The very first thing you need is a good property management software. I have a perfect solution for you. It is designed for properties that are 50 units and below and guess what? It is FREE!
The name of the company is Cozy. https://cozy.co/
More than 50,000 landlords already use the Cozy platform for various pieces of the rental process, including property listings, rent estimates, rental applications, tenant screening, and expense tracking.
But one of the biggest features that Cozy offers is the ability to make rent payments online. There are currently more than 120,000 tenants who make online rent payments through the Cozy platform, representing more than $1.4 billion in payments.
For self managing the apartments, here comes the “Self Managed 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 (instead of having individual showings, have open houses where you get multiple people at once.)
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 (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 backto 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 (typically collect one and half month’s rent…as an idea, don’t charge security deposits that you have to give back, just charge a one time move in fee that is non refundable to the tenant)
- Signing of the “Utility Transfer Agreement” (tenant agrees to move over the utilities before move-in)
- Providing a “Truth in Renting” book to tenants
- 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 — 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 theyinitialed and signed
- Create a tenant file in the office, as well; that way, 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: Create a contest where you enter all tenants who have paid their rent on time for threemonths in a row. If their name gets pulled, they win a gift card. End of the year, 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, create a work order to take care of theissue. Work order has a priority assigned to it through your rental management program.
23. Conduct preventive maintenance: Every quarter, conduct a “walk through” to check on the unit and see if there are anyissues and/or problems that need to be addressed. 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: Send “renewal letters” out 90 days before their lease ends; that way, you are ahead of the curve if the unit is vacant.
26. Tenant communication: 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 thewheel” 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. Try to automate this process through your software.
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 subcontractors) quickly turning around the property.
32. Once complete, have someone clean the unit and do a “final walk-through.”
33. Once “tenant ready,” 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!
Not all apartments offer great amenities, however, there is a way you can compensate. This is through forming allianceswith local business in your area. You can also, make money if done right. Alliances may advertise in your newsletter, or they can give free gifts to new renters. Example let’s say when a new tenant moves in, your alliance partner a pizza parlor delivers a complimentary pizza. The pizza business pays you to allow them to get in front of a potential repeat business customer. The tenant is happy for free food, the merchant gets advertise their business and when their stomachs and hearts, you the get a little extra cash in your pocket (even if it is $20) your tenant feels appreciated. This is a win-win-win situation! Ideas of merchant alliances:
- Health club
- Dry cleaners
- Office supply
- Truck rental
- Car wash
- House cleaning
- Beauty salon
Your rental/lease agreement sets the tone with your tenants. It is best to obtain a contract that a lawyer has written outbecause it is legal document. The rental/lease agreement should have the names of all adult tenants and they should all sign the rental/lease agreement. This makes each tenant legally responsible for all the terms and conditions. Should someone bail out without paying rent, or someone violates a term, you can cancel their agreement and have them move.
Your agreement should clearly specify that the rental unit is the residence of only the tenants who have signed the lease and their minor children. This will probably not stop people from moving in without your screening process, but what it will do, is keep people aware and cautious. They will know if you found out folks where living there without your screening, they could be asked to move. Every rental document should state whether it is a rental agreement (month to month) or a fixed-term lease (usually it is yearly).
Your lease or rental agreement should specify the amount of rent, when it is due, where to send it and how it’s to be paid(check, cashier check etc.). For late fees, have when it is considered late and the amount of the fee. Also, have a fee for bounced checks.
The return of security deposits can generate problems. To avoid mistakes your agreement should have the dollar amount of the security deposit. In California, the maximum deposit allowed on an unfurnished property is not more than the amount of two months’ rent. The maximum deposit allowed on a furnished property is not more than the amount of three months’ rent. You may use the deposit for possible repairs. The contract with the tenant should state that they may not use it to apply for their last month’s rent. When they do move, you have to return their deposit in 21 days after they move (in California). If decide to take money out of their deposit when they leave, you will need a report showing the deductions on why.
