been helping make improvements and changes where needed.
Specifically, I have been working on the following areas:
- Forms/checklists to support processes
- Proper training & inspection to ensure these new processes are happening
Ultimately, I am creating a “property management manual” that will include all of our processes, checklists, and training procedures. I thought it would be helpful to share with you the “tenant life cycle” flow chart that we use.
Below I have listed all the steps needed for each of these areas. I hope the following checklist helps you improve your internal processes of managing property; that way, you’ll have the right systems in place to support your growth.
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The Ultimate 34-Step Property Management Checklist
1. Determine ahead of time your “rental rates” (establish high and low rates).
2. Create an unique rental ad that stands out.
3. Take pictures with a great camera (not just with your phone).
4. Create flyers with unit information and your contact information.
5. Market your unit online (Craigslist, Postlets, vFlyer, local area websites).
6. Market your unit offline (“For Rent” signs, etc.).
7. Schedule showings or open houses (we have traditionally scheduled one on one showings, but we are moving away from this strategy and implementing open houses instead).
8. Complete phone screen questionnaire (prescreen BEFORE showing unit).
9. Complete showing of unit.
10. Follow up with interested parties.
11. Have prospective tenants complete Rental Application (we charge $35 to cover our cost).
12. Process a criminal, credit, and background check.
13. Reach out to previous landlord to ask questions about prospective tenant.
14. If landlord will not answer questions over the phone, send a landlord verification form for them to fill out and fax back to you.
15. Make decision based on your rental standards (be consistent).
16. If accepted, reach out to new tenant to schedule move in date/lease signing meeting.
17. If declined, send a standard letter declining them. File the application and denial letter in a safe place in case they ever apply again (which does happen!).
New Tenant Orientation
18. Meet with new tenant to complete the Lease Signing Checklist, which includes:
- The lease: signed & initialed on each page (always a good idea to have two people reviewing this document to ensure nothing has been missed)
- A copy of Driver’s Licenses of all occupants of the unit
- Security Deposit (we typically collect one and half month’s rent)
- First month’s rent
- Signing of the “Utility Transfer Agreement” (tenant agrees to move over the utilities before move-in)
- Providing a “Truth in Renting” book to tenants (we do this in NJ and have them initial that they received it from us; this probably varies by each state)
- Initialing a “Lead Based Paint Notification” & providing a “Lead Based Paint Booklet” to tenant
- Initialing “Move Out Charges” document
- Filling out a “Tenant Emergency Contact Information” document
- Signing a “Pet Agreement” if applicable
- Providing “Property Management Team” contact information
- Signing W-9 form (form that is sent to bank along with security deposit)
- Handing over keys
19. Office process & checklist:
- Enter all tenant information into your rental management system (we use Rent Manager) — i.e. tenant contact information, security deposit, rent, etc.
- Make a copy of all Lease Signing Documents and mail to tenant within a week, so they have a copy of everything they initialed and signed
- We create a tenant file in the office, as well; that way, we have a file on each tenant, both physically and electronically
20. Reaching out to new tenant:
- One week follow up call to tenant to see how things are going and to manage any issues
- Three week follow up letter to serve as a reminder about transferring utilities and other rules
21. Tenant appreciation program: We created a contest where we enter all tenants who have paid their rent on time for three months in a row. If their name gets pulled, they win a gift card. End of the year, we enter all tenants who have paid their rent for an entire year on time, and the winner gets a flat screen TV.
22. Property maintenance and repairs: Every time a tenant calls in with an issue, we create a work order to take care of the issue. Work order has a priority assigned to it. It is all done through our rental management program.
23. Conduct preventative maintenance: Every quarter, we conduct a “walk through” to check on the unit and see if there are any issues and/or problems that need to be addressed. We then create work orders if work is needed to be done.
24. Collection of rent & eviction process: Establish your rules up front, and the best advice is to STICK BY THEM no matter what!
25. Tenant renewal process: We are starting to send “renewal letters” out 90 days before their lease ends; that way, we are ahead of the curve if the unit is vacant.
26. Tenant communication: We document everything (calls, letters, etc) and put these communications in their electronic file; that way, if you ever have to go to court, you will have everything you did in writing.
27. Create template letters: Create a library of letters you can use as templates; that way, you don’t have to “reinvent the wheel” every time [i.e. lock out, lost keys, noise violations, tenant renewals (90, 60, 30 days), etc.].
Move Out Process
28. Fill out a thorough Move Out Inspection, and then create a “scope of work” on what will be needed to turn around the unit. Take pictures during the walk through. We are looking into automating this process of inspections by purchasing an “app” through Rent Manager.
29. After assessing repairs, determine what normal “wear and tear” is and what will be charged to the tenant and subtracted from their Security Deposit.
30. Mail security deposit check and letter to forwarding address within 30 days of move out.
Unit Turn Around Process
31. Once the “scope of work” and work orders have been created, set a schedule and get your team (in house or sub-contractors) quickly turning around the property.
32. Once complete, have someone clean the unit and do a “final walk-through.”
33. Once “tenant ready,” we take pictures to use for marketing purposes, put baking soda in refrigerator, and put an air freshener in the main room.
34. Now you are back to the “Attracting Tenants” part of this process!
Just like everyone else in this crazy business, we continue to make things better and are working hard to create more automation and simplicity in our business. I am sure I am missing something!
Please share any thoughts or other “must haves” for this checklist!
Thanks for reading and happy investing! And of course, don’t forget to leave me a comment below!