Lender Approval Made Easy With 3 Simple Steps

There are more loan financing options than ever before. Between hard money, private money and personal capital it is easy to forget about traditional lender financing.  Even though banks have gotten a bad rap over the years they are still a very attractive financing option.  The near record low interest rates alone make them a worth a look.  The biggest knocks on bank loans have been the massive amount of paperwork required and the length of time to close.  Banks have recently taken measures to cure these problems.  The application and submission processes have been much more streamlined which has led to quicker closings.  The loan process may have been tweaked but the same basic guidelines are in place.  Here are a few items needed for approval on every bank loan.

1. Strong Credit Scores. Investment loans have some of the most stringent guidelines of any loan program. Due to the fact they are not a primary residence they are considered a much greater risk factor. Because of this they require many items that a primary residence loan does not. One of the first items required is a strong credit score. The floor on investment loans is much higher than any other loan type. Most banks require a minimum 720 score. In terms of credit score rating a 720 is considered excellent. You can pay everything on time and very easily have a score below 720. Not only do you need timely payments but low balances on almost every account. Your 720 score has to be the middle of the three reporting credit bureaus (Experian, Equifax & Transunion). Simply having one of these three over 720 may not be enough to move forward. You can have significant down payment and low debt but if your credit scores are excellent you may have trouble getting approved.

2. High Down Payment. There has been an increase in the amount of loan programs for buyers with limited down payment. FHA and certain conventional loans offer programs as low as 3% down. Unfortunately these are for primary residence borrowers only. With an investment property the down payment is much higher. Depending on the exact credit score you will need anywhere from 20-30% down. Unlike with other loans these funds are required to come from only the borrower’s accounts. No gift funds or non-borrower contributions are allowed. Another potential problem is that the down payment needs to be in an existing account for at least 60 days. This “seasoning” of the funds is done so that no outside money can be used to contribute to the transaction. Any transfers to accounts need to be supported with full statements showing funds going to and from accounts. Documenting of funds can be a tricky process often times filled with multiple statements of paperwork. On these statements if there are any large deposits or withdrawals they will be questioned. Simply having the down payment funds is not enough to move forward. With an investment loan they have to be seasoned and every dollar explained and documented.

3. Low Debt To Income. The third hurdle for loan approval is the debt to income ratio. You may think that having strong income alone is enough to grant loan approval. Strong income is just a part of the process. To calculate the debt to income ratio lenders add up all of the minimum monthly payments listed on the credit score. They will add this number to the proposed monthly housing payment. This is the total debt number. From there they will take the annual gross income and divide that number by twelve. With this they divide your debt by your income. With an investment loan this number typically needs to be around 40%. Calculating income comes with a few hurdles. The first is that you may not document all of the income you receive. Secondly the lender will only use 75% of your total rental income. Even if you have sufficient income to support the loan your debt to income needs to fall under this number. Long gone are the stated income and low documentation loan programs. There may be a lender or two that still does them but the interest rates are nowhere near traditional bank levels. Before you start your loan application you should get a copy of your credit report and see where your monthly liabilities are.

If you have received a pre-qualification letter and loan approval is not an issue you need to consider the benefits. The first is that banks offer by far the lowest monthly interest rates.  If you are considering a hard money loan you can expect interest rates two or even three times as high.  You also need to think about how long you plan on holding the property for.  If the purchase is a quick rehab interest rates may not be as big of a factor.  If it is a rental property that you want to keep in your portfolio for years a 30 year fixed mortgage is the perfect option.  Think about how quickly you need to close and what hurdles you may have to deal with.  If you are looking to close in a short timeframe a bank loan may not make the most sense.  The first step is to talk to your local lender or mortgage broker to see if you are qualified.  From there take each deal on a case by case basis to determine the best financing option.  You never know when you will need, or want, a bank loan.


Buy And Hold Rental Basics

It wasn’t too long ago that buy and hold rentals were the most popular form of real estate investing. While the popularity of this niche has declined in recent years it is still as profitable as ever.  Finding the right rental property in the right market can supply the perfect mix of short term monthly cash flow along with long term benefits.  For as many investors have taken advantage of rentals there are still quite a few who are on the sidelines.  They have heard horror stories about bad tenants, changing market conditions and nonstop management issues.  Even though these are the exception rather than the rule this is the impression that many non-rental owners have.  Deciding on whether a rental property is for you depends on your real estate goals as well as your resources.  Here are a few pros and cons associated with buy and hold rental properties.


