Why You Must Immediately Create a Cookie Cutter Move In Process, Part 1 of 2

The devil is in the details. So is success. Especially when it comes to real estate investing and landlording.

Most real estate investors are savvy enough to pay attention to all the small details when they are working on putting together a new deal. Whether that be new property acquisition, development or renovation.

But what about making sure that you don’t miss any of the details on your move-in process?

Does your process simply look like this?…

1. Run Ads on Craigslist

2. Have applicants fill out rental application

3. Meet with new tenant, sign contract, give keys

If that is all you have for your move in process check list then you are missing a lot of details. And you are missing your best opportunity to set the tone of the relationship with your tenant, set appropriate expectations on both sides of the relationship and develop strong mutual respect early on.

We have been in the trenches of real estate marketing, management and landlording for about 7 years now… and recently we are starting to see a swell in basic mistakes when it comes to landlording.

Why?

Because of the rise of what we call the “accidental landlord”.

Defined as “a real estate investor whose strategy is flipping properties and found they couldn’t flip a property because of the market so now have to rent it out”.

And there you have your accidental landlord. Someone who is great at finding new deals and making them happen. But someone who is inexperienced in the wonderful world of landlording and property management…

Which luckily never has any problems or headaches whatsoever

So, time to get as detailed and thorough about managing your rental(s) as you are about finding the deals and structuring them in the first place.

What You Should Have On Your Checklist?

An example of a cookie cutter move-in checklist that we share with the real estate investor community is:

1. Prepare a goody bag for tenants containing all their papers…
a. Include a refrigerator magnet with your number
b. Welcome flyers/page
c. Utility, phone, cable, internet contact info
d. Community packet (free at your local chamber of commerce)
e. School information

2. Plan and schedule an appointment for indoctrination of your new tenant, and they bring
a. A certified check
b. Full years renters insurance
c. Required signatures
d. Security deposit

3. Think of them as new employees… don’t tell them this but approach it as such (more on this in later posts… plus checkout our schedule of webinars to get all the juicy details)

4. Go through the “RENT TALK” – which will set proper expectations and develop mutual respect right out of the gate

5. Go through the rental or lease agreement in detail, line by line

6. Make them initial each page – this is important for your own records and protection should any future issues arise

7. Make them sign and date each form properly – yes, we actually have to say this only because we see rookie landlords cut corners here or simply miss details that come back to haunt them later

8. Treat tenant with respect and make copies of all documents for them

Well there you have it. That list should get you started. Print it off and put little check boxes next to each item. And make sure you can put a check mark in each of them.

Having thorough checklists that you can use repeatedly for the same processes simply makes sure that you cover every detail.

In the middle of a hectic schedule and looming to-do list it can be easy to forget details and be tempted to rush when everything is committed to memory.

Don’t rush.

Not in real estate investing or landlording.

Ever.

Thorough check lists (that you actually use!) are a key part of creating systems that produce higher profits and fewer headaches for you.

What is the Rental ‘Shadow Market?’

By Jennifer from Rentals.com

The rental market is certainly changing as an increasing number of people look for rentals and an increasing number of homes formerly for sale become rental properties. How will the surplus ‘shadow market’ of homes and condos affect traditional apartment rentals, and how can you benefit as a property owner?

What is the shadow market?

Though it sounds nefarious, “shadow market” actually refers to the inventory of unsold condos and houses competing with apartments to be filled by renters. The growing volume of these single-family rentals is cutting into the demand for traditional apartments, some experts say.

Quoting from Census Bureau data, the Web site Calculated Risk states that, since 2004, there are 3.6 million homes built for sale that are being utilized as rental properties. And as homes for sale continue to move slowly and owners look for a way to avoid foreclosure, those numbers will surely grow.

Why do single-family rental homes look attractive?

In some cases, owners of single-family rentals are not driven by profit as much as the desperate need to cover the costs of an unsold property that may have been on the market for months or years. Since rent prices for these homes will be extremely competitive, a family looking to rent will likely get the most square footage for the money by leasing a single-family home. And in many places, there are plenty of these properties to choose between.