Having proper management in place is key to running a successful apartment property. Depending on your level of time,experience and energy having a property management company oversee the operations may be ideal. Especially if the complex is big. Smaller apartments tend to be managed by the owner (In California anything about 16 units requires an on-site personnel).
When renting to people, you MUST be familiar with “Fair Housing Rules.” This law prohibits discrimination on a variety of things from race, gender, age, disabilities (including mental and physical) marital status, sexual orientation etc.
Be consistent when dealing with potential tenants. Set the same standards across the board. Such as, giving someone apass, by lowering their security payment, or what you charge for late rent compared to other tenants.
Clearly set out you and the tenant’s responsibilities for repair and maintenance in the lease or rental agreement. Here are some pointers:
- Their responsibility to keep the rental clean and to pay for any damage caused by his/her abuse or neglect.
- They should alert you of defective or dangerous conditions in the rental property.
- You provide tenants with your work procedure for handling complaints/repair/requests.
- Have restrictions on tenant alterations on their apartment without your permission, such as adding appliances, painting,etc.
You should include a clause prohibiting disruptive behavior, such as excessive noise, and illegal activity, such as drug dealing.
If you do allow pets, you should identify any special restrictions, such as a limit on the size or number of pets or arequirement that the tenant will keep the yard free of all pet manure. Important rules and regulations covering parking and use of common areas should be mentioned too.
Stay on top of maintenance/repair needs. To avoid problems with tenants, you should make repairs to rental units as soon as you can. Major problems, such as a plumbing or heating problem, should be handled within 24 hours. Always keep tenants informed as to when and how the repairs will be made, and the reasons for any delays. If the property is not kept in good repair, tenants may gain the right to withhold rent, deduct the cost from the rent, and sue for injuries caused by defective conditions, and/or move out without needing to give notice. Some situations tenants can sue for the discomfort/distress caused by the poor conditions.
Your local building or housing authority, and health or fire department, can provide information on local housing codes (and penalties for violations).
Safety On Property
The following are things you can do to limit crime and reduce the risk that you would be found responsible if a criminalassault or robbery does occur:
- Meet/exceed all state and local security laws that apply to the property, such as requirements for deadbolt locks on doors, good lighting, and window locks.
- Provide a security system that provides reasonable protection for the tenants. To get advice speak with the police, your insurance company, and private security professionals.
- Educate tenants about crime prevention/safety.
- Conduct regular inspections to spot and fix any security problems, such as broken locks, swimming pool precautions or parking lights.
- Handle tenant complaints about dangerous situations, suspicious activities, or broken security items immediately.
- If additional security requires a rent hike, discuss the situation with your tenants. Many tenants will pay more for a safer place to live.
While some of these tactics may be expensive, the money you spend today on effective crime-prevention/safety will be much less if something bad did occur on your property.
Drug-dealing tenants can cause problems. If other tenants feel threatened, the authorities may give you heavy fines and may seek criminal penalties for knowingly letting the situation proceed.
To avoid trouble caused by criminal tenants and to limit your liability in any lawsuits that are filed: do a good job screening your tenants, don’t accept cash rental payments, in the rental/lease agreement have it clear that you will evict tenants who deal drugs, get advice from the police on what to look out for.
If you were negligent in taking care of your property and that negligence caused an injury, you could be liable for damages.After all it was your responsibility to maintain the section of the property that caused the accident and if you failed to take steps to prevent the accident, your chances of getting a lawsuit are increased.
A tenant can file a personal injury lawsuit against your insurance company for medical bills, lost earnings, pain, permanent physical disability, and emotional distress. A tenant can also sue for damage to personal property, which results from faulty maintenance or unsafe conditions (ex their car is damaged).
You can avoid many problems by maintaining the property in excellent condition. By using/having:
- A written checklist to inspect the areas and fix any problems before new tenants moves in.
- Encourage tenants to immediately report safety or security problems (not just their unit, but throughout the property).
- Keep a record of all tenant complaints and repair requests with details as to how and when problems were fixed.