  • Monthly Cash Flow. The first benefit of a solid rental property is the monthly cash flow it provides. This should continue for as long as you own the property. What you do with your cash flow is entirely up to you. One month you may allocate some of the funds for property maintenance. The next you can use it to pay down monthly debt. Whatever you choose to do the cash flow received will be higher than the yield you would receive from a savings account. As long as you take care of the property and find good tenants this cash flow should be available for the foreseeable future.
  • Immune To Market Fluctuations. With a long term approach to your rental property you are not as worried about market fluctuations. On a rehab property you are trying to time the market for maximum return. With a rental property you are not as interested in where current property values are. Your goal is to ride out the fluctuations for years until you own the property free and clear or decide the time is right to sell. This allows you to focus on other areas of your business and not stress about the market.
  • Potential Appreciation. With rental property investing the focus is on the future. It is never advisable to buy anything based on the potential value but the possibility is there with a rental property. With your down payment as well as ten years of monthly payments you will eat away much of your principal balance. Most markets have stabilized but still not fully taken off. This means there is plenty of room for future gains and appreciation. This makes for a great retirement vehicle or an avenue of forced savings.
  • Tax Benefits. There are a handful of tax benefits to consider with a rental property. You have the ability to write off a good number of expenses associated with the property. You also can use depreciation in your favor. With the help of a quality accountant a rental property can be a real benefit come tax time.


  • Property Management. To run a successful rental property you need to stay on top of it. It is not enough to simply find a tenant, give them a key and wait for rent checks to roll in. There will be maintenance issues, problems with rent collection and trouble finding the perfect tenants. The best way to solve this is by having a dedicated property manager handle everything. This only works if there is enough monthly cash flow left over to fit it in the budget. Regardless of the property management is always a big concern.
  • Down Payment. One of the biggest hurdles to investment property ownership is the amount of down payment. Most one or two family investment properties require a down payment of anywhere from 20-25%. This is in addition to the closing costs and prepaid property tax requirements. Once you get into the property you still need funds for repairs, applications and monthly maintenance. With a long term approach you may not get your money out for several years.
  • Vacancy Concerns. As a rental property owner you are only as good as your tenants. You can do everything else right but if your tenant stops paying you are in trouble. The threat of a vacancy is always in the air with a rental property. You are only one month away from things getting turned upside down. If you are forced to deal with an eviction not only do you lose the current monthly income but it changes the way you view the property. One bad tenant can have an impact that lasts several months.
  • Cash Investment. There is an old expression in real estate that cash is king. When you have a rental property your cash is tied up and at the mercy of the market. Even putting down a large down payment does not necessarily give you the option of taking it out if you need to. Many lenders have made second mortgages or refinancing very difficult to obtain. Plus, there is no guarantee that property values will rise in the future. If you are thinking about a rental property be prepared to have your cash tied up for many years.

There are many investors who have made great amounts of income through rental properties. These investors are more concerned about ten years from now rather than what will happen in the next 60 days.  Rental properties can truly change your portfolio for the better but are not without some downside.  Before you commit to a buy and hold property you should know exactly what you are getting into

– See more at: http://www.cthomesllc.com/2016/04/buy-and-hold-rental-basics/#sthash.YBf0j29h.dpuf

Building And Developing Your Wholesale Buyers List

Building and developing a strong buyer list is one of the keys for any new wholesaler. You can have a great deal but unless it sells it doesn’t make a difference.  Like any other aspect of the real estate business strength is in numbers.  The wider your net is the better chance you have of attracting a buyer.  Fortunately, it is easier than ever to build your list.  There are a few simple things you can do generate interest.  From there you need to turn that interest into actual deals.  Wholesaling deals are a great way to generate income but you need to have a strong buyers list.  Here are a few ways to build and develop your list.


