You are reading: How to Improve Lease Quality
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As a property manager, ensuring the quality of your leases plays a pivotal role in attracting and retaining great tenants. Lease agreements set the foundation for a positive landlord-tenant relationship and provide a legal framework for both parties. This blog post will explore strategies and best practices for improving lease quality to attract good tenants, avoid bad ones, and provide an exceptional leasing experience.
Create a High-Quality Lease
A high-quality lease is what keeps everything running smoothly and helps prevent headaches down the line. A good lease is like a security blanket – it’s there to protect you when things inevitably go wrong (because, let’s face it, they will at some point). Without a solid lease in place, you’re essentially flying blind and leaving yourself open to all sorts of potential problems. And let’s be real; nobody wants to deal with those. So do yourself a favor and invest the time and effort into crafting a lease that covers all the important bases. Your future self will thank you.
Your lease should encompass the following elements to protect both the property manager and the tenant. These elements include:
- Parties Involved: Clearly state the names and contact information of the property manager/landlord and tenant(s) involved in the lease agreement.
- Property Description: Provide a detailed and accurate description of the rental property, including its address, unit number, and any specific amenities or restrictions associated with the property.
- Lease Term: Specify the start and end dates of the lease term. Clearly outline any renewal or termination provisions, including notice periods and procedures. You don’t want your tenant to be confused about how much notice they need to give if they want to renew.
- Rent and Payment Terms: Clearly state the monthly rental amount, the due date for rent payment, and accepted payment methods. Include any penalties for late payments and details on how rent increases will be handled.
- Security Deposit: Outline the security deposit amount, the conditions under which it can be withheld, and the process for returning the deposit at the end of the lease term. You may have tenants that have a roommate move out during their original lease term. You’ll want to specify how the security deposit is handled in these circumstances.
- Maintenance and Repairs: Define the responsibilities of both the landlord and the tenant regarding property maintenance, repairs, and reporting procedures for maintenance issues. Specify who is responsible for specific areas, such as lawn care or appliance maintenance.
- Utilities and Services: Clarify which utilities or services are the tenant’s responsibility and which are included in the rent. Specify any limits or restrictions related to utility usage or additional charges for excessive use.
- Rules and Regulations: Clearly outline any rules and regulations involving the use of the property, including but not limited to noise restrictions, pet policies, parking guidelines, and building rules.
- Entry and Access: Specify the landlord’s rights of entry, including notice requirements, for reasons such as inspections, repairs, or emergencies. Make sure you are complying with local laws regarding tenant privacy!
- Tenant Responsibilities: Clearly outline the tenant’s responsibilities, such as maintaining cleanliness, preventing property damage, and complying with applicable laws and regulations. I
- Provisions regarding subleasing or assignment of the lease: Outline if subleasing is allowed and what the procedure is.
- Termination and Eviction: Detail the circumstances under which the lease may be terminated by either party, including notice periods, breach of lease conditions, or eviction procedures. Comply with local laws and regulations regarding eviction processes.
- Legal Disputes: Include a clause specifying the jurisdiction and venue for resolving any legal disputes related to the lease agreement. Many leases include an arbitration or mediation clause as an alternative to litigation.
A great idea is to use a standardized lease template, customize it for your property, and consult an attorney to ensure it adheres to all necessary federal, state, and local laws. A good lease agreement should be written in clear, understandable language to avoid confusion and protect the rights and interests of both parties involved.
Top-Tier Tenant Screening
Once you’ve got a solid lease, it’s time to implement a rigorous screening process! A good screening process helps identify responsible and reliable tenants who are more likely to adhere to lease terms and keep the property in good condition. It also can help reduce the risk of potential issues such as late payments, property damage, or eviction.
A good tenant screening process should include the following elements:
- Credit Checks: Review the applicant’s credit history to assess their financial responsibility and identify any potential red flags, such as outstanding debts or a history of late payments.
- Background Checks: Conduct a comprehensive background check to verify the applicant’s identity, check for criminal records, and ensure they do not have a history of eviction or any other problematic behavior. Remember that some states do not allow criminal background checks, so be sure to check your state laws before including this in your process.
- Employment Verification: Verify the applicant’s employment status, income stability, and ability to meet the financial obligations of the lease agreement.