- Twice a year, give tenants a checklist on which to report potential safety hazards or maintenance problems that might have been overlooked. Use the same checklist to personally inspect all rental units once a year.
Tips on choosing insurance:
- Purchase enough coverage to protect the value of the property and assets.
- Be sure the policy covers not only physical injury but also discrimination cases, unlawful eviction, and invasion of privacy suffered by tenants and guests.
- Carry liability insurance on all vehicles used for business purposes, including the manager’s car or truck if it’s used on the job.
If disputes arise between you and your tenants, try to resolve them without lawyers and lawsuits. You can try to put inyour lease/rental agreement that all issues will be brought to a mediator/arbitrator (who handles “land lord tenant mediation matters).
If you don’t have a mediator, and you have a conflict with a tenant over rent, repairs, noise, or some other issue thatdoesn’t immediately bring an eviction, meet with the tenant to see if the problem can be resolved informally. If your dispute involves money, and all attempts to reach agreement fail, try small claims court, where you can represent yourself. This will save significant money.
Limit your exposure to lawsuits. Popular reasons are mold and fair housing. Mold starts with water. It is about prevention,controlling water and moisture intrusion. You should proactively attempt to identify potential sources of water and moisture intrusion before they occur. Such as old roofs, pipes that leak or sealed properly, toilets that don’t function correctly. If a tenant claims that mold is affecting them, you should take it seriously.
Finding A Right Contractor:
Having contractor’s assistance is important in running an apartment building. Picking the correct contractor will make your worries less. Have them meet you in person when they present the bid to you. Observe how their quote looks. Thisis a proposal, so critique the look and feel of it. Did they put time to put it together, or make it in two seconds? Also, have them physically show you a copy of their business license and ask for a copy of their insurance and bond papers. If they can’t, tell them to make like a banana and “split!”
Have the contractor give you referrals. With the referrals and ask them do they:
- Return calls in a timely manner?
- Show up for work when he says and on time?
- Keep the job clean as he goes?
- Give consideration to residents?
- Express potential maintenance problems?
Property Management Ideas
- Have photo ID cards for onsite staff, residents will feel safer. Especially if the person comes into the apartment tofix something. Having a standard polo shirt is good too.
- Send thank you notes to residents who keep their patio clean. On the flip side, notify them when it is dirty.
- Have tenants able to pay for their laundry by debit card, or have change on hand.
- One night a week, stay open to 8 pm. Have manger work one Saturday per month.
- Instead of giving away money for people that pay their rent on time, offer a coupon to a local merchant.
- Send anniversary gifts of occupancy.
- Extend your referral bonus to them for up to 12 months after they move out.
CYA… keeping files on all tenants:
- Having the forwarding address of the tenant to which they have authorized the refundable deposit is key. This is because if someone skips town and leaves without paying rent. With this information, you have a person and address to find the person.
- Copy of the deposits form. What deposits were held back, if any, and for what reason (could prove handy if taken to court).
- Residential Lease Agreement.
- Lease terms, amount of rent, how long the resident stayed, what personal property, such as appliances, are included in the property and all deposits taken in.
- Credit Report received when the application was made this is good for recovering rent owed.
- A list of property improvements that were made prior to advertising the rental.
- Correspondence received or sent to the resident during their tenure.
How to Market Your Property to Future Tenants?
You should have a marketing plan for your property. Here are some points that will help you market.
- Who is your target market?
- What are their hot buttons?
- Why will they rent from you?
- Where and how will they know about your property (what media will use to advertise)?
- What is unique about your property? What is its Unique Selling Proposition/Promise (USP)?
- Make a list of 7 reasons why someone should live at your property.
Writing ads promoting the property:
When writing ads promoting your property, target shopping centers, recreation locations, schools etc. Then determine how many minutes the commute is. Promote that number rather than say close it is to this or that. To break it down even further… “saving ten minutes a day on your commute means you can have an extra 50 minutes to spend time with… spend 50 minutes a week with your children.”