  • Personal Contacts. When looking to build your list the very first thing you should do is look at your personal contacts. You may be surprised at just how many people you know have an interest in real estate. Start by making a list of everyone you know. Be sure to include any friends, family, co-workers, ex-coworkers and anyone you know. There is no reason to leave anyone out. You truly have no idea who may have an interest in real estate or know someone who does. Take your list and email every address available. The email should state that you have recently begun investing in real estate and may have access to deals in the area. If they want more information to give you an email or call back. It really doesn’t need to be much more elaborate than that. You will get your share of skeptical emails but the handful that do respond are the ones you should focus on.
  • Professional Contacts. If you have been in the real estate business for any time you should reach out to your contacts. Every real estate agent, attorney, mortgage broker and fellow investor probably knows someone that buys real estate. Just as you did with your personal contacts start by sending them an email. With this list you should be prepared to answer more specific questions regarding locations and price points. There may be a question or two of how you find your deals or what you may be looking for. It is important to track every response that gets back to you.
  • Bandit Signs. There are other ways to build your buyers list other than the people you know. Every bandit sign that says “we buy houses” is a potential opportunity. Take the time to call each bandit sign you see. There will be a few calls that will be annoyed that you called but for the most part the response will be positive. You aren’t selling anything. All you are doing is giving them an opportunity to potentially get a great deal on a property. If they want to take it fine, if not there are other buyers out there.
  • Real Estate Websites. Between Craigslist, Trulia and Postlets you can find a handful of potential buyers. On Craigslist alone you should be able to add to your buyers list. Every post from a seller could be from a potential buyer. Take a few minutes every day and reach out to these posts. The same is the case with rental listings. You never know which rental property owner is also an active buyer. The only way is to find out. The worst thing that they can say is no.


  • Track Responses. Getting responses from your calls or emails is great but you need to do something with these leads. The best way to quickly sell a wholesale deal is by having motivated buyers. The only way to gauge motivation is by tracking your results. Everyone that responds should be sent a small questionaire asking questions about price points, locations and types of properties they are looking for. You don’t have to make this too long but you do want to get an idea of what they may be looking for. The more you know about your buyers tastes the easier it is to find deals they may be looking for.
  • Keep In Touch. Your communication shouldn’t stop after your initial email. Once you build your list you should keep in touch every few weeks. A monthly newsletter is a nice way to keep your name on the mind of potential buyers. Anyone that doesn’t want to remain on should have the option of opting out. Even if there is no response at all you should continue sending these out. The odds are that most recipients are reading your emails but may not have an interest in buying at the current moment. The longer you keep with it the more interested they will be when they are ready.
  • Set A Meeting. You can’t expect buyers to work with you unless they have a good idea of what they are getting into. A meeting will often put them at ease. You don’t need to have a fancy dinner to get your point across. Something as simple as a cup of coffee can be just as effective. What you eat is not as important as the information you provide. The more transparent you are the more comfortable they will be. If there are questions you should ask if they want to meet rather than answering them over the internet. A face to face meeting is a great way to make a prospective buyer feel comfortable.

A strong buyers list will make your job as a wholesaler as easy as possible. Developing this list is usually a cultivation of actions over time.  By doing something every day to develop your list you will slowly see the results.

– See more at: http://www.cthomesllc.com/2016/04/building-and-developing-your-wholesale-buyers-list/#sthash.itPJu4N1.dpuf

8 Professionals You Need On Your Investing Team

In real estate you are only as good as your weakest link. You can have all the motivation in the world but you need a good team around you to make it happen.  Even though you may invest individually you need the support of the people around you.  Your team consists of many individuals that either help to find deals, evaluates them or protects you every step of the way.  You should take your time to find the professionals that are the best fit for you and your goals.  Once they are in place you should go out of your way to treat them like gold.  Whether you know it or not they all play a big hand in your success.  Here are eight professionals every investor needs on their team.

