Increase Your Chances Of Running A Profitable Rental Property
There is a lot that goes into dealing with the end of a lease. Just exchanging keys and handing off a check is the surest way to cost you money. Even if you have a great relationship with your tenant, you still need to protect your investment. There are some basic tasks that every property owner should do before, during and after the lease. Doing these minor tasks will save you time and money. They will also keep your rental property running smooth. If you follow these rules, you can increase the chances of having a profitable rental property:
- Document Move-In Condition: Before you hand off the keys to a new tenant, you need to walk the property with them. It is likely that they saw the property with a tenant in place. Seeing the unit without any furniture or other items is often completely different. Some of the biggest disagreements at the end of the lease are about the condition at the beginning of it. Take pictures of every empty room on the day your tenant moves in and email them a copy. Better yet, you can take a video so there is no dispute at all. By sending physical evidence that is time and date stamped, you will avoid any arguments at the end of your lease.
- Let Tenants Know What’s Coming: It is important that you give your tenants enough time to prepare to move out. In a perfect world, they will not have to scramble to repair or replace items. Beginning from about 45 days to the end of the lease, you should begin communication with your tenant. You should let them know that you will be showing the house on short notice. You should also make them aware of what the move out expectations are and what dates need to be followed. The more time you give them, the less chance that there will be major repair items needed.
- Move Out Day: The most important part of moving out for a property owner is making sure the condition is how you left it. Most tenants will look for their security deposit at the end of the lease to use for another property. Depending on what state the property is in, you may have up to 30 days from the end of the lease to issue a check. You don’t need to take all this time, but you should not rush your inspection. If you have a large single-family property, there are many areas that need to look at. For starters, you need to make sure the appliances are in working order. From there, you need to make sure there are no problems with the toilets and sinks. This could take you five minutes to look at, or it could take you an hour. The inspection can take place later that night or the next morning. If your tenant is there, you could rush or listen to what they say. If you have any disputes, you can take a picture or video and send it to them. You should have the initial video from the move in that can resolve any disputes. There is no need to hurry on move out day. Tell your tenant that if everything goes well they will have their check 24-48 hours after they move out. By handing your tenant over a check that day, you lose any chance at using this money if you find something after the fact.
- Update Contact Information: The last day of the lease should not be the end of your contact. Regardless if you are sending out a check or not, you need to have their information updated. Ask them if they have a new address you could send a check out to. It is also a good idea to get any updated email addresses or phone numbers. If you lose contact with your tenant once they move out, it is difficult to find them if you have a dispute down the road.
- Document Cost of Repairs: You are not looking to make money with a security deposit. This should be protection against damage done to the property. Normal wear and tear is expected. Only if there are items that will cost money should you take it out of the security deposit. Along with physical evidence, you should send your tenant a copy of a repair estimate. Allow them to match this estimate if they can, but you have the right to use anyone you want. Time is important in repairing these items as you most likely have a new tenant coming in. Don’t squabble over a few dollars. Money is always important, but it is not worth getting into a dispute over $25.
Having a smooth transition from lease to lease is one of the most important things for any rental property owner. The easier you can make it on your tenant, the more likely they will refer your property. Happy tenants often equal a happy property owner. Make it easy on your tenant every step of the way and let them know what the expectations are from day one. The end of the lease doesn’t have to be a stressful time if you know how to handle it.
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