Written by: Candle Lockett
My favorite tenants of seven years called me this morning to tell me they decided to move out of my 2nd home which I turned into an investment property. They gave me a 30-day notice to vacate which is in accordance with the standard law in the state of Georgia. However, if they would have given me a 100-day notice, I still would not be ready for them to move. They were the absolute best tenants I’ve had as a landlord. Never late on rent, great communication, maintained the property inside and out, very private… did I mention never late on rent? I can’t lie, these tenants were the best. As a landlord, receiving this phone call was a dagger in my heart- I love tenants that pay on time!
Even though I was grieving this loss of my tenants moving, my business had to continue. Within 3 days, I had a new tenant. Here is the system I created years ago and consistently use for my properties and my clients which may help you find tenants the most effectively and in the quickest amount of time.
DAY 1 of leasing your property in less than a week
Review the lease.
If you have tenants already in place, review the termination and move-out procedures agreement of the lease you and your tenant have agreed upon. If you are buying a property with tenants in place, make sure you have thoroughly read the lease and understand agreements the previous owner made with your tenant. This agreement was transferred with the property when you purchased it.
In the lease, you are looking for:
- Deposits: refundable and non-refundable
- Move-in/ move-out inspection documents
- Termination fees
- Lease end dates
Consult with your agent.
Determine the rent rate for the property. The rate will be determined by the age of the home, square feet, number of bedrooms and bathrooms, and most importantly, the location. If your area is a seller’s market, then it is also a landlord’s market. You should definitely consider raising the rent. “But by how much?” you ask. This is where agents come in.
A Realtor can help you determine your rent rate compared to other homes in the market and give you a projection of how long it would take for property to be rented. An agent can also market the home for rent and find the tenant for you. If you consider hiring an agent to find your tenant, agree in writing everything the agent will do and the fees you will pay.
DAY 2 of leasing your property in less than a week
PLAN to get your property on the market for rent- ASAP
Begin with the end in mind. You have slept on all of the numbers (mortgage payment, cashflow, possible cleaning cost, etc.) and you have consulted an agent so you know the average days the property will stay on the market and what it can rent for. So, the rent amount, deposit and other fees are set. Let’s get it on the market. If the demand is high for your area, you do not need to do much marketing.
In my situation, a home for rent was not listed in my zip code for the past 6 months and that property was on the market for less than a week. So I knew I did not need to do much to get a tenant. I only advertised on my FB page (free marketing!). My school district was the best in the county, and it was minutes from the interstate and on a golf course. These amenities were so good that I was also able to increase the rent.
Set dates for the following:
Advertising – Put a “FOR RENT” sign in the yard today. Consider advertising online with Trulia, Zillow, Craigslist, and or Realtor.com. (Once someone sees your advertisement, prospects may have agents representing them. Be very clear if you are giving a referral fee to the agent and make sure it is in writing.)
Inspection- Set date for the move-out inspection for the outgoing tenant.
Preparation- Have professional cleaners and contractors on standby if necessary.
Pictures- Have a professional photoshoot of the property if you need updated photos. Do not use your cellphone. YOU ARE A BUSINESS. If you advertise with quality photos, you will attract quality tenants.Now that dates have been set, let’s get your new tenant.
Get the outgoing tenants on your team.
What do you do if your tenant is still in the home and you want to get it on the mark
Negotiate with the outgoing tenants and make them feel involved in the process.
When I listed leases for investors and we had this problem with tenants I found the best solution is to include the outgoing tenant in the process of marketing.
Consider giving a moving allowance to the out-going tenant of $100-$300. It will be given to the tenants when you return deposits and you receive the keys.
The allowance will be a way of saying “Thank You” for:
- Agreeing to put the “For Rent” sign in the yard,
- Getting access to take new photos of the interior,
- The outgoing tenants leaving the property for 3-4 hours while you stay at the property to show to prospects or letting agents bring to their clients to show
- Leaving the property before the end of the month.
- Providing a lead that turns into a viable tenant for the property.
Disclaimer: Some tenants may not allow you to show the property while they are still in the home. If it is not in the lease, they still have full possession and rights to the property until the lease ends. Do not get discouraged. My outgoing tenants made me wait until the lease ended to show. I used my previous photos and still secured a new tenant just posting one photo. My tenants were out the week before the lease end date, and my new tenants received the keys the next day.
DAY 3 of leasing your property in less than a week
Conduct phone interviews.
Before you show the property, you should be able to determine if it’s worth your time to show by screening the calls. Make sure you know Fair Housing Laws before you start screening.
Ask general questions:
- How soon are you looking to rent?
- Why are you moving?
- Where you do live currently?
- How many people will be living with you?
If you feel good about the prospect and their communication, set a date that day or the next morning.
DAY 4 of leasing your property in less than a week
Pepare and show the property.
Make sure you know Fair Housing Laws. You cannot discriminate!
Make sure all personal belongings, mail, medicine, and valuables are put away.
Do not let prospects walk around the property unattended. The tenant is trusting you with their belongings.
If you are showing the property by yourself, keep your cell phone charged and have someone call in every 15-30 minutes. The calls are an important safety precaution. Prospects who are strangers need to know someone knows where you are and are expecting you to come home.
