Even if the only rental properties you manage are your own, having written rental property operating procedures can help you think through common management scenarios so you don’t have to constantly reinvent the wheel for recurring management activities. Operating procedures are living documents, constantly updated with information and strategies learned from daily experiences that help us manage better, be more responsive to tenants and operate more efficiently.
In my previous article, Benefits Of Drafting A Rental Property Business Plan, we looked at an outline for establishing, tracking and following up on goals and objectives for managing rental properties over a specified time period (annually). That article focused on what we wanted to accomplish, this week we’re going to look at an outline for how we execute our plan. We’ll focus on common tasks that recur regularly, since anything else we encounter as landlords typically requires a decision, not a procedure.
Here are five sections/sub-sections to include in your rental property operating procedures. Not all may apply, tailor your procedures to your properties and your situation.
- Conducting a Market Rent Analysis
- Generating advertising content (standard listing information for each unit) and distribution channels
- Application process (online, via U.S. mail, in-person at showing or open house, etc.)
- Application fee policy (items charged, amount, how collected)
- Applicant screening criteria: Credit score, income verification, employment verification, acceptable debt service-to-income ratio, previous landlord reference(s), criminal background report, prior eviction(s) report, co-signer screening criteria (if applicable)
- Notification process for accepted and rejected applications
- Scheduling pre-inspection (landlord) and repairs or cleaning (if required)
- Conducting Move-In Inspection with tenant
- Follow up procedures for action items resulting from Move-In Inspections (if any)
2. Tenant Care
- Notification process for tenant repair requests (phone, online, etc.)
- Creating and tracking repair work orders
- Notification process for informing tenant of entry for repair
- Process for follow up and closing work orders
- Notification process for tenant requests or complaints not associated with repairs (e.g. complaints regarding neighbors)
- Process for follow up and closing tenant’s non-repair requests and complaints
- Process for scheduling and notifying tenant of key lease dates: Lease expiration advance notice, lease expiration
3. Periodic Maintenance and Inspections
- Scheduling periodic maintenance for major appliances and systems
- Scheduling periodic general property inspections (interior and exterior)
- Tenant notification procedures for recurring maintenance and inspections
- Checklist for periodic inspections
- Follow up procedures for actions items resulting from periodic inspections (if any)
4. Tenant Lease Non-Compliance
- Process for documenting lease non-compliance
- Process for issuing warnings regarding lease non-compliance
- Process for documenting cure of lease non-compliance
5. Lease Termination
- Processing lease termination for cause (lease non-compliance): notices, inspections, eviction (per attorney instructions)
- Processing lease expiration: Notices, pre-inspection, Move-Out Inspection, security deposit return
Have questions about drafting procedures for any of these sections or using rental property operating procedures? Need help creating procedures for your rental properties? Drop me a line: Contact Us.
About Real Living with Broker John™
Each week Real Living with Broker John™ provides innovative tips and information regarding all aspects of owning, buying and selling real estate. John Souerbry is Broker/Owner of Cordon Real Estate, a full service brokerage in California’s San Francisco Bay Area (CA License 01370983). Contact John with questions or comments regarding Real Living or real estate in Wine Country, East Bay and Silicon Valley.
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