Should you offer a deal to find new tenants?

Written by Holly Welles on . Posted in edited, For Landlords, Income Ideas, Maintenance & Renovations, Move-in/Move-out, paid, Rent & Expenses, Rental Advertising, Step 5 - List, Advertise & Show

incentivesWhen your property can’t seem to keep reliable tenants, you might start to consider ways of sweetening the deal, such as offering incentives.

Your property may be great, but that doesn’t mean you’re immune to bouts of bad luck with tenants, increased competition, and environmental nuisances like neighborhood construction projects. When the cards are stacked against you, a discount can help speed up the tenant search and reduce the negative financial effects of vacancies.

The benefit of filling your space may very well be worth the added expense, but make sure you first do a cost-benefit analysis by making sure adding an incentive won’t make your total expenses greater than your total income.

Here are seven practical tips and techniques.

1. Reduce your fees

Review your contract to see if you can be flexible with some of your listed fees. Tenants who review your agreement are likelier to sign on the dotted line if they don’t have to factor an excessive amount of additional costs into their budget. For instance, if you charge for amenities such as laundry or parking, the cost of waiving those fees may be negligible compared to the benefit of winning over a reliable tenant.

If you can manage without the extra income, waive the application fee for background and credit checks. Note that if you use Cozy, applicants are automatically charged for this, but you might apply this charge toward first month’s rent as a way to waive the application fee.

Remember that you’re trying to attract tenants. Applicants have a greater justification for renting with you if they feel like they’re getting a deal they couldn’t find elsewhere. The loss in fee collection is minimal compared to the vacuum of an unoccupied apartment draining your resources.

Of course, make sure that you trust the potential tenant and your screening process before going down this route.

Related: Should I raise the rent on a good tenant?

2. Offer discounted rates

Discounted rates are clearly attractive to potential tenants, but this solution requires some careful math on your end.

Evaluate your expenses and the rates offered by your competition. Compare the costs of offering a monthly reduction against those of an extended vacancy, making sure that your property is still profitable with the deal you offer. Do you have the room to lower your rates if it means signing a tenant more quickly?

You could also offer discounts in return for more convenience. If a tenant can pay rent each month through automatic electronic payments rather than physical checks, for example, you can offer a rent reduction for making your financial life a little easier.

3. Consider a longer or shorter lease

Another way you may discount rates is to offer an extended lease for a lower monthly rate. The longer renters stay with you, the more your risk of extended vacancies is reduced.

The point of an extended lease is to keep your renters making regular contributions to your business. Keep an eye on your local market and any proposed tax changes to assess the risk of settling into a longer-term agreement. While you’ll receive less money for your unit, it may prove more consistent and reliable down the road.

On the other hand, some tenants may not be sure if they’ll be sticking around for a full year. If you need to fill a vacancy now, offering a shorter lease that allows for tenant flexibility may prove beneficial. This is especially true if you’re trying to find a tenant in an off-season. If the shorter lease ends in the summer, for example, you’ll have an easier time finding a more long-term renter.

4. Create more flexible terms

Renting an apartment is an enormous commitment, and a strict lease can turn otherwise excited applicants away. If you relax the terms of your agreement, applicants might feel more secure in deciding to sign with you. And there are small, inexpensive changes you can make to your contract to improve its appeal.

Offer a deal to find new tenants who may be perfectly great renters but crave flexibility that other landlords lack. Pet-friendly apartments are enticing to animal lovers searching for a place that accepts their furry friend. Permission to decorate the property may win some prospective tenants over. Others will find an early lease termination clause appealing, giving them a degree of freedom unavailable from your competitors.

Related: Pet deposits, pet fees and pet rent – what’s the difference?

5. Offer upgrades

If you can’t swing a rate reduction, property upgrades can be a powerful incentive for new tenants. Replacing an old oven with a newer model, painting the walls a more modern color, or increasing storage might win over tenants looking for a fresher living space. Property upgrades create value for you, too, since they will make your rental more attractive for years to come.

Be careful not to overspend on a project that will eat away at your profits. After all, you’re still responsible for all maintenance costs down the line. You don’t need to offer lavish upgrades to appeal to new tenants when simple improvements can make an impact. Something as simple as installing more shelving can please a renter without extending your regular budget for new projects.

Related: 7 Affordable Upgrades for Your Rental Properties

6. Put together a gift basket

For those new tenants who have recently signed a lease, welcoming them to your building with a gift basket can be a great first step toward building a friendship. Renters who feel a closer connection with their landlord are more likely to renew their contract once it expires.

