Maybe nowhere does the saying “time is money” apply greater than it does in our industry. For each of us, we are well aware of the expense of having a property sit empty for a month or more, painfully knowing the impact it has on our bottom line. Experience has taught me that in order to protect my investment, I have had to establish hard and fast timelines to ensure that my returns always stay on the positive side of the ledger. This starts right with my first interaction with a potential tenant, all the way through the move-out process.
Here is my counsel on laying out timelines for the first three critical pieces of the rental process:
Completing the Application-
I recommend setting a strict timeline for completing the application. My standard practice is to give the applicant 24 hours from showing the property to complete the application. This ensures that I still have the ability to show the property to other potential tenants without having to wait days or weeks for them to decide if they want the property.
Depositing Funds-
Once the application is approved and we have completed the onboarding process, I require a non-refundable deposit within 24 hours to hold the property. Some landlords like to get the deposit before the application process, but I personally found that refunding that deposit if they are not approved is a hassle and if I can onboard quickly, I have the deposit soon enough with someone I know is qualified. Again, this is up to you to determine, but apply this to all your tenants.
Rental Payments and Moving into the Property-
Although you may see these as the same things, they are very different. This is especially true when it comes to source of funds. With the rise of government involvement in housing, specifically Section 8, they are trying to control the timelines surrounding your property. If you decide to rent to someone receiving government assistance, the process takes two months to complete. In this case, are you willing to give up two months’ rent as you wait and hope that the applicant and your property are approved? For me, I require you pay the first months rent and take possession within two weeks after the lease is signed.
This process may seem obvious to many seasoned landlords. But I have one question, should you put these timelines in your detailed criteria before someone applies? The answer is a resounding YES! With all the tenant complaints and fair housing that is coming against us landlords, sharing your required timelines in a criteria shows that you have a strict, written policy and that treating everyone the same is something you take seriously. Now as a landlord, I know things change, markets change, and if you need to change your timelines in a criteria, then simply document the change and date your criteria sheet. If today you require move-in in 2 weeks, nothing says you cannot change your criteria tomorrow to say 4 weeks if needed; just always, always, always document it.
If you need a sample detailed written criteria, please email us at [email protected] and we would be happy to get a copy to you.
David Pickron