The Vital Part of Being an Investor: Leasing
For the month of December we are going to be doing a series of blogs on the part of owning a rental that is time consuming, frustrating, but absolutely necessary for success: LEASING. After meeting with countless owners and being in the property management business for almost 10 years, we get a lot of the same questions about leasing. We will address those questions while also sharing our best leasing practices. We will finish up with a market update.
Here are the topics we will be covering in December:
- What is so hard about Leasing? and Why isn’t my unit filled yet?
- How long does it take before my home is occupied?
- The biggest mistakes we have seen in leasing (& how you can avoid them)
- Market Update – what are we seeing going on in the West Michigan rental market.
What is so Hard About Leasing?
You got your unit ready, hired a property manager, and handed over the keys. Now why isn’t it leased already? Slow down there! Leasing is one of the most complicated and detailed parts of owning an investment property. When you hear horror stories about rentals, it always involves the tenant, right? So doesn’t it make sense to lease the properly correctly and make sure the tenant is a good fit?
Unit Preparation BEFORE Listing
We can’t stress this enough. A prospective resident will NOT be able to envision future improvements in a unit. The home needs to be ready BEFORE you start showing.
If you have furnishing in your unit, here is a quick video tip that explains how to lease a unit with furnishings.
This includes all repairs done, lightbulbs replaced, painting and flooring completed, and a final cleaning completed. The unit should look like how it is going to be on move in day. This will allow your unit to rent faster and avoid miscommunications about expectations.
Marketing and Leads
If you list a unit on craigslist at fair market price, odds are, you will immediately get several inquiries about your unit. This is a great sign, but don’t think you are on the easy road yet! These leads need to be responded to, prescreened, showed and then thoroughly screened before acceptance.
Need help with finding the fair market rent price? Check out our video blog here.
Craigslist can be a great lead generator, but we have found that it does not provide the best quality leads. Using rental specific sites and SEO generated from our website allows us to bring in higher quality leads that save time and money.
Prescreening and Final Screening
To save yourself a ton of time and money, you will need to screen your applicants before showing and before accepting an applicant. Prescreening happens prior to a showing and is a shortened version of screening:
- Start to build a rapport with a prospect.
- Verify their name, email, number,
- Verify they can financially afford the unit
Once the prospect is ready, willing and able to apply, we continue with a thorough screening of each applicant over the age of 18. Some parts of this screening can be quick, but some parts, like income verification can take some time to complete.
We can’t talk about leasing with out mentioning fair housing. Every time you list your unit for rent, you must:
- Use the same criteria for each prospect
- Treat all Individuals in the same manner from lead to move in
- Do not discriminate against race, color, religion, national origin, gender, familial status, disability, marital status, and age, among others protected by local laws.
For more information about Fair Housing laws, visit the Fair Housing Center of West Michigan here.
To sum it up, there are a lot of different processes that need to happen before a prospect is accepted. Skip one of these processes and your risk for a bad tenant increases and you could set yourself up for a fair housing complaint. Take the time to do it right and put a tenant in your home that is going to save you time and make you money.
Stay tuned for next weeks blog on the timeline of leasing.