It doesn’t have to cost a lot to look like a nice gesture. Gift cards to local restaurants or the movie theatre, food, or a bottle of wine are all possible options when stocking your gift basket. An edible arrangement can make a good impression on your tenants.

7. Provide a free first month

At first glance, it seems like a ridiculous ask of any landlord. Who in their right mind would sacrifice an entire month’s rent? But consider the money lost on an already vacant unit that’s accruing nothing but dust, and a month of waived rent is well worth the income that will begin to flow in afterward.

Related: 3 reasons you might not want to collect a security deposit

When does offering a deal become a gimmick?

Some potential renters are wary of deals, seeing them as “gimmicks” that a landlord uses to attract the naive and gullible. After all, if the landlord has to offer a deal to find new tenants who will stick around, they might think the property suffers from an issue not explicitly advertised.

This is particularly relevant to No. 5 above. Densely crowded urban areas with high rent prices often have apartments that advertise a free month’s rent in exchange for signing a lease. While this isn’t misleading, these concessions can lead tenants to enter an agreement they’re unable to manage.

As a landlord, you need to fill your rentals. The fortunate news is that there are many ways to accomplish this task. As long as you do it with respect and fairness to everyone involved, you’re well on your way toward managing a happy, busy property.

Top 3 tricks landlords should steal from Airbnb hosts (but aren’t!)

Written by Sarah Block on . Posted in edited, For Landlords, Income Ideas, Move-in/Move-out, paid, Rental Advertising

Tricks to learn from AirbnbWhen you go on vacation, you expect an experience. Airbnb hosts and other vacation rental owners spend a lot of time on that point.

To stay in demand, vacation rental owners need to understand how to create a great experience for their customers. This keeps their occupancy high, their rental in demand, and their nightly rate at a premium. By thinking like a vacation rental host, landlords can reduce tenant turnover, keep their units in demand, and charge more for rent.

To level-up their business, landlords should provide great customer service and offer tenant “bonuses” to reduce turnover and increase rent. Below are the top three tricks that long-term landlords should steal from Airbnb hosts.

1. Amazing Communication

The top Airbnb hosts have high communication rates. Furthermore, Super Hosts have a minimum of a 90% response rate. How can you replicate this?

  • Use Cozy’s maintenance ticket system to quickly respond to repair issues.
  • Respond quickly when you have requests for a unit showing.
  • Show future tenants how responsive you are by having current and former tenants review your rental property on Google Maps or your property website.

In fact, 82% of Americans at least sometimes seek out reviews before making any kind of purchase. Your prospective tenant will feel more at ease about entering a year-long commitment with you if they can view reviews beforehand. In addition, from the beginning, you are showing them that their time matters.

2. Welcome Package

A welcome package is an essential part of the experience of staying in a vacation rental. It tells guests about the property, local restaurants, and anything else they might need to know to make the vacation as simple and relaxing as possible. Long-term rentals are no exception.

Landlords should have a welcome package that includes:

  • Unit rules and regulations
  • A small welcome gift like flowers, chocolates, or a gift card
  • Location details like public transportation, local restaurants, local events, local attractions, and anything else that might make their move more seamless.

Related: The perfect move-in package

3. Concierge Services

Lastly, landlords can create a wonderful living experience for their tenants by offering premium services included in the rent. This provides an added selling point and makes life just a little easier for your tenant.

Let’s say your usual tenant is in corporate America and pays a premium to outsource tasks. An added bonus to your rental property could be as simple as including maid service, an Amazon Fresh subscription for quick grocery delivery, and laundry service with the rent. By cutting those chores out of your tenant’s life, you’re providing the best gift you can: time.

Related: 4 basic amenities that attract quality tenants

Conclusion

To summarize, it doesn’t need to cost a lot to provide a great experience for tenants. Above all, simply caring about their time matters most. By communicating quickly, providing an informative move-in package, and including time-saving services with rent reduces turnover, allows for a premium rental price, and attracts good quality prospective tenants. So think like a Super Host and start thinking outside the box when it comes to being a top landlord.

Can I get more money from a furnished rental?

Written by Laura Agadoni on . Posted in edited, For Landlords, Income Ideas, Laws & Regulations, paid, Rent & Expenses, Rental Advertising, Security Deposits

Furnished RentalsAn interview with Lucas Hall, Landlordology’s founder and head of industry relations at Cozy.

Not only can you get more money from a furnished rental, demand is growing in the furnished rental market, even with the popularity of Airbnb. Over the past decade, there have been more renters overall, and a percentage of those renters prefer to rent a furnished home for a variety of reasons.

