Great Check list when renting property
Actually, this is what I learned over several years of renting my properties. This list is from when a tenant moves out to scheduling appointments to show a property to potential renters.
These tips are for every landlord. If you use a property manager, you should instruct them to follow this list.
- Switch the utilities to your name
- Re-evaluate the rental market in the neighborhood to set rental price
- Advertise property
- Place a sign in the yard
- Inspect the home and document with pictures
- Change the locks
- Kill the bugs
- Clean / fix the property
- Mail Settlement of Deposit Letter
- Keep rental paperwork the property
- Schedule appointments to show the property with potential renters
- Confirm appointments with potential renters
- Arrive early to appointments to clean and prepare
Before Day 1
As soon as you know your tenants are moving, you need to schedule the utilities to be switched to your name the day they move out. Since no one is living the property, many landlords want to save money by keeping the utilities off. Paying utilities for a vacant property is the cost of doing business in real estate.
You need utilities for several reasons:
- To complete the Move Out Inspection.
- Security - keep a light on in the home, and it is less likely to be vandalized.
- Property showings
- No power limits when you can show the property to daylight hours.
- Tenants want to know the HVAC work (I run the HVAC on low, and turn it to high when I arrive early to each appointment.).
- You may need electric to operate tools to clean and/or fix the property.
Since you are re-renting your property, you need to re-evaluate the rental market in the neighborhood to set an appropriate rental price; you many need to raise or lower the rent.
We know rents go up over time; however, yes, I did say "or lower" the rent. In today's market you may need to do just that in order to re-rent a home. I had recently had a tenant move out, and I was unable to fill the vacancy at the same rental rate.
I had to lower my rental rate by 6% and give a move-in incentive to find a tenant. The market declined; therefore, I had to readjust to it.
The same holds true when the market increases. You do not want to lose money by renting at a below market rate.
Now that you know what you will rent the property for you need to start advertising it for rent. I do not recommend spending money at this point. You should utilize free websites until closer to when the tenant moves out day.
When potential renters inquire about the property, simply inform them it is currently rented and when it will be available. If it meets their timeframe, write down their contact information to call them to schedule an appointment once the property is cleaned and ready to show.
You may want to write into the lease that you have the right to show the property to potential renters once vacating notice has been given. This will help decrease the time the property is vacant.
Wow, that is a lot of stuff before the tenant moves out. Remember - when your tenant moves out, it is a race to fill that vacancy. You want to be running, not starting, once the race starts.
Day 1 (Tenant Move Out Day)
You need to visit the property the day the tenant moves out. When you go, take a yard sign with you. Place the sign in the yard before you walk into the property. A yard sign is a very valuable and free piece of marketing.
I also recommend writing into the lease that you have the ability to place the for rent sign in the yard once the tenant gives you notice they are moving. This will as well help decrease the time the property is vacant.
You must inspect the property and document all damages with pictures. Pictures are necessary if you need to file with small claims court as recourse to cover money owed.
In South Carolina it is not a requirement to changes locks after each tenant; however, I change locks after each tenant and recommend you do the same. I specifically tell my tenants I changed the locks to provide them with a sense of security. I keep the removed locks and use them next time I need to change locks on a property.
A friend of mine moved into an apartment a few years ago. He was sitting on his couch, and a stranger unlocked his door and walked in. It turns out the stranger was one of the previous tenants. He lived there with his girlfriend. He worked overseas for a while and returned home. To his surprise his girlfriend moved out and did not tell him.
Luckily the guy was levelheaded and left without a confrontation. Can you imagine what could have happened? I am not a lawyer, but I imagine it would have been one heck of a lawsuit if something did happen. Be proactive in protecting your business and change the locks.
Even if you do not see any bugs, put out traps for roaches and ants to kill any bugs in the house. You do not know how clean the previous tenants kept the property. The last thing you want is a cockroach scampering across the floor when you show the property to a potential tenant.
Also, if the property stays vacant for an extended period of time, no one is cleaning it, so bugs may come into the property. Placing bug killer in property on Day 1 will save you money in the long run.
Being a landlord is not an easy business, and the To Do list is quite extensive before Day 1 (Move Out Day) is over. I covered the first seven of the fourteen items on the list. Day 2 and beyond will cover the remaining seven and will be the subject of the next blog entry.