  • Real Estate Agent.   A good real estate agent does more than to just help find potential deals. They have a real understanding of what you want and where you want it. This goes a long way to streamlining your business and making it as efficient as possible. They also influence what number you list your property and how quickly they sell.   You can do everything right with a rehab but unless it sells quickly it doesn’t matter. A good real estate agent should be one of the first team members you have on your team.
  • Inspector. The inspection is one of the final steps you take before you close a deal. You need to develop a relationship with an inspector that you trust. The inspection process is designed to inform the buyer of any defects with the property. A good inspector may go the extra mile and search for problems that may not be available on the surface. Finding an unexpected item can save you thousands of dollars or help get away from a bad property.
  • Builder. You never know when you will need the assistance of a good builder. From time to time you may come across an opportunity to purchase land or build on an existing plot. There is a big difference between managing a rehab and building a property from the ground up. The amount of paperwork and licensing alone can be a real issue. Having a builder that delivers quality work that you can trust can open the door to opportunities you may have never thought about.
  • Mortgage Broker/Lender. Having a mortgage broker on your team can serve a number of valuable purposes. The first is they can often be a great source for new deals. They deal with dozens of applicants every week that may not fit lending guidelines. Their best option is often to sell as quickly as possible. The second purpose is that they can prequalify any potential buyers you have on properties you are selling. Instead of wasting time on offers that will never close you can be more selective and choose the best possible offer.
    • Property Manager. One of the best ways to generate short and long term income is through rental properties. As great as they are they can often be difficult to manage. Instead of self-managing your investments you can utilize a professional property manager. A good property manager frees up time so you can focus on other areas of your business. They will handle maintenance requests, collect rent, review leases and keep an eye on your property. Instead of running to the property every time there is a call a property manager can make your life much easier.
    • Attorney. Every real estate investor can use the council of a good attorney. Not only does an attorney provide advice but they also protect you and your business. They are the ones that review the contract and make sure you are protected. They deal with sellers to push your deal to closing. They also advise best entity protection for your business. A good attorney is the last line of defense on many deals and will offer piece of mind to help you sleep at night.
  • Accountant. There is more to being a good investor than just closing deals. You need to be able to monitor your profits and let your money work for you. Here is where a good accountant is important. Many people only think about their accountant come tax time. While they are certainly important in preparing taxes they also help manage funds year round.
  • Marketing Manager. Things have changed in business in recent years. There has been a dramatic shift in how businesses are marketed. You don’t necessarily need to be a tech expert but you should have someone on your team who is. Having someone help with your website or with social media posts can prove invaluable. A large majority of sellers are turning to the internet to start their search. You need to have a team member that will help keep up with the changing technology.

Every networking meeting you attend is an opportunity to grow your team. You should follow up with every business card you receive.  You really never know when you will need to add someone new to your team.  Your team members often go a long way in determining your success.  Investing in real estate is difficult enough by yourself.  Surround yourself with the best possible team.

– See more at: http://www.cthomesllc.com/2016/03/8-professionals-you-need-on-your-investing-team/#sthash.XzleMnNW.dpuf

4 Advantages Of Multi Family Investing

There is more than one way to invest in real estate. One of the most intimidating hurdles in the real estate world is taking the leap to multifamily investing.  The common thought is that with increased units comes increased risk.  The reality is that the opposite is often the case.  Sure, multifamily properties can be more difficult to obtain but are often far less risky than single family properties.  In fact the rewards often outweigh the risk. There is nothing wrong with single family investing but multifamily properties should not be blindly ignored.  If you are on the fence as to whether or not multi’s are for you here are four advantages of multifamily investing.

  • Cash Flow. On a single family property you have one rent coming in. With multifamily properties there is almost no limit as to the number of units you can have. When most people think of multifamily investing they usually think of a two or three unit house. Multifamily investing also includes commercial, mixed use and apartment rentals. On a large apartment complex you can have 100 units or more. This increase in units directly increases your cash flow. This doesn’t necessarily improve your net income but your cash flow amount is much greater. Increased cash flow reduces risk. With a single family property if your tenant stops paying you have no cash coming in. On a ten unit property if one tenant doesn’t pay that is only 10% of your total units. While this scenario isn’t ideal it is much easier than dealing with an eviction and trying to offset the entire monthly payment. This alone makes it much more of an attractive investment in relation to a single family property. A single family property may be easier to sell but a multiunit property is less risky partially due to the increased cash flow.
  • Competition. If you have avoided multifamily properties for years you are not alone. In fact you are much more the norm than the exception. Once the extra unit or units are added to the mix many investors run for the hills. This greatly decreases the competition for these properties. Like anything else in the real estate world the less competition the easier the property is to acquire. Instead of competing with a dozen other investors for a property there may only be one or two interested people. On large apartment and commercial complexes there is often little to no competition at all. There are other hurdles to acquire these properties which are largely financial but reduced competition allows you to streamline the process. Instead of wasting time on single family properties that you may not end up getting your due diligence can be rewarded. Anytime competition is reduced it greatly increases the chances you can get a property you really want.
  • Management. One of the most common reasons that investors shy away from extra units is the perception of increased work. As crazy as it may seem you may actually end up working more on a single family property than you would on a ten unit. There are many single family owners whose cash flow is paper thin. Instead of spending money on property management they are forced to do everything themselves. Every time the phone rings or something needs to be fixed they are the ones handling it. Over time this becomes too much to bear and they look to simply get out of the property. With multifamily properties the increased units give you increased cash flow. This gives you the option of hiring a property management company to take care of the property. You will still get the occasional phone call but you don’t need to hop in your car every time the toilet clogs. Your property will pretty much run on autopilot while you focus on other areas of your business.
  • Appreciation Potential. One of the golden rules of real estate investing is never count on appreciation. This is true regardless of the number of units. While your focus with multifamily properties isn’t necessarily on appreciation there is greater upward potential. With a single family property you are at the mercy of the local market. You may have made great improvements and have strong cash flow but it doesn’t necessarily translate to increased value. With most multifamily properties comparable listings and sales are far less important. Buyers look at certain rental formulas and calculations to determine value. If the property is running at maximum cash flow and the local area is on the rise your property will appreciate. In most cases the appreciation levels are much greater with the more units you have. Some of the wealthiest in the world have accumulated their wealth with multifamily properties. Increased appreciation is never a guarantee but the potential is much higher with increased units.