I recently spoke with Lucas to get his opinion on what it takes to get into the furnished rental business and to get his best advice for landlords who are thinking about breaking into this niche segment of “landlording.”

First, lets talk about what exactly a furnished rental is.

There are two types of furnished rentals: long-term, meaning a few months or more, and short-term, such as vacation properties.

Most long-term rental properties typically don’t come furnished. But they can. And there are some benefits for renters. Furnished rentals usually have all the furniture and appliances someone would need, and they may or may not have day-to-day essentials such as plates, silverware, and linens.

Short-term rentals for 30 days or fewer are completely furnished with linens, a vacuum cleaner, grill—everything you can want. The idea is that all you do is bring your suitcase and move in.

What kind of furniture should you put in a furnished rental? Cheap motel furniture? High-end stuff?

The type and quality of furniture to buy should mirror the type of unit you have. So if you have a high-end unit that commands thousands of dollars a month, then you should probably have a leather couch, a nice bed frame, and art on the walls. Whereas if you have housing that attracts contract workers, for example, who make between $20,000 and $40,000 a year, you can have used furniture that’s still in great shape. Or you can get furniture from places like IKEA.

In other words, if your clientele is willing to pay $3,000 a month for a two-bedroom, that’s the clientele who would expect to have a nice sofa.

Another consideration is that if you buy the nicest furnishings, there is a chance things will get stolen. If you buy the best coffeemaker or the most expensive knives, those items might ‘disappear.’ You’re better off buying middle-of-the-road items that serve their function.

What is the market for a furnished rental? Who wants to stay in one?

I have had renters for long-term furnished rentals who are moving from across the country for a job, and it’s a big convenience to just be able to move right in. There’s no need to move furniture or to shop for furniture right away.

Short-term is a whole different game. There you have weekly or monthly vacation rentals. You also have traveling nurses who tend to stay for two to six months, and the hospital pays for it.

Related: How to market your rental to traveling nurses

How do you market a furnished rental? What, if any, are the differences in your advertisement?

It’s important to put in the title that you have a furnished rental. Someone who needs furnished housing will be looking for that first. An unfurnished rental in this case will be a deal breaker. Also describe in the listing what the furnishings are. And make sure you show pictures of all the furnishings.

An important benefit of a furnished rental is that furnished units generally look better in listing photos, particularly when you stage properly. You want your furnishings to look really good in pictures. Your furnishings should be clean, useful, and complement the space and the color scheme.

Whenever you’re advertising a property, whether it’s a long-term unfurnished rental or a short-term furnished rental, you should photograph it with furniture in it.

Related: How to shoot real estate photos like a pro

How much does it typically cost to furnish a rental property?

I have had experience furnishing a two-bedroom condo and a studio. For the studio, I spent between $2,000 and $3,000. With the two-bedroom, I spent about $10,000 to furnish it. I bought a little nicer for the two-bedroom because it was going to be a short-term rental. I needed durable furnishings.

My tip when it comes to buying furnishings, whether it’s for a short- or long-term rental, is to buy stain-resistant materials. Otherwise, you’re stuck with regular cleanings or having to replace the furniture every year.

Now for the question that helps landlords decide whether they will offer a furnished rental or not:

How much more money can you get for a furnished rental?

You can typically get 15 to 20 percent more for a furnished long-term rental. It’s a convenience. People are willing to pay for convenience.

And for a furnished short-term rental, you can get 40 to 50 percent more at a minimum. In some cases, you can even double that, getting 100 percent more, depending on the location of the property.

You can typically get 15 to 20 percent more for a furnished long-term rental. It’s a convenience. People are willing to pay for convenience.

Which locations are best for furnished rentals?

I’ve had the most success with furnished rentals in high-density or highly desirable areas. I’ve had a successful furnished studio, for example, right in the heart of Washington, D.C., right near Capitol Hill and a metro station. People wanted to live there and were willing to pay for the convenience of a furnished rental. Places like that appeal to people whose time is more important than money and who would rather spend more than deal with furnishing a rental property.

Can you charge a larger security deposit for a furnished rental? After all, there are now theft of furnishings and furniture damage to consider.

Absolutely. But you can charge only what your state allows. This is often between one and two months’ rent as a maximum. So most of the time, landlords charge one month’s rent as a security deposit for an unfurnished rental. But for a furnished rental, I think it’s smart to double that, or charge two months’ rent. And just like any security deposit, it’s fully refundable as long as there are no damages.

Do you have any further tips or advice for our readers?

