Working in the industry of property management, I get the opportunity to speak to a lot of owners. Hignell Property Management manages a wide variety of real estate, but often I find myself talking to single-family home owners who are renting out their homes for the first time. They call a little nervous, a little afraid, and have no clue what the process is to rent out their home. Here’s a little about what to expect when renting out your home for the first time.
Step 1: Fill Out Documentation
You signed the property management contract, you’re feeling good, now what? You’re going to need to fill out some additional documents:
- W9 for tax purposes
- Direct deposit form for accounting
- Paperwork to transfer over your homeowner’s insurance policy to a landlord policy
Many companies will also require that you add them as “additional insured” and that you provide a certificate of insurance as evidence.
Step 2: Home Inspection
After all the documentation is finished now it’s on to the actual property itself. We start with a home inspection where we test out the HVAC, appliances, smoke detectors, windows and doors, and faucets. We want to make sure everything is working properly BEFORE we move somebody in. The worst thing is moving a new resident into a rental unit and having something malfunction right off the bat. That’s not the best way to start off.
Step 3: Cleaning
Next we inspect for cleanliness. We’ve all heard the saying “cleanliness is next to Godliness.” This is so true in the world of property management. Every investor wants good residents. Honestly, probably 90% of property management is just getting great residents who pay on time and take care of the property. The last thing you want is sloppy, lazy, messy residents who are constantly a hassle to work with.
If we show a unit, and it’s not 100% clean, desirable residents will notice and not be attracted to your unit. Good prospective residents like things clean, and those are exactly the people you want renting your unit. Therefore clean your unit to the fullest degree! Make sure it smells like lemons when they walk in. Hire a professional cleaning company and make sure you attract the cleanest neat freaks available. Why? Because they keep, and more importantly, leave your property clean.
If your unit is dirty, has some holes in the wall from past paintings that you didn’t fill, the cabinets are dirty on the inside, the windowsills have gunk in them, the baseboards are dusty, etc., then you will most likely attract someone who doesn’t mind that. That just may be the cleanest your unit will ever be if they move in. The condition that you rent your property will be the standard by which the resident will leave your property. Remember that. Start off right and provide a thoroughly clean unit.
Step 4: Taking Photos
After we have a clean unit we’ll come in and take professional photos to use for marketing online. The internet is THE way people find your property. Sure, on occasion people see the “for rent” sign on the front yard, but usually it’s through an ILS (internet listing service). We make sure to post on major internet listing services including, Zillow.com, Trulia.com, Apartments.com, HotPads.com and many others. We also own the listing site HignellRentals.com which sees thousands of visitors a month. It’s important not only to post to many listing sites, but also to have amazing pictures. As a company we have invested in a high-end professional grade camera with specialized lenses. The days of taking cell phone pictures and posting to Craigslist are over for professional managers. You are competing online now, not in person, so to win online you must have the right tools to set your property above the rest.
Step 5: Applications and Screening
When photos are over we are on to collecting applications and screening residents. As I mentioned earlier, the better you screen the more long-term success you’ll have. 90% of your problems will go away when you just get the right residents. We call and interview all previous landlords, check credit, and require proof of income that exceeds three times the monthly rent.
Once an applicant is approved by the owner we begin the move-in process. We utilize a digital platform that allows us to take hundreds of photos of the unit. When we do the move-in inspection with the resident we hand them an iPad where they can scroll through all the pictures. After they have reviewed the photos we have them sign-off that this represents the condition of the unit. We do this because upon the move-out we will go in and take another 100+ photos and then compare and contrast the move-in and move-out condition. If there’s any damage, we have the photo evidence and we can charge the resident for the damages without fear of any arguments.
Moving in is only the beginning! These are the immediate steps that we (and many other management companies) take after being hired. Once we move the resident in that’s where the management begins.