While there are some differences in single and multifamily investing the process is essentially the same. You are still looking to generate rental income which relates to value.  Like anything else you do in real estate you need to be comfortable with how you invest.  If a multifamily opportunity presents itself don’t dismiss it solely based on the additional units.  Once you close your first multifamily deal you will discover that it was often much easier than you anticipated.


7 Inexpensive Ways To Find Sellers

The best real estate investors understand the importance of a keeping a full pipeline. Closing a deal today is great only if you can find ways to build on that momentum.  In almost any market there are motivated sellers.  The key is to constantly strive for ways to find them.  One of the misconceptions in the real estate business is that you need to spend thousands of dollars on marketing.  Pricey direct mail campaigns can be effective but there are other less expensive alternatives available.  Given these price points you can afford to try a combination of some or even all of them.  Here are seven inexpensive ways to find sellers.

  • Expired MLS Listings. One of the best ways to build your business is with a real estate agent. A quality real estate agent has multiple outlets for finding sellers. Most investors use their realtor to help with foreclosure and REO listings. These deals can be profitable but they are also very popular. An alternative to this is expired MLS listings. There are listings that have been on the market typically for several months. After anywhere from 90 to 120 days the listing will expire and either need to be renewed or is taken off the market. These sellers may have mispriced their property or were simply looking to gauge interest. Either way they may be frustrated and looking for any offer to get the ball rolling. You never know what you will get when reaching out to expired MLS listings.
  • Classified Newspaper Ads. There is a large segment of people who grew up relying on newspapers as their prime source of information. While newspaper popularity is down they still reach thousands of eyeballs every day. The classified section in your local newspaper has multiple options for finding sellers. The first is to reach out to all rental listings. Focus on ones with out of market area codes. An out of state landlords may be frustrated with the process and interested in selling. The classified section also has homeowners or investors who are looking to sell. You may talk to a few disgruntled owners but all it takes is one who is willing to make a deal.
  • Email Contact Lists. Every email you receive from a business card or personal contact should be put in a separate file. It is important to stay updated and relevant with these contacts. Every few weeks or so you should send out an email just to keep in touch. This email could include a newsletter or something else of relevance but the point is to keep you on their mind. You never know when one of your contacts may know someone who is interested in selling. The chance of closing a referral lead is much greater than any other type of lead you will generate. Every week you should look to add someone else to your file. The more people you can reach the greater the odds of finding a deal.
  • Mortgage Brokers. Mortgage brokers are a great source for motivated sellers. The average mortgage broker comes in contact with dozens of applications every week looking to either refinance or purchase. Some of these borrowers may not fit lender guidelines and selling is their best option. Since they know that their options are limited they are more likely to sell at a discounted number. On the flip side you can share any homeowner information on properties that you are selling. Every investor should have at least one solid mortgage broker as a contact.
  • Bandit Signs. Bandit signs are the small signs you see on various front yards. This being an election year they are especially prevalent. Instead of promoting your favorite politician you can market your business. Your bandit sign and read anything from “we buy houses” to “quick, cash closings.” Whatever slogan you want to use can be placed on these signs. You can typically purchase hundreds of these signs for less than the cost of a good dinner. These can be placed on any properties you current own or in select locations with town approval.
  • FSBOs. FSBO is the acronym for “for sale by owner”. As the name indicates these are owners who are selling their property without the assistance of a real estate agent. They may be looking to save money on real estate commission or simply feel they can do as good a job. Many FSBO properties try testing the market at an inflated market price only to come down after several months. With the inactivity they often entertain almost any offer that comes in. Working with fsbos often takes several months but the payoff could be receiving a great deal.
  • Driving For Dollars. Finding deals is often as easy as driving for dollars. You can spend a few hours every day driving an area of the market. Make note of any distressed looking properties you see. You can often find the owner through a tax search at town hall. From there reach out to them explaining that you buy investment properties in the area. They may have thought about selling but aren’t sure the easiest way to go about it. Driving for dollars just a few hours a day will often yield a handful of live leads.