A good opportunity for people who want to do long-term furnished rentals is to get into corporate housing or provide housing for traveling nurses. You figure out if there’s a company or hospital that’s willing to make a corporate agreement with you. They pay the rent and are responsible for finding tenants.

Are you interested in getting into the furnished rental business? Or are you in it now? Let us know in the comments!

13 creative marketing strategies for independent landlords

Written by Joe Fairless on . Posted in For Landlords, free, Rental Advertising, Step 5 - List, Advertise & Show

Marketing your rentalsAs an independent landlord who self-manages a portfolio of rental properties, you probably don’t outsource the job of filling vacancies to a property management company.

Unlike a property management company, you are the manager AND the owner. This means you control the marketing strategies and are directly impacted by their success or failure.

The best marketing strategies are designed to find the highest quality tenants—people who pay rent on time, treat the unit and property as if it were their own home, and are courteous to the neighbors—in the fastest possible time.

Finding high-quality tenants makes your life easier as a landlord and puts more money in your pocket. You’ll have more qualified leads, less turnover (and lower turnover costs), fewer evictions, and less late rental payments. Finding these tenants faster reduces your vacancy loss. By filling vacancies yourself, you eliminate the lease-up fees, new lease fees, and ongoing fees charged by a property management company.

How can you find the highest-quality tenant in the shortest period of time?

Now the question is how to find the highest-quality tenant in the shortest period of time without spending all your time marketing your vacant units?

As a result of building a portfolio of over $400 million in apartment communities, I have identified 13 creative marketing strategies to attract high-quality tenants:

1. Advertise on the internet 

Eighty-seven percent of renters search for their homes on the internet, so an online presence for your rental properties is a must. Start by creating a website (or at least a Facebook page). Then post your listing, and market the listing on social media sites like Facebook, Twitter, and Pinterest. Next, all of your “for rent” units should be listed on popular online rental listing services like Cozy, Apartments.com, Craigslist, Realtor.com, Trulia, and ApartmentFinder.com. Make sure your listings include a clear and accurate description of the unit and property and highlight major selling points. It’s also a good idea to invest a few hundred dollars into having professional pictures taken.

Related: How to write attractive property listings in 8 steps

2. Hire locators

A locator is a rental agency that specializes in helping prospective tenants find their ideal home based on their needs. These are great sources for finding high-quality residents. The fastest way to find the locators in your market is on Google. The standard commission is 50 percent of a month’s rent, which is less costly than a property manager’s fees. If you decide to hire a locator, make sure you provide them with weekly updates on your current availabilities.

3. Partner with a real estate agent

You can partner with your real estate agent agent to advertise your rentals on the MLS. Realtors usually charge 50 percent of a month’s rent as a commission. This is a great way to build rapport with your real estate agent and ideally become their go-to investor for their pocket listings and off-market opportunities.

4. Use corporate outreach

Most major corporations have someone whose sole responsibility is to place employees who are relocating to the area into new rentals. Contact the human resources department of the major employers in your market. Ask for the contact information of their relocation specialist.

5. Target local businesses

Create a list of local businesses, employers, schools, bus stops, train stations, etc. to target your marketing efforts based on your renter demographic. Then, to generate leads, print out and drop off fliers, business cards, price sheets, floor plans, and site maps to these targets. Always ask for permission first.

6. Negotiate discounts with target businesses

Another approach is to negotiate discounts at local eateries, salons, fitness centers, etc. for your tenants, and then leverage those discounts when marketing your rental listing. The local business gets more customers, and your tenants get access to local businesses at discounted prices, so it is a win-win.

7. Build a referral program

Fifty-seven percent of renters search for a home through referrals from family and friends. To capitalize on this, incentivize your tenants to provide referrals. One approach is to offer cash to any tenant who provides a referral. A fee of $300 paid 30 days after the execution of the new lease is standard. To advertise the referral program, deliver notes to your tenants’ doors, and send out friendly emails with the details of the referral program on a monthly or bimonthly basis.

8. Provide a free gift to target business employees

Similar to the referral program, send a small gift such as a gift card, gift basket, bottle of wine, toolkit, etc. to the current tenants who are employed at the businesses on your target list. Thank them for their residency, and ask them to refer your rental properties to their colleagues at work.

9. Hold tenant appreciation parties

To promote resident satisfaction and retention, host tenant appreciation parties a few times throughout the year. Examples are to provide a small to-go breakfast; host a wine night; host a timely or holiday-themed event, like a Valentine’s Day card-making party; holiday gift wrapping session; back-to-school barbecue; or a Halloween costume contest. Be creative!

