About Ed’s Management System
I’ve been managing my own properties for many years now. Like most real estate investors, I do this to improve my monthly cash and save for my retirement. I’m not interested in spending my free time showing vacancies, fixing appliances, or chasing rents. My 4–step system is borne from my own personal experiences, and it incorporates the best of what I’ve learned from others along the way.
Step 1. Run A Compelling Advertisement That Gets Prospects To “Call” You
The purpose of your ad is to get people to call you. That’s all! Renters use the ‘process of elimination’ to determine which ads to call, so your goal here is to give enough information for the reader to like the idea of the property, but not