Analyze how other properties are selling themselves in your city. Your ads should have the reader imagine thatthey are already living there. Stress benefits over features. After you have written the ads determine how your ad, measures to the competition?
What is in it for your customer? Stress benefits not features.
A benefit solves a problem or satisfies a physical, emotional, or financial need. Benefits explains how the product/service makes them feel, and why this feeling is important.
- Four-wheel suspension isn’t a benefit; a smooth ride is.
- Low fat isn’t a benefit; you can eat more is
First Impressions and The Property Tour.
Remember, prospects determine their impressions of a rental unit based on what they see from your web site/curb appeal/advertising and will decide if they are likely to rent even before they pick up the phone.
- How are the phones answered?
- How prospects and residents are greeted?
- What does your voice mail sounds like?
- How does your curb appeal, corridor, signs, exteriors of buildings, landscaping, parking lot and entrance look?
- Advertising (discussed previously on what it should have).
- Does the office have a pleasant appearance and smell.
- Is the material that is handed out professional.
Showing the apartment:
When potential residents say let me think about it on moving in, reply with:
- What do you need to think about?
- What would make you feel more comfortable?
- I am not sure I understand. Is there something I missed?
- Could you be more specific?
- What makes you think you need more time?
Any time a prospect says, “I need to discuss it with “reply with, “What are you going to recommend?”
The person doing the tour of the apartment should always ask for the business (ask them to rent, even if they have notbeen approved. In all sales, the person selling, always have to “close the sale.” There are several strategies in doing this. Here are some closing lines you can use:
- Don’t you agree that this apartment has a nice … (point out a feature)?
- Do you prefer the apartment with or without …?
- How do you think your furniture will fit in this room?
- 24 hours close, we will hold the apartment for 24 hours for you at no charge/obligation when you make up your mind you can move right it.
- Do you want the apartment by the pool or the one near the laundry room?
- What would it take for you to leave your deposit to reserve your new home?
- Would you prefer to pay your security deposit by money order, debit or credit card?
- If I could arrange for an upgrade on the would you provide a deposit today?
- How does this compare to what you had in mind?
- What do you like about the apartment?
- What can I do to make this apartment yours today?
Showing Unit with No Leasing Office
Not all apartments have a leasing office. If your property doesn’t have one you should have an inexpensive fold-up table,colored tablecloth and chairs. Use this setting for signing the lease and answering questions. Have applications and other information available. When a prospect leaves your property they should have:
- Folder of collateral for property
- Flyer/pictures of property
- Newsletter (if you have one)
- Collateral promoting stores in the neighborhood (from your business alliances)
- Application or card telling them to go online and fill out application (if you have this software capability).
- A positive impression of you and property
- A clear understanding that your unit fitstheir needs the best
How to Start and Manage a Tenant Retention Program?
Real estate investing is a business and should be treated as a business. Most likely you have heard 80/20 rule. 80% of yoursales come from 20% of your clients. That means, a company’s focus should go into the group who makes that 20%. With owning an apartment building, your property should have plans and budgets to find new tenants, repair items on theproperty that will keep it in good shape. Do not overlook the importance of focusing your attention on your customer (your tenant). It is more expensive to find new residents rather keep what you have!
Market Research for apartments from www.satisfacts.net states:
“The research…with nearly 50,000 resident’s nationwide shows there is no correlation stronger than that between outstanding work orders and satisfaction. Given the strong correlation between satisfaction and the likelihood to renew, it is clear more attention needs to be focused on service.”
“Only 38% stated they were ‘very likely’ to renew their lease. When the remaining 62% of residents were asked why they were unsure or would not renew, the answers revealed many issues which are clearly under the property’s control.”
“When asked what could be done to improve the community, the issues were similar to why residents would not answer that they were “very likely” to renew their lease. Most of the issues are well within the property’s control. In addition, despite having a significant number of Hispanic residents, respondents stated that nobody in the office speaks Spanish.”