10. Encourage online reviews

The online rating of your properties will likely be the first thing a prospective tenant looks at during their rental search. Organic reviews are great, but you should also be proactive to increase your number of reviews. One strategy is to ask a resident for a review after fulfilling a minor maintenance request (probably not a good idea if it was a large maintenance issue) in a timely fashion. Or have a laptop station set up at your tenant appreciation parties and ask them to write a review before they leave.

11. Contact exiting tenants

Call all tenants who have previously notified you that they plan on leaving at the end of their lease to figure out why they are leaving. See what you can do to convince them to stay (assuming they are a high-quality tenant). Maybe they want to move to a different unit or want a minor upgrade, like an accent wall or new curtains. Also, explain to them the costs associated with moving out (new security deposit, hiring a moving company or U-Haul, cleaning costs, new furniture, etc.). This conversation should take place at least 60 to 90 days prior to the end of their lease.

12. Follow-up with old leads

Reach out to leads you received that are older than 90 days to see if they or someone they know is still searching for a rental.

13. Offer good customer service

Provide stellar, good old-fashioned customer service to prospective tenants. Be responsive and timely with requests and questions. It doesn’t matter if you’re a marketing wizard and get hundreds of leads if you don’t pick up the phone or respond to emails quickly, politely answering questions, and getting possible tenants one step closer to viewing the property and signing the lease.

Summary

All 13 of these strategies have been proven to attract the highest quality residents in the shortest amount of time without the help (and costs) of a property management company.

Some of these strategies are free and just require some sweat equity on your part. Others require an upfront investment and/or result in a short-term reduction in income. So it’s important that you create a marketing strategy and set a marketing budget before closing on a deal. That way, you can account for the costs in your underwriting.

4 reasons you should not use a real estate agent to rent a house

Written by Laura Agadoni on . Posted in edited, For Renters, Move-in/Move-out, paid, Rent & Expenses, Rental Advertising, Step 5 - List, Advertise & Show

Don't work with an agentCall me crazy, but I get a little annoyed when real estate agents call me about a rental listing.

Why?

Here’s a typical conversation:

Me: Hello.

Agent: Hello, this is John. I’m a real estate agent with AAA Real Estate. Is the home for rent at 123 Main Street still available?

Me: Yes it is.

Agent: Well, it’s not in the MLS.

Me: A silent pause

Agent: Anyway, my client requested to see it. And I want to show it now.

Me: I’m having an open house Saturday at 3 p.m., and your client is welcome to come.

Agent: No, that doesn’t work. My client wants to see it sooner. When can I show it?

Me: You can’t show it at all. Tenants are currently living there, and I’ve made arrangements to have an open house Saturday at 3. Please invite your client to come then.

Agent: Do you pay an agent commission?

Me: No.

Agent: Thank you. Goodbye.

And I never hear from this agent or their client again.

Here are four reasons why you shouldn’t use an agent when you want to rent a home:

1. Real estate agents use only the MLS

If you ask a real estate agent to find you a rental property, they will most likely look only on the Multiple Listing Service (MLS), which only agents can access.

In fact, I asked an agent the other day how he finds rental properties for clients. He said he finds them through the MLS.

Here’s the problem of looking only at the MLS for rental properties: Since only agents can list properties through the MLS, real estate agents are missing all the properties landlords like me advertise. And if your real estate agent is missing out on properties listed by non-agents, you are too.

You are better off, when looking for a rental property, to look online.

You’ll probably find lots of rental homes by looking at various real estate sites on your own, more than what your real estate agent will find by using only the MLS. Of course, you can always find properties and send them to your agent, but then why not just contact the person on the listing yourself?

Related: The Only 3 Websites You Need to List a Rental Property

2. Agents expect to be paid

Real estate agents mainly work with clients who are buying and selling homes. In those cases, the seller typically pays the real estate agent by giving the agent a percentage of the home’s selling price.

So the expectations for most real estate agents who are helping a client trying to rent is that the landlord will pay the agent for finding a tenant, typically one month’s rent (similar to getting a cut of a home’s sale).

But in a rental market where most applicants find rental properties without an agent, landlords have no reason to pay an agent. In other words, if I have five applicants for a property, four who represent themselves and one who comes with an agent who expects me to pay them a month’s rent, guess who I’m not renting to?

If you use an agent in a market where most people are finding properties on their own, you will likely be taking yourself out of the running to land a rental property.

3. Agents don’t really want to work with you

I’ve always suspected that statement to be true, and now I have a couple of stories to back this up. I think this probably represents what many agents think.

