Crucial Rental Practices Prior To Occupancy


Congratulations!  After spending lots of time and money advertising and showing your rental, you now have found someone to rent the home.  Prior to occupancy, what do you do to make certain that the relationship you are about to enter (landlord/tenant) is a good one?  I wish I could promise you that all landlord/tenant relationships will go great if you follow these steps.  If anyone ever promises you that they have never actually been a landlord!  The point of these important practices prior to occupancy is to significantly increase the probability that you are entering a great, mutually beneficial relationship.  If things do not go as planned, taking these steps prior to occupancy will provide a much smoother end to the relationship.

Proposed Tenant Completes a Thorough Application:

The primary purpose of your application is to provide the information you need to screen the tenant.  The second purpose is to acquire information that you may need to  locate your tenant if they disappear.  I continue to be surprised at what some landlords and property managers are willing to accept as an application.  You are getting ready to move strangers into a home you own!  The applicant owes you a willingness for complete disclosure.  You need to confirm and verify.  If not, you may end up sorry.

Collect A Security Deposit

This deposit is non-refundable and should be due at the time the lease is signed.  Some landlords require the security deposit within 24 hours of a tenant being accepted. Let the approved applicant know that you cannot hold the property for them so if they want to lease it they will need to sign a lease and pay their deposit immediately.  The lease start date can be several weeks in the future, depending on the applicant’s needs and your comfort.  The key is to collect funds now, supported by the lease, to document those funds are the owner’s to keep if the tenant changes their mind.

Sign A Strong Lease Agreement

You can get a state-specific lease agreement on-line, from an office supply store, or my favorite, a local attorney!  Each state has different rules and laws that govern the landlord-tenant policies in that state, so chances are a lease found for free online may not be legally binding for you. A strong lease is something that you will be thankful for many times over.  Unfortunately, the ease of availability of lease documents has allowed for some pretty bad situations that could have been avoided if money had been invested in a binding lease.  Having a strong, loophole-free lease agreement is probably the most important aspect of maintaining good, long-term tenants who treat your property the way it deserves to the be treated.  Also, when the new tenants are signing the lease be sure and obtain a copy of their photo ID for your files.

Document Move-In Condition With Photos

Prior to a new tenant taking occupancy of a property we photograph the entire premises.  Our pictures make note of any item that might, upon tenant move out, become a question as to whether specific damage was caused by the tenant such as a large scratch on a counter top.

A complete, thorough library of pictures date stamped before occupancy, provides insurance against many disputes.  Tenants often wish to argue about a security deposit deduction.  Knowing these pictures exist, and actually sending them a before and after picture, often puts an end to that discussion.

A thorough library of before and after images also provides a nice history of a rental  property if it is ever needed.

Document Move-In Condition With A Report

It’s now important to do one final thing before handing over the keys: the move-in condition report.

The move-in condition report is simply a paper that the tenant will sign that documents, in detail, the condition of the property. Allow the tenant to take some time walking through the property and inspecting it – letting them take notes of the condition of each room. If there is a hole in a door – document it. If there is a light switch that doesn’t work – document it. If there is a stain on the carpet – document it. The move-in condition report is designed to protect both your interests and the interests of the tenant when it comes time for the tenant to move out.  It also is a list for customer service as these items could likely be easily fixed, giving your new tenant a nicer place to live.

As much as you might think you’ll remember every detail of the home – you won’t. By documenting everything and having the tenant sign-off on that documentation, the tenant can not come back to you next year and say “oh – the giant hole in that wall was already there.”

A move-in condition report, combined with pictures (or video) make for powerful evidence if a landlord needs to defend their actions regarding charges to the tenant. In many states, a landlord can not deduct any charges from the security deposit if a move-in condition report was not filled out when the tenant moved in. Do not make this mistake – document, document, document.

Provide Keys

When the tenant has filled out the entire lease agreement,  both parties have signed it, paid a security deposit, photos are taken, the move-in condition report has been signed, and the rent has been paid – you can now hand over the keys to the tenant to allow them possession.  Just be sure you have kept a spare set for yourself!

Do Not Let The Tenant Move In Before Every Step Is Covered

Although the tenant may ask – never let a tenant move in possessions before signing the lease and paying the rent. The consequences for failing to do this could be disastrous. Be sure that you have made it clear to the tenant the rules you expect, as well as the procedure for paying rent, requesting maintenance repairs, and other details about your house. By training your tenants, you set the ground rules ahead of time and ensure they are aware that you’re not the kind of landlord that they can try to take advantage at every opportunity.

The long-term impact of your relationship with your new tenant will be much more positive if the tenant feels you really care about the home.  A new tenant that witnesses a landlord following these practices prior to occupancy, will at worse think twice before violating the lease, and likely show much more respect to the property and the landlord relationship.  Like so many things in owning rental property, if you don’t feel you can implement and follow these best practices personally, then seriously consider hiring a professional to ensure a positive experience for you and your new tenant.

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