Marketing and lead generation is a numbers game. The more leads you have the better chance you have of closing deals.  If you are looking to build your pipeline start by focusing on these seven inexpensive ways to find sellers.


7 Steps To Keep Your Rental Property Occupied

It takes great management to run a successful rental property. One of the most important aspects of rental property management is avoiding vacancies.  Every month that rental income is not coming in directly costs you money.  In most cases these vacancies can be avoided with proper marketing.  There are several little things that you can do that will generate interest to your property.  If you wait until the last minute to find tenants you are playing with fire.  Here are seven simple steps you can take to keep your property occupied.

  • Start marketing early.   It is never too early to find your next tenant. You should always keep your ears open for who may be looking for a rental down the road. Stay in contact with local real estate agents and mortgage brokers. Don’t be afraid to ask them if they may have someone looking for a rental. In addition you should give yourself plenty of time to find someone. Once you are under two months you should start making posts on social media and placing bandit signs in your yard. You can also focus on Craigslist, Zillow and any other website that has worked in the past. The longer you wait to get started the more likely you will be forced to pick the best available tenant.
  • Price right. Regardless of your property or the location price is important. It is often the first item that potential tenants look at. Even if you made improvements you need to look at other rentals on the market. A new dishwasher may look great but it probably won’t add the value you are looking for. You need to price your rent according to how it compares to what else is on the market. If the amenities are close tenants will usually opt for the rental that is less expensive. Do some homework on your market and price your rental accordingly.
  • Highlight positives. With whatever kind of marketing you do you control the narrative. A prospective tenant doesn’t know anything about your property other than what you choose to present. It is up to you to put the property in the best possible light. Start by highlighting all of the positives. If you are one of the few rentals in your market with a third or fourth bedroom make that easily known. The same should be done with any amenities. Focus on items that you think a tenant would find appealing. A deck, garage, driveway, fireplace or new appliances should all be highlighted. Think about what makes your property stand out and drive that home throughout your marketing.
  • Pictures/video. Positive features may generate interest but you need to support those with pictures or videos. We live in a visual day and age. It is not enough to simply say something we need to support it with images. You need to do more than just snap off a couple of pictures and put them on a website. The quality of the pictures is important. Start with a picture of the front of your property. This is the first impression they will have. From there you need to include pictures of all the rooms in the house. The angle of which you take these pictures can make the room like big or small. If you don’t have experience with these or don’t have the right camera it is important enough to consider hiring someone that does. If the pictures are poor the response will be equally as bad.
  • Bonus features. Are there any features that make your property stand out? Do you include heat and hot water with the rental? Is snow removal and lawn maintenance included? Are there a washer & dryer on site? These are the seemingly small items that can be put your property to the top of the list. These may not seem like a big deal to you but they need to be mentioned. Something as simple as basement storage can be a big factor. Anything that you can think of that may be considered a bonus should be included.
  • Create action. The closer you are to the end of your current lease the less leverage you have. If you are in this situation you need to create action. One way you can do this is by offering something of value if they act within a certain timeframe. Free cable for a month can be a good way to get your phone to ring. Even if you don’t want to give up anything of value you need to create a sense of urgency. Phrases like “property won’t last long” or “act now” may give you the little push that you need.
  • Contact info. Dealing with tenant phone calls constantly can get annoying at times. This is nothing compared to dealing with a vacancy. On every ad you place either in print or on a website you need to include multiple contact options. Leaving an email address is not enough. You need to include your name and phone number as well. People are more likely to call if they are interested than send an email. When you get incoming calls you need to answer them. You never know who will be the call that turns into a tenant. You can’t wait for a tenant to leave a message and call back when you feel like it. By the time you call they may have already spoken with three other landlords.