A real estate agent called me the other day on behalf of her client, and when I told her I don’t pay an agent commission, she let me know that she doesn’t know what to tell renters who call her for help. She wants to help them find a home, but if the landlord won’t pay her commission, she is not interested in working for free.

Another agent told me that he usually doesn’t work with clients looking to rent but that he will sometimes do so to help a friend out.

Since it’s not the norm for homebuyers to pay an agent (home sellers typically do), renters and agents expect the landlord or property owner to pay the agent just as home sellers (owners) do. But while most home sellers use and pay real estate agents, most small-time property owners do not use agents to get their property rented, so they have no interest in paying your agent.

If you really want to use a real estate agent to help you find a rental home, you might want to consider paying your agent yourself.

4. Agents often do more harm than good

Landlords who know their business find out what market rents are for similar rentals in their area. (I use the Cozy rent estimate tool in addition to keeping up with rent prices in my area.)

But when a real estate agent comes along, they are usually loaded for bear and ready to negotiate rent price—it’s just part of their job, like offering less than asking price for a home to buy. Although that’s standard practice for the home buying process, it’s not typical for landlords like me who plan to rent the property for the price listed.

Just as I don’t pay agents a commission, I am not interested in taking less than my advertised rate for my rental properties. If you’re paying an agent for their great negotiating skills, your money is largely being wasted when it comes to renting versus buying a property.

When real estate agents are helpful

There’s a place for real estate agents and rental properties. In big cities like San Francisco or New York where it’s difficult to find housing, you might benefit from using an agent. Or if you are relocating and know nothing about the area, you might need help from an agent who can show you around. Other than that, you are typically better off to cut out the middleman and find a rental house yourself.

How to automate landlord responsibilities

Written by Sarah Block on . Posted in edited, For Landlords, Leases & Legal, Maintenance & Renovations, Move-in/Move-out, paid, Rental Advertising, Screening, Software, Step 1 - Perform Research

Landlord automation - life's a beachWhen I became an accidental landlord in 2011, all I knew for sure was that I needed a tenant, and fast.

Over the years, I have learned how to manage my properties through systems and processes that practically automate all landlord responsibilities. Since then, I like to say “life’s a beach” . . . or at least that’s true for my life as an independent landlord. Today, I’ll share my landlord automation secrets.

Step 1: Finding a tenant

The first thing I do with my rentals is to take great pictures that showcase the properties and surrounding towns. I write ads that help prospective tenants see themselves in that environment.

Related: How to Write an Attractive Property Listing in 8 Steps

From there, I create a Google Drive folder and put photos and ad descriptions in it as well as a Google calendar for showings.

This is where the automation comes in.

  • Post your ad through syndication sites like Apartments.com and Cozy’s Property Listing portal.
  • Use an app like Calendly to automate scheduling showings, which populates on your Google Calendar.
  • If you want, you can even automate showings by using smart technology like Rently that allows prospects to schedule the showing from their smartphone and open the door for them. I wouldn’t recommend doing this one though if there are current tenants. Also, there is no replacement for meeting a prospective tenant in person.
  • The rental application can be done online for free with Cozy’s rental application. The application includes a background and credit check, which is always recommended.

Step 2: Set up lease and rent collection

Creating a lease and rent collection system is the most important step. If your lease isn’t legal or your payments aren’t automated, that is potential money out of your pocket.

Have an attorney create your first lease, ensuring that it is compliant with your local area.  This lease can be customized for all other tenants. So, it is a one-time cost that will save you big money throughout the life of your rental.

  • Use DocuSign to have the tenant sign the lease and store on Google Drive or your Cozy portal, providing access to your new tenant.
  • Set-up automatic rent collection with Cozy’s rental payment portal. It’s free for both the landlord and tenant as long as they pay with an ACH. A bonus: Cozy automates late payments.

Related:  The landlord’s guide to rent collection

Step 3: Move-in checklist

Think of a new tenant moving in like a new employee starting a job. There is an onboarding process.

  • Start with a move-in inspection with the tenant. Have the tenant sign it. This will be gold when the lease is up if there are any issues. You’ll have proof the tenant agreed the unit met their expectations. On the other side, if an issue needs to be resolved, the tenant can fill out a maintenance request, and the entire process is tracked.
  • You can track any tenant onboarding and maintenance expenses for tax purposes and write them off during tax season using the landlord portal.
  • Build a small team of contractors that you can rely on. You will need a handyman and a cleaning crew for maintenance and turnover needs. Having this team in place from the beginning saves you time throughout the lifetime of the rental.

