Did you know tenant management is one of the most critical factors that determine your rental property’s profitability? If you can find, attract, and manage great tenants that pay on time and stay for a long period of time. You’ll reduce vacancy rates, ensure timely payments, and improve your bottom line.
Optimizing Revenue
Having a satisfied tenant and a well-maintained property influences revenue generated by the property.
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- It minimizes vacancy by having a tenant satisfied with the property, the maintenance issues, and good and responsive communication with the property manager. Minimizing vacancy is critical to having a property earning maximum income.
- By having a well-maintained property with a great reputation, you can attract premium tenants that are willing to pay market rates or above to get a residence they’re proud of.
Proven strategies for managing tenants effectively
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Efficient Rent Collection Process
Make it easy for your tenants to pay rent and on time. According to Fox Business Reports, ~87% of tenants pay their rent on time, so it’s imperative to stay on top of rent collection. You can make it easier by:
- Providing multiple easy and convenient ways to pay rent can help with collections. Online rent collection from the bank and via credit card versus mailing a check is much more convenient for your tenant.
- It should be clear to the tenant when the rent is due. The more methods you can keep them informed, the better: online accounts, emails, and SMS. The more automated you can make the process for yourself via software, the better.
- It should be clearly communicated how late fees on late rent will be calculated to the tenant. So they are incentivized to pay on time.
- Timely and professional communication with your tenants about rent collection, such as timely rental invoice, rent receipt, late rent notices as appropriate.
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Maintaining property value
Having a property occupied by quality tenants is critical in the upkeep of property. Making sure you’re on top of all maintenance and repair issues as required can prevent a major property repair by dealing with it when it’s minor. Staying on top of maintenance is a great way to ensure you keep quality tenants.
- The condition and appearance of the property is the first impression and the best way to attract the attention of the best tenants.
- Whether you’re using a property management company nearby or managing the property yourself, being proactive on maintenance and treating key repairs as a priority.
- Having your property occupied with market or above rent is a key determinant in the value of your property since it increases the profit margin for the property. So have a proactive maintenance plan so that your tenants are satisfied and stay long-term.
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Sign a comprehensive Lease Agreement
Signing a comprehensive lease is the best way to protect yourself from legal problems down the line. It also assures your tenant that you’re thorough and well organized. The lease should be clear on its terms for duration, rent payment, and responsibilities of each party (the property manager and tenants). It should also abide by all real estate rental laws of your state and city.
- You should have an attorney-approved lease that is valid for your city/state. It should at a minimum define the:
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- Duration
- Monthly rent payment amounts, due date, delivery of payment
- Security deposit
- Occupation Limits
- Premise Address and Property Description
- Pet Policy
- Assignment and subletting rules
- Tenant and landlord responsibilities
- Rent increase clause if appropriate
- Break and Lease Termination (how to get out of a lease)
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- Legal Costs
- Insurance responsibilities (renters insurance, general liability insurance)
- Other payment responsibilities (utilities, minor repairs)
- Rental Agreement Disclosures
- How does renewal of lease work?
- other payment responsibilities, move-out terms, liability
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- Sign longer-term leases. Sometimes it’s better to sign a long-term lease to minimize tenant turnover over the long term. This minimizes the costs with finding new tenants. Here are some statistics on the lease duration in the United States, according to the US Bureau of Labor Statistics:
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- 59.6% of leases are 12 months in length.
- 31.8% of leases are month to month.
- 8.6% are other durations (with the leading duration of other being 24-month leases).
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- Having an online lease with an E-signature is very helpful in establishing the lease with thorough proof of agreement by both parties.
- You should have an attorney-approved lease that is valid for your city/state. It should at a minimum define the:
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Reduce Vacancies
Besides how much rent you charge, the most important factor in the profitability of your property is minimizing vacancy time. According to the US Census Bureau, the vacancy rate in the US is ~6.9%, which can vary based on your region.
- Make sure you have a thorough tenant screening process to get tenants that are responsible and pay their rent on time.
- A key factor in a tenant staying is maintenance of the property and communication with the tenant. Keep the tenant informed about all key information related to the property and also their maintenance requests.
How to simplify tenant management with SimplifyEm Property Management Software?
Simplifyem can help you as a property manager with this key activity of managing your tenants. We provide all the tools and services you need to excel!
- Start advertising your Rental Listing through SimplifyEm to get the best rental applicants.
- Perform Tenant Screening and get credit, criminal, and eviction history on your potential tenants.
- E-sign an attorney-approved lease provided with SimplifyEm or Upload your own company lease. We’ll be able to email your tenants for review and E-signature and it’s legally enforceable.
- Set up online rent payments to make it easy for your tenant to pay rent directly from their bank account via the ACH network or through credit card Payments. The money gets deposited directly into your bank account, and the rent is recorded for you within SimplifyEm so your financial records are up to date.
- Require Renter Insurance for your tenants so you can be sure they are well insured to lower your risk and liability.
- Keep track of exactly what your tenants haven’t paid. So if you ever have to evict a tenant, you have bulletproof records.
- Professional reports for your tenants with tenant invoices, rent receipts, and late rent notices that can be created and sent with the click of a button via email or SMS. Everything can be automated for you so you don’t have to do anything.
- A communication hub for you to see all email, SMS, and phone calls from/to tenants available on your computer and also on your phone via our mobile app.
Frequently Asked Questions – FAQs
- What is tenant management, and why does it matter?
Tenant management is the process of attracting and retaining tenants for your rental property. This involves thorough tenant screening, signing a comprehensive lease, collecting and tracking rents, communicating and handling maintenance issues for tenants, and a thorough move-out process. - How does tenant management impact property maintenance?
Property maintenance is affected by great communication with tenants to understand property issues and having responsible tenants. - Can poor tenant management lead to financial losses?
One of the biggest factors in rental property performance is non-payment of rent by a tenant and extended vacancy. Both are affected by attracting and finding the right tenant for your property. - How does tenant screening play a role in tenant management?
Nearly a quarter of evictions (23.8%) were filed for tenants that had submitted fraudulent information on their rental applications. Effective tenant screening is the first step in tenant management. - How does tenant management improve cash flow?
The biggest negative impact on cash flow is having a vacant unit, lots of maintenance issues, and charging below-market rent. The best way to avoid that is to find a trustworthy tenant that will love the property and stay for the long term. - How do I get started with improving tenant management?
To improve your tenant management process, look at all phases: tenant screening, rent collection, tenant communication, and property maintenance and work on improving on ‘low hanging fruit’.
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