When you're adding rental properties to your real estate portfolio, it's important to understand the leasing process. Without finding good tenants quickly, you'll lose money!
Whether you're a seasoned residential property investor or you're interested in adding buy-and-hold rental properties to your portfolio, make sure you understand how to find tenants through marketing best practices, create a rental lease agreement, and help renters move in so you can start collecting monthly rent payments.
What Does the Leasing Process Involve?
First things first: real estate investors need good properties that attract quality renters and generate long-term revenue. One of the best ways to do that is through the Privy platform. A real estate investor can set the criteria for an ideal investment property, then Privy goes to work scouring the MLS to deliver those deals to their inbox, along with expert investor insights.
So, with a real estate portfolio that includes high-performing rental properties, what's next for the leasing process?
Prepare the Property for Tenants
In many cases, a rental property isn't "tenant-ready" immediately after closing. Depending on your preferred markets, rental properties could need renovations or updates to help attract quality renters and command competitive rental prices.
Working with a local property manager is an excellent way to identify updates and make-ready tasks ideal for each rental unit to maximize long-term revenue.
Set the Monthly Rent Amount
Before listing a property, make sure to conduct rental market research to determine the ideal monthly rent amount. Setting the right amount helps investors maximize returns and attract good tenants. Note that it's crucial to determine a rental rate before listing a property and creating a basic lease agreement for new rental property tenants.
Staging, Photos, and Listing
With a rent amount and rental-ready property, it's time to find tenants! However, listing the property isn't as easy as posting on free listing sites and hoping the right tenants find your rental property.
Property managers can be helpful when it's time to market a property. If you've added a marketing assistant to your real estate investing team, they can also help coordinate staging, hiring a professional photographer, and creating a compelling listing that gets noticed online.
Screen Applicants and Choose a New Renter
An excellent property and good marketing should deliver plenty of applications for your property. If you're new to buy-and-hold rentals, this can be a bit overwhelming! However, it's critical not to choose the first applicant that looks good without a thorough screening process.
Depending on the markets where your rental properties are, a property manager can also be a big help throughout this part of the leasing process. They'll know how to spot a potentially bad tenant and what to look for in an ideal resident--before anyone signs a simple one-page lease agreement!
Taking time to thoroughly screen potential residents can help property investors avoid costly mistakes and problems with bad tenants.
Finalize the Rental Agreement
With new tenants ready to move in, it's time to review and finalize your standard lease agreement. Take time to go over the document with your new tenants and make sure everyone understands the responsibilities and rules for the tenancy.
It's crucial that the lease is thorough to avoid confusion and prevent potential problems. With an airtight rental contract, real estate investors have the legal documentation they need to enforce the rules and protect their investment properties!
Hand Over the Keys (and Start Collecting Rent)!
With all signatures on the residential lease agreement, property owners can hand the keys to their tenants and provide move-in details. The leasing process is complete once the lease is signed and executed. However, your job as a good landlord is ongoing.
Investors that choose buy-and-hold investments must keep properties in excellent condition with ongoing maintenance, collect rent payments every month, plus work hard to retain long-term tenants and reduce vacancy times when renters move out. It's also important to review lease agreements from time to time and make necessary updates to comply with changing landlord and tenant laws when it's time for a new lease term.
Hire a Leasing Agent or Property Manager
Most successful investors that operate rental properties do so with the help of local leasing agents or property managers in the markets where they own these investments. Leasing professionals make it possible to generate ongoing passive real estate income—no matter where you choose to invest—without the stress of actively managing multiple properties in a growing real estate portfolio.
Privy Helps Real Estate Investors Find Excellent Rental Properties for Success!
Before creating a rental lease agreement, you need good properties to operate as rental units! Privy is the best resource for insights into multiple markets. We help investors throughout the country find the best deals on buy-and-hold investments that can generate the returns they need to reach long-term goals.
If you're ready to try your hand at operating rental properties, let Privy help you find the properties you need! Reach out soon to learn more about the Privy Advantage.
Learn everything you need to know about strong lease agreements in our free ebook, “The Ultimate Guide to Lease Agreements.”