Finding a tenant usually does not happen on its own. You need to put some work in to keep your property occupied.  Following these seven steps will greatly improve your chances of never having to face a vacancy again.


The Perfect Lease From Beginning To End

As a rental property owner you are only as good as your tenants. You can do everything right with the property but if your tenants are poor it won’t make a difference.  Dealing with tenants is more than just handing them a key and waiting for checks every month.  They should fully understand expectations and guidelines but are given enough space to enjoy the property.  At the end of the lease they should either want to renew or give a glowing review of you and the property.  To achieve this there are a few simple steps you need to consider during the course of the lease.  Here are some things every landlord should do as they strive for the perfect lease.

  • Lease/Walk Through. The relationship with your tenant starts with the initial conversation. Every applicant that reaches out to you is a prospective tenant. You should treat everyone that calls as if they are going to be living in your property for the next nine months. After you receive their application and commit to renting you need to review the lease. This should be sent through email and reviewed at the property. It is very important that you take time and go through your lease line by line. This can be tedious but will cut off any potential questions before they happen. Also when you are at the property you should walk the grounds and take pictures to note the condition before they move in. This may come in handy at the end of the lease.
  • Set Firm Guidelines. As you review the lease you need to make note of any items that are of particular importance to you. If you are adamant about keeping the property pet or smoke free you need to reiterate this. You may also have concerns about parking or the number of tenants allowed in the property. Whatever is important you need to make this crystal clear. You also need to attach a punishment for breaking these rules. These could range from a small penalty for a late payment to eviction. Let these guidelines and penalties be known up front so there is no misunderstanding down the road.
  • Scheduled Periodic Checkups. Most leases contain language that allows the owner to enter the property at any time. Just because it is allowed doesn’t mean you should do it. In every lease you should schedule a walk through every five months or so. Give your tenant at least two weeks’ notice. The point of this isn’t to check on your tenants but to make sure that everything in your property is running properly. Your tenant may not tell you that the downstairs toilet runs from time to time or back door doesn’t close all the way. These are the little things that if caught early enough could save you hundreds of dollars. If you explain it to your tenant this way they won’t think you are checking up on them.
  • 60 Day End Of Lease Notice. At your lease hits the home stretch you need to think about the end. Start by giving your tenant at least 60 days’ notice. As obvious as it may seem to you your tenant may not know when the end of their lease is. Giving 60 days’ notice serves a few purposes. The first thing is that it gives your tenant a chance to renew their current lease. If you have a good tenant there is no reason to look anywhere else. Ask them if they have any interest in staying for an additional term. If not a 60 day notice gives them a heads up to begin preparing themselves, and the property, for move out day.
  • 30 Day Notice. If a 60 day notice is a wakeup call a 30 day notice is an alarm. With your 30 day notice you should supply a detailed list of items and expectations needed for move out day. These should be on the lease but need to be reiterated again. As simple as it sounds you want the property in the same condition as they found it. There will always be normal wear and tear that is expected but you don’t to pay to have the property restored. By giving a detailed list, along with photos, of the expected condition you leave no doubt as to what you want done.
  • Walk Through/Key Exchange. On the lease move out day you will walk the property with your tenant and exchange keys. Your tenant will probably ask for their security deposit on the spot. It is important that you tell your tenant if they want to be with you at the property that you are going to be a few hours. This is your chance to try all appliances and examine the property. Once you give back the security it is too late if you find something after the fact. You shouldn’t nickel and dime your tenant but you don’t want to have to pay to repair an item either. If you are satisfied with condition you can cut a check on the spot but you have up to 30 days after the lease to do so. Keep in mind that positive word of mouth is important and you never know who your tenant may know.

The key to a successful lease is to respond as quickly as possible to whatever comes your way. By staying on top of these six areas alone you greatly increase your chances.