One of the most important things to be prepared for as a landlord is the tenant cycle.
Renting to tenants is much more than just finding a great tenant, screening and placing them in a rental property.
Each part of the relationship with a tenant is part of the tenant cycle, and the cycle must be followed because eliminating one part of the tenant cycle could lead to less revenue than the landlord expects and potential problems for the landlord over time.
In this article, we will break down the tenant cycle and offer you several tips for understanding how this process works.
Understanding The Tenant Cycle
Vacancy – The first step in the tenant cycle is obviously having a vacant rental property. This is to be expected because unless a landlord purchases a property that’s already occupied by a tenant, vacancy is something that every landlord has to deal with.
Tenant Screening & Placement – Once the property is cleaned and in rent ready condition, a landlord will move forward with marketing that property online, or other means and start receiving inquiries from prospective tenants.
This people who express an interest in the property will need to screened and qualified based on if they meet the landlords criteria including if they earn 3.5 times the rent or not.
Once the most qualified tenant is chosen, they will then be placed in the rental property.
After you’ve screened qualified applicants and selected a tenant, you’ll need to enter into a lease agreement. This includes creating the lease agreement, scheduling a move-in date, calculating move-in costs, and having both parties sign the finalized lease agreement.
It’s best practice to have the tenants sign the lease first and make sure both parties receive a copy of the signed lease agreement.
At this point, you should have agreed on a move-in date with your tenant and collected all applicable move-in fees before handing over the keys. Review any final rules or regulations and create a plan for when and where your tenant will pick up keys to the property.
Consider putting together a welcome packet that includes important information like contact info, a copy of the lease, rent payment instructions, move-in inspection paperwork, property rules, and tenant portal details.
Hopefully, this is the lifecycle step where you’ll spend most of your time. Once your tenant has moved into your rental property, your focus should shift to property management and building a strong landlord-tenant relationship.
Consider how you will address any issues that arise like late rent payments, tenant complaints, lease violations, or emergency maintenance issues. Plan a regular inspection schedule (seasonally is a good place to start) and share the schedule with your tenants. This will help you stay on top of maintenance issues before they become bigger problems.
Tenant turnover is one of the biggest cash flow killers for rental properties, so increasing retention rates will help you in the long run. While you can’t prevent tenants from moving for personal reasons like job relocation or family, you can take a few small steps to keep vacancies at a minimum. Prioritize your landlord-tenant relationships through open communication and timely responses to tenant requests. Stay on top of maintenance and keep your rental priced at a fair market value.
If you find long-term, reliable tenants who pay rent on time and take care of the property, do your best to hold onto them for as long as possible.
6. Ending tenancy
Whenever your lease term ends, you and your tenant have the option to either extend the lease or end your lease agreement. If your tenant is interested in sticking around, you can either move to a month-to-month agreement or enter into a lease renewal with new dates and terms.
Ending a tenancy can be driven by various factors, from a tenant simply wanting to explore other options to the consequences of a lease violation. To end a lease agreement, written communication is required and often must follow state-specific regulations. This goes both ways. If a tenant intends to move, they must provide you with a letter of intent, and if you are ending the tenancy, you must send notice to vacate, usually at a set period of time before the lease ends.
The move-out process is an important step in wrapping up the lifecycle of one tenant before you move on to another. Like move-in, provide detailed instructions on logistics and timing for move-out dates, cleaning, and handing off keys.
Conduct a move-out inspection to ensure the tenant has complied with all requirements and note any maintenance issues that need to be addressed before another tenant can move in. Calculate and return any security deposits promptly.
Like anything in life, the tenant lifecycle and property management steps can be unpredictable and complicated. However, most scenarios will follow this common general outline, giving you a framework to set your expectations.
Along the way, you can anticipate multiple interactions that will define your landlord-tenant relationship. It is important to stay on top of tasks and best practices to effectively manage your properties, build positive relationships with your tenants, and keep your properties profitable.
Contact Rent Portland Homes
For more information about our tenant screening process, or to speak with us about our property management services, contact us today by clicking here.