Related:  The perfect tenant move-in package

By taking a small amount of time upfront to set up systems, processes, and automation, being a landlord becomes much easier. While landlords jest that owning rentals are anything but passive income, it can be much more passive with a plan in place.

How to get your landlord’s approval to sublet

Written by Laura Agadoni on . Posted in edited, For Renters, paid, Rent & Expenses, Rental Advertising, Screening, Security Deposits

Permission to subletYou just found out you need to be away from home for an extended time. But you’re still in the middle of your lease period. Subletting your rental would be the perfect solution … but what will your landlord think?

Related: A renter’s guide to subletting your apartment

When you sublet, although you’re still a tenant, you act as a landlord by leasing your rental unit to someone else—a subtenant. Whether you’re allowed to sublet your rental is usually addressed in the lease, and you typically have one of three options:

  1. You are not allowed to sublet—game over, end of story. Don’t do it!
  2. You are allowed to sublet. Go for it—you have free rein!
  3. The norm—You are allowed to sublet only after obtaining written consent of the landlord. (Landlords typically want to screen subtenants.

But what if the lease doesn’t say anything about subletting?

A rarity, but if your lease is silent on the issue, check to see whether your state has any laws on the books about subleases. And more important, just ask your landlord.

Keep in mind that your landlord can refuse your request to sublet your rental, particularly if they have a good reason. With that said, there are ways to help ensure you get your landlord’s approval to sublet.

1. Find a suitable subtenant

It’s best to ask someone you know and trust. A dependable person you can rely on both reassures the landlord and gives you peace of mind that this person will uphold their end of the bargain—paying the rent on time, taking care of the property, and following all other lease terms.

If you don’t know anyone who wants to sublet, you can still find a suitable subtenant.

  • Tell everyone you know that you’re looking.
  • Post on social media and Craigslist.
  • Ask if your roommates will do the same—they’re the ones who’ll be living with this person, so it benefits them to find someone.

If you do post the unit online, make sure you list the benefits (basically whatever it is that you like about it). Also include photos, and of course, your contact information.

If you’re having a hard time finding someone, lower the rent or offer to pay utilities. Even if you need to subsidize part of the subtenant’s rent, it will be cheaper than paying all the rent and probably cheaper than breaking the lease.

2. Screen potential subtenants

You can sign up with Cozy as a landlord and have your subtenants apply. (If you are already signed up with Cozy as a tenant, you’ll need to use a different email address.) Request that applicants allow a credit and background check. This lets you know whether they have a criminal record and how they handle finances.

Ask for references, and call them. Ideally, you will speak with their employer and their current landlord.

3. Get your roommates on board

If you have roommates, make sure they’re okay with your subtenant. You don’t want to cause any drama before you leave by surprising your roommates with a stranger suddenly living with them. If your roommates approve your subtenant, have them sign a form stating so.

4. Draw up a lease between you and the subtenant

A written lease makes everything clear, protects both parties, and eliminates your-word-against-theirs types of scenarios.

Here are some must-haves to put in the lease:

  • The dates the subtenant will be renting the unit from you
  • The amount of rent they will pay
  • Whether they will pay the rent to you or directly to the landlord
  • Who will pay for utilities

Also provide your subtenant with a copy of your lease so they will know all the particulars of your rental situation.

A note about rent: You can continue to pay the rent to your landlord even if you have a subtenant, and your subtenant would pay you. This way, you know that rent is being paid. You can also choose to let your subtenant pay the landlord directly. But if your subtenant doesn’t pay, the landlord could evict you (unless you pay rent pronto plus any late fees).

It’s a good idea to ask your subtenant for a security deposit. A usual amount is half or a full month’s rent.

5. Put in a written request to your landlord

Let your landlord know that you are taking this matter seriously by mailing (or at least emailing) them about your sublease proposition at least 30 days in advance.

Here’s what to put in the letter:

  • Your reason for needing to sublet
  • The start and end dates of the sublease period
  • The proposed subtenant’s name and current address
  • Your address (or a way of contacting you) during the sublease period
  • A copy of the sublease agreement and any roommate approval form

6. Wait for your landlord’s response

If your landlord doesn’t respond in a week or so, follow up. If your landlord won’t respond or refuses your sublease proposal for no good reason, you may need to contact an attorney or legal aid.

7. Understand what you’re getting into

You are ultimately responsible for your rental unit.

If you choose a subtenant who is irresponsible and skips out on rent, damages the rental unit, or becomes a nuisance to the point of violating the lease terms, your landlord can come after you for the money.

