Landlords ask: How to “onboard” a new tenant for my rental property. Here’s the answer.
The term “onboard” in the real estate rental industry means maintaining a clear process to get new tenants signed up. It quickly establishes a working relationship between a landlord and a new tenant.
How to “Onboard” a New Tenant for Your Rental Property
Onboarding new tenants mean winning them over for a good landlord to tenant relationship. The initial quick, frictionless and seamless experience a prospective tenant feels with you accomplishes the onboarding process.
On the other hand. A cumbersome, complex, or time consuming initial experience leads to rejection and off to a competing landlord.
Yet, making a new friend doesn’t mean a “good” tenant.
The best scam artists know how to charm their victims.
Beware of con artist tenants who know the loopholes to stay rent-free until you evict them. Four months free rent until evicted appeals to some scammers. Especially in high rent homes.
Do Your Due Diligence
Let’s face it, renting to strangers means taking on risks. That’s why performing due diligence becomes so important. What do you need to check out with potential tenants?
Here’s a list of things to ask and verify from applicants:
Full name – Nearly everyone has a middle name which helps to separate your applicant from similar names.
Current and past full addresses – You must verify their past addresses. Liars need no further scrutiny.
Current and past employment – Ask for copies of wage stubs, W-2 forms, bank statements showing employment checks or direct deposits.
Past landlords and employment references – Make sure you check out all them.
We published a post here explaining how to screen tenants. Here
Also, you need to do background checks outside of verifying application information. A recent post explains how to do background checks. Here
Create an Onboarding Process
Your onboarding process involves setting up a systemic process to verify all information provided by your applicants. These include:
- Employment verification;
- Rental verification;
- Income verification; and
- References verification.
Onboarding Process Overview
Setting up a system for your onboarding process looks like this:
- Application submission;
- Reviewing the application;
- Explaining and signing the lease;
- First month’s rent & security deposit;
- Follow up;
- Moving in; and
Let’s explore each one.
1. Application submission
Still relying on paper rental applications?
Modernize applications with property management software. Never damage, misplace or lose another paper application again. Go paperless and do yourself and your tenants a favor.
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2. Reviewing the application
Dealing with a large number of applicants takes time. Also, increases your stress as you must read them carefully. Here’s a list of the basic application screening criteria:
ID Check – Doing this yourself amounts to a big hassle. Better to use a certified ID check professional service company. Make a copy of the applicant’s driver’s license, or state-issued ID (if he or she doesn’t drive).
Verify Income – Ask for employer information and paycheck stubs. Pay attention to the pay-to-rent ratio so it’s not too high. Rents typically maintain a ratio of 1/3 to 1/2 and no more.
Credit Check – Look at the previous debt and bad credit in the credit report. Ask for their credit score. Good credit scores range from 670 (Good) to 800+ (Exceptional).
References – Ask for references and contact all them. Previous property managers or landlords contain a wealth of information about the tenant’s behavior and payment history.
3. Explaining and signing the lease
Leases contain confusing legal wording, terms, and conditions. A typical lease contains this information:
- Full legal names;
- Date of the lease;
- Security and other deposits and rent values;
- Late fees and penalties;
- Pets; and
- Cleaning acceptability levels, parking, and noise levels.
Meet and go through the lease with your new tenants. Make sure everyone understands the lease and answer all questions. Either sign in person or send the lease for electronic signatures.
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4. First month’s rent & security deposit
The first month’s rent and security deposit usually collected at the same time.
The security deposit covers property damage caused by the tenant. Also, late, incomplete, or no rental payments.
Make life easier for you and your tenants by creating an electronic payment system.
5. Follow up
Before the tenant moves in make contact to verify moving in date and to answer any questions.
6. Moving in
Hire a professional cleaning service before the move-in date.
Do a thorough inspection of your property before the tenant arrives. Take photos, note the conditions, make a copy of your photos and notes and go over them with your tenant. You and your tenant dates and signs two copies and each keep one.
Fill out a move-in form covering every room and the condition of floors, ceilings, walls, windows, doors, furniture, etc. Also, you and your tenant sign and date two copies.
The final gesture involves handing the keys (include an extra copy of each one) to the tenant.
Keep a record of the number of keys you give. Make sure they are stamped “Do Not Duplicate” so key duplication services know not to duplicate them.
Many property managers give the tenant a small “welcome” gift after the presentation of the keys.
How to “onboard” a new tenant for your rental property begins with quickly connecting with your new tenants.
Starting with the tenant applications you receive. Onboarding becomes a process for signing up new tenants. Winning over good tenants so they sign up with you instead of your competitors.
Finding good tenants means performing your due diligence to weed out the liars and scams.
Your onboarding process involves a system to verify all information provided to you by the applicants like:
- Application submission where a good property management software system saves you time;
- Reviewing the application and verifying all information;
- Explaining and signing the lease and using a good eSign service;
- First month’s rent & security deposit collection using an electronic payment system;
- Follow-up to answer questions for a smoother move-in;
- Moving in where you and the tenant inspect the property and agree in writing on its condition; and
- Keys presented to your new tenant with “Do Not Duplicate” stamp, extra keys in case of loss, and keeping track of how many keys you gave.
How to “Onboard” a New Tenant for Your Rental Property Too Much Hassle?
The above recommendations require setting up a system for onboarding new tenants. If:
- Reading many applications;
- Verifying the information;
- Doing due diligence;
- Buying property management software;
- Paying for an eSign service;
- Buying an electronic payment system; and
- Spending time meeting, interviewing, and inspecting your rental with new tenants becomes too much.
Contact Us to use our professional property management services in the greater San Diego area.
Steven Rich, MBA – Guest Blogger
We hope you like “How to Onboard a New Tenant for Your Rental Property”. To learn more about how to screen prospective tenants and the property management industry check out one of our many Blog Pages.
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WeLease Property Management Company