- Rental History: Contact previous landlords or property managers to obtain references and gather information about the applicant’s rental history. This includes evaluating their adherence to lease terms, payment punctuality, and overall reliability as a tenant.
- Income Verification: Request proof of income, such as recent pay stubs or tax returns, to assess the applicant’s ability to afford the rental property.
- Eviction Records: Check for any eviction records or legal disputes related to previous tenancies. This can help identify applicants who may pose a higher risk of potential eviction or lease violations.
One of the most important things to remember when creating your lease and tenant screening process is to adhere to all relevant laws. This includes federal Fair Housing laws and state and local laws that affect tenant and landlord rights. Ensure that all aspects of your tenant screening process comply with fair housing regulations to avoid discrimination based on race, religion, gender, national origin, or other protected classes.
Lastly, apply the same screening criteria and process to all applicants to maintain fairness and avoid potential legal issues related to discrimination.
Attracting Good Tenants
Now that your processes are in place, it’s time to attract great tenants! The key to achieving this goal is to deploy effective marketing strategies and improve your property presentation.
First, focus on marketing your property. Showcase the unique features and amenities of the apartment complex via professional photography and engaging property descriptions. Highlight attractive community amenities such as fitness centers, swimming pools, or workspaces to capture the attention of potential tenants. You should always leverage social media and listing websites to reach a wider audience and maximize exposure, too!
Next, offering competitive rental rates and lease terms can help you attract and keep tenants. Conduct market research to understand local rental trends and competitor pricing. Offering different lease terms can help attract tenants that need a little flexibility. While the one-year lease is standard in this industry, providing multiple options can help you stand out amongst other apartments in your area.
Lastly, incentives like move-in specials, discounted security deposits, or utility packages can further entice renters. Don’t forget to communicate all of these advantages in your marketing materials. Make it clear to potential renters that your property is the best property!
By employing these strategies, property managers can attract great tenants to their apartment complex, resulting in higher occupancy rates, lower turnover, and a positive living experience for all residents.
Avoiding Bad Tenants
On the other side of the coin, it’s just as important to avoid problematic tenants. Remember that tenant screening process we talked about? That will be your best defense against tenants that could pose a risk to your property.
A bad tenant is generally someone who possesses qualities that can negatively impact the rental property, other tenants, or the property manager. Some common characteristics of a bad tenant can include:
- Payment Issues: A bad tenant often has a history of late or inconsistent rent payments, which can disrupt the landlord’s cash flow and cause financial strain.
- Property Damage: A bad tenant may show a lack of care for the rental property, resulting in excessive or intentional damage to the premises beyond normal wear and tear.
- Violation of Lease Terms: This includes breaching lease agreements by subletting without permission, exceeding occupancy limits, engaging in illegal activities on the premises, or causing disturbances that disrupt the peace and quiet of the community.
- Legal Issues: A history of evictions, lawsuits, or legal disputes related to previous rental properties suggests a potentially bad tenant who may not honor the terms of the lease agreement or abide by legal obligations.
- Unauthorized Pets or Occupants: Violating pet policies or allowing unauthorized individuals to reside in the rental unit without proper approval can disrupt the property’s balance, exceed occupancy limits, and create potential liability issues.
- Inconsistent Employment or Financial Instability: Unstable income or a pattern of frequent job changes can indicate a higher risk of rent payment issues or inability to meet financial obligations.
- Negative References or Background Check Findings: Poor references from previous landlords, negative rental history, criminal records, or a history of disruptive behavior can be indicators of a bad tenant.
Another sign of a bad tenant is submitting fraudulent application information. This is when a tenant provides false information on their bank statements or pay stubs, making it appear as though they are financially qualified for your unit when they really aren’t. This can be a huge headache for property managers when undetected, often leading to messy eviction proceedings.
But how can you tell when a tenant is doing this? These document alterations are often impossible to see with the naked, untrained eye. That’s where Snappt comes in! Our software is designed to verify the authenticity of pay stubs and bank statements. We catch over 99.8% of fake documents, reducing potential future bad debt & evictions by over 50%! To learn more, visit our website or schedule a demo!
To Sum Up…
Improving lease quality is a fundamental aspect of successful property management. Property managers can successfully attract and retain high-quality tenants by implementing effective tenant screening processes, attracting good tenants through strategic marketing, and avoiding problematic tenants.