Create Your Application
There are many ways to access and create rental applications. Business supply stores like Office Depot sell generic hardcopy versions ready to use. There are also thousands of applications online you can download, modify, and print just by doing a Google search.
I recommend having your applications two ways: hardcopies and online. If you create an online application you must have a device easy to use and accessible for the prospects. For my system, If you show the prospects the property and they want to go forward, I use a hardcopy application and pay for the background/credit check onsite. I do not want to chance the wi-fi not working, device not saving the information, every other thing which can go wrong and discourage a prospect from applying.
For my system, I like to have at least 2-3 prospects applying. I fully disclose to all prospects: other people are interested and have applied, and my system for selecting a tenant. I also disclose in writing, on my application, “payment for background check does not mean approval for tenancy”.
Run the background and credit check.
There are many background and credit check companies landlords use online. However, I personally use TenantAlert.com. They are an online company that do both, plus they check for evictions. Whenever I am lease-listing for my client investors. I can download the report, send to my clients and it is easy or them to understand.
To run a check, I log in and add this property to my dashboard. I enter the prospect’s name, email and choose which package the prospect will purchase for my report. Then all I have to do is tell the prospect to check their email. For my rental system, everyone older than 18 must complete a background check. TenantAlert emails the prospect(s) immediately requesting payment and other information to run the check. It takes your potential tenant less than 5 minutes to do the process. In less than 24 hours, I have an email notification that the report is ready. It
Create a Tenant Approval System
Before you begin reviewing the background/credit check, employment verification, and references, create a system to determine if they are qualified to be your tenant. You can make a spreadsheet or use something as simple as a checklist.
For example, I keep it simple so I create a Yes and No checklist. If I don’t have all Yes’s, then I keep looking for a tenant.
DAY 5 of leasing your property in less than a week
Review Background Check and Verify Employment.
The background and credit check for Prospect 1 is in your inbox. If your checklist looks great keep proceeding. If your rubric or checklist for Prospect 1 isn’t looking good, begin process with Prospect 2.
If Prospect 1 is still in the running, let’s call the boss. Very important! Before I make the call to the employer, I Google, the company, going to the company’s website, looking for the supervisor on the website’s directory, and verifying the email address.
On the call with the supervisor:
- I verify their position and the prospects
- How long they have known the prospect?
- I also ask how well the prospects get along with others, their personality on the job, and their consistency (from previous experience with tenants, this is the most important question).
- I ask the employer to verify income
- I ask how long they have been on the job
The goal is to match the application with the employer verification. If it doesn’t match, this is a sign to keep searching for a new tenant.
If the employer will not verify the income, do not count the prospect out…yet. Explain their employer would not verify their income, therefore you need to see 2 months of their bank statements. This is also a win-win because not only will you verify income you can also make sure they do not spend more than they make. You can verify if they save enough at the end of the month and do not have a negative balance, which many tenants do.
To your discretion, if you have added the personal references and the previous landlords to your tenant approval system also call them. If your system is still in the positive proceed. If there are red flags move on to prospect 2.
So now prospect 1 has passed your tenant approval system. Congrats!! Call your new tenant with the good news and tell them to look for your email. In the email, include the following information:
- Written notice they are approved to live in the property.
- Date and time for meeting at the property for move-in inspection, payment of deposit, 1st month’s rent, transfer of keys, and paying all other fees
- Attach the lease agreement. I only do this if tenant has already wired the deposit, 1st month’s rent, and other fees). If you attach the lease prior to give a disclaimer, “The lease is not effective until all monies due to the landlord are paid”
DAY 6 of leasing your property in less than a week
Conduct the move-in inspection.
Whether your state requires an inspection checklist or not, this inspection is a must.
Why is the move-in inspection so important?
There is no gray area. When your tenant moves out, it protects you and the tenant if there is damage, defects, concerns, repairs, or replacement needed to the property. This document determines who is responsible
During the inspection, I do a walk-through to inspect heating and air filters, water heater shut-off valves, septic tank upkeep, and utility boxes.
I also provide a cheat sheet for my tenant. It includes the utility companies and phone numbers, how to make a payment, emergency contact, and my how to report repairs procedure.
Now the initial steps are completed: the tenant is in the house, and money is in the bank.
Keep all documents.
Lease agreement, application, move-in document background check, and all email correspondence on a hard drive or Dropbox and also as a hardcopy. I hope you never have to appear in court with your tenant, but if you do, being prepared will come in handy. I am old school, I have a cloud where this information is stored so I can access it anywhere, but I also keep a file box with this information for each property.
I hope my system has given you tips and ideas on how to create a system for getting tenants. I cannot guarantee that you will get a tenant in 7 days or less. It all depends on your rent rate, location, prospect profile, and demand. The goal of this article is to help you create a system and work it. Even if you decide to hire a Realtor or a property management company, you now have a better idea of the process. If your property has been in the market for more than 10 days with no bites, consult a Realtor. They can help identify the problem and find you a good tenant.
The goal of owning your investment property to create passive income and long-term wealth. The key is mastering your systems and procedures. Most importantly remember your why and eventually this process will be effortless.
Candle Lockett is a Georgia girl that loves real estate investing, rehabbing, and showing others how to do it. As blogger, I share what I know with others through content. I love learning about real estate, money, wealth, and creating multiple streams of income- especially through real estate. I am intentional about creating content you can connect with, and apply to your life.