As the renting of unsold homes and condos likely will continue to increase as income and overall home ownership levels fluctuate with the economy, it is important, as a rental professional, to be aware of this dynamic to help you cultivate prospects for your properties.

What is the impact on apartment rentals?
Any prediction of the overall impact shadow inventory will have on apartment rentals needs to take into account variables such as geographic location and the demographic mix in any given area. The two property types are not perfect substitutes for everyone. A young professional, for instance, who might like the idea of low rent for the square footage of a single-family dwelling may not be as interested in the other aspects of such a rental, opting instead for the convenience and amenities of apartment living. He may not want to care for a yard, for instance.

The lifestyle preference of the renter, then, could still determine the type of property he’ll choose.  But for those tenants who are open-minded to different rental choices than what they may have originally envisioned, the surplus of shadow inventory and its competitive rents will definitely capture their attention and continue to impact the apartment vacancy rate.

Other factors creating an inventory of apartment units is the doubling up that many families have done to stretch their declining dollars: children moving back in with parents, parents moving in with children, and other combinations of friends and relations sharing housing.

How you can benefit
Consider that exposure on sites like Rentals.com can introduce your properties to a whole new community of qualified renters who are looking to replace the housing they lost in a foreclosure or to move to a larger rental with their newly “doubled-up” family. Those property managers who continue to invest in their properties with proper maintenance and landscaping will reap the rewards of eager renters who can no longer afford or see the advantages in owning that home themselves.

Basic House Hunting Tips

Basic House Hunting Tips

Allow Plenty of Time – While it may be tempting to try and visit as many properties as possible on a single day, “overbooking” won’t give you enough time to linger and fully tour each individual home. If you find a house you truly like, you will probably spend more time reviewing each room in greater detail. Assume that each house you view will hold your interest enough for a lengthy exploration.

Dress Comfortably – House hunting isn’t a job interview, so dress casually and comfortably for the season. Wear slip-on shoes and adequate socks – homes with new carpet or flooring will often include “please remove shoes” signs. You will be doing a lot of walking and taking trips up and down stairs, so supportive footwear is a must. Clothing should fit comfortably enough to accommodate reaching up or bending/crouching down to examine cupboards both high and low.

Carpool – Taking just one car is particularly convenient when viewing multiple properties on the same day. A one vehicle approach ensures that no one gets separated or lost. Also, by moving over to the passenger seat you’re free to consider the merits of each last house and pay attention to the neighborhood near each property, rather than focus your energy on squinting at street signs.

Pay Attention to the Surroundings – Speaking of the neighborhood; make sure you pay attention to the area close by each home on the way in. What kind of shopping opportunities and facilities are within a short distance? Are there appealing destinations within walking distance? What are the schools like nearby? How far will your commute be? Are many other homes for sale in the immediate area?

The idea is to have some feeling of whether or not the neighborhood is right for you before you ever set foot in the actual home. If you’re lucky enough to fall in love with the house itself, knowing the lay of the land ahead of time can give you the confidence to make an immediate offer.

Use Your Nose – Generally speaking, a bad (or unidentifiable) smell inside or outside the home is not a good sign. Likewise, be somewhat suspicious if the home is overpowered by the smell of potpourri or intense candles in every room, as this can be an attempt by the seller to mask problematic odors. Mildew and mold smells indicate much larger problems – mold removal can cost thousands of dollars, and locating/fixing moisture leaks can be a difficult task. Pet smells or smoke smells can be minimized with cleaning, but will likely take time to fully dissipate. If you are interested in a home with a strong smell, hire a qualified and experienced home inspector who will unmask the cause of the odor.

Happy Independence Day – Build your Legacy

As we celebrate this Independence Day with our family and friends, remember to thank the troops that fight for our freedom. Remember to celebrate our communities standing tall. Remember to share our successes with the people around us. It is a time of change for most Americans. It is a time to live in the present, not in the past. Remember, real estate is a cycle. But, even if it’s always up and down, the long-term trend is up. It’s time to build your legacy.