“Each year our resident satisfaction research confirms that what drives the likelihood to renew is the percent of residents with outstanding work orders, staff responsiveness, work quality, security, perceived value and residents pride in their apartment and community.”
Top 20 Reasons on why not to renew (www.satisfacts.com):
- Buying a home 20.25%
- Relocation 17.9%
- Rent Increase 6.5%
- Rent to Value 5.4%
- Maintenance Responsiveness 4.9%
- Safety-Community 4.3%
- Office- Responsiveness 4.2%
- Neighbors 3.8%
- Maintenance work quality 3.5%
- Office courtesy 3.2%
- Office work quality 3.3%
- Safety Neighborhood 2.7%
- Moving home 2.6%
- Apartment condition 2.2%
- Community Clean 2.2%
- Community parking 2.1%
- Safety gate 2.0%
- Apartment need different size 1.8%
- Maintenance-courtesy 1.6%
- Location overall 1.5%
Display Great Customer Service When the Tenant Moves In.
- Stock unit prior to move in with toilet paper, liquid soap, ice, paper towels.
- When new tenant moves in buy them pizza and soda (as mentioned this could be provided by your business alliance).
- Week after they move in personally visit them. Call ask if alright to visit to ascertain their move in experience. Givethem business alliance resource coupons. Provide a survey and a plant as a gift.
- Give a welcome handwritten letter 2 weeks later, address them personally.
- Call tenants each month, make sure everything is ok, and solicit for service requests.
- 6. 90 days before renewal send letter extending them to renew.
Bigger Picture of Maintenance Servicing.
- Increases tenant satisfaction
- Resident retention
- Equipment reliability
- Increases life expectancy of appliances
- FYI, conduct quarterly maintenance checkups to prevent huge surprises.
Customer Service Maintenance Survey that your tenants fill out
- What was the request?
- Was our response satisfactory?
- Did they fix the problem?
- Was the work area left clean?
- Are you pleased with the overall service?
- Any suggestions?
When maintenance finishes, make a call back on completed service requests within two days. Make sure requests were completed to resident’s satisfaction. By monitoring the maintenance activity, will not only save on expense but can also improve the total operations on the property. You should:
- Perform proactive prevention by regularly servicing equipment (heating, plumbing and water heaters).
- Review the contracts of key suppliers quarterly. Costs may rise while the quality may not move in the same direction.
- Decide when to repair. Don’t replace when something can be fixed. Learn when to trash it. At the same time know when to replace rather than fix. When repair cost exceeds 50% get a new one.
- Charge them if they damage the property. If you rent a car and you damage it, you pay for it. Be sure to state what the policies are upfront and make sure they understand.
- Show them how to fix minor things in their unit.
- Hire for more than technical skills with maintenance. They leave an impression on your residents.
- Marinating good records is key to saving money. Keep records of all requests and contracts.
Retention Survey Drawing
Here is an effective survey you can ask your tenants. I keep referring to having running an apartment like running abusiness. Tenants are customers. You goal is to keep satisfied and loyal customers. One way to gauge where you are and how much you are meeting their needs and wants is by having a survey to give you the answers you need. Here is a survey you can use.
- Overall are you happy living here?
- What do you like most & least about living here?
- Rate our staff 0-10.
- Would you recommend a friend to live here?
- Have you thought about relocating lately? Yes, or no. If yes, what would change your mind?
- If there was one thing that we could change right now what should it be?
- How would you describe the apartment community in one sentence?
- What would be the one thing we could do to improve your quality living here?
- Other thoughts you may have?
- If we were to have free seminars, social events would you attend. If so what day and times works best for you?
- Name optional
When Tenants Have Complaints Use This Strategy:
- I am glad you brought this to my attention…
- I will do my best to resolve the issue. Apologize for the situation.
- Your goal is to listen and assist (have the right body language when you are listening).
- Ask probing questions, and then repeat them back to make sure you understand.
- Explain the steps that will be taken next to resolve the problem.
- Make a plan to follow up with the person to tell them the results.