Make sure you have a clause in your lease with your subtenant that states they will be responsible for unpaid rent or damages they caused. That way, if your landlord sues you or keeps your security deposit to pay what’s owed, you can then come after your subtenant or keep part or all the security deposit if you requested one.

Note that the expectation is to return your subtenant’s security deposit. If you do keep all or part of their security deposit, you need to provide a reason.

A subtenant could save you from paying rent for a place you won’t be living in or from having to break your lease. If done correctly, the arrangement could work out well for all parties involved: your subtenant, your landlord, and you.

If you have tips for subleasing, please share them in the comments!

How to rent your former home

Written by Laura Agadoni on . Posted in edited, For Landlords, paid, Rental Advertising, Step 2 - Find & Buy a Property

communicationRenting your former home will be easy, right? You know all there is to know about the house, so showing it to renters should be a snap. But something could get in the way of your success …

Your emotions.

That’s right. If you spent any amount of time living in your home, you probably have an emotional connection with it.

But if you plan to rent your former residence, even though you’ll still own the home, you’ll need to emotionally detach from it. It may still be your house, but it’s not your home anymore. And there’s a big difference between the two.

What used to be your residence—your home—is now your investment (rental) property. Here’s how to transition from a home you loved to a house that’s strictly for business.

1. Hold onto memories

You probably have some fond memories of your home—family gatherings, growing a backyard garden, hosting dinner parties, etc. You will always have your remembrances, and you should cherish them.

Appreciate that you have feelings for the home. That’s huge, so just sit with that for a bit. Understanding and getting in touch with your feelings should help you achieve your goal, which is renting the property.

To successfully rent your home, however, you need to get into the right mindset, and let go of your home. Otherwise, you might subconsciously sabotage your efforts of renting the place.

How? Here’s one way: Since it’s your home, you likely think it’s worth more than it really is. So you might ask too much for rent. By doing so, you might have a difficult time finding a renter.

Tip: Use a Cozy Rent Estimate report to help you determine the right amount to charge for rent.

Related: How to set the rent price for your rental properties

2. Set a numeric goal

Run the numbers to see the potential for making money from your former home. Being able to count on clearing an extra $500 or $1,000 a month, for example, should make it easier to help you view your former home as a business.

3. Picture what it will be like

Visualize renters living in what used to be your home to get used to the idea. Don’t be territorial. As soon as you get a signed lease or a month-to-month commitment—and first month’s rent and security deposit, of course—get comfortable with the idea that you no longer have access to the home as you once did. Let your tenants live in peace. This is the law, by the way. It’s called giving your tenants “quiet enjoyment” of the premises.

Note: You should always be able to enter your house. You, therefore, need a key to get in. It’s wise to change the locks before a tenant moves in and to keep a key for yourself.

Related: Lock lock, who’s there? The rules for changing locks

You can show up at the property for the following reasons:

  • Emergency situations (no notice needed)
  • To make regular maintenance and safety checks (with notice)
  • To show the property for sale or rent (with notice)
  • To make repairs (with notice)
  • To check on the property if the tenant will be away for an extended time

Make sure you have a section in your lease that lists the times you can enter.

4. Neutralize the home

You probably have personal touches around the home, what people on HGTV refer to as “putting on their stamp.” That red dining room or bright blue child’s room might have made you happy, but you must move on if you want to rent the place. Neutralize your home, and remove your “stamp.”

Why? Two reasons:

  1. Neutralizing the home helps you detach from it. It will seem less like your home and more like a home.
  2. You make the house show ready by neutralizing it.

Here’s how:

  • Remove all your personal belongings and furnishings
  • Clean it
  • Paint neutral colors
  • Repair all the quirky stuff you became used to (leaky faucets, doors that don’t close all the way, stuck drawers, dated light fixtures)

5. Advertise the house for rent

Once you’re emotionally ready and the house is physically ready to show, advertise it. I use Cozy, Apartments.com, and Craigslist to get this done. Once you start receiving interest, set up some showings. Be sure to screen tenants by requiring a credit and background check. (I use Cozy to get that done.) Then interview people who meet your criteria.

6. Stay away after you have a renter

No matter how tempted you may be to stop by the house and let yourself in, don’t do it. Once you’ve accepted money from someone, you no longer have the right to come into your house whenever you please. There are times when you will need to come over, but make sure you do this the right way.

This article explains how: Can a landlord enter the property whenever they want?

The bottom line

It can be difficult to turn what was once your home into an investment property. But after the initial difficulties, you will appreciate that extra money your house brings in and learn to let go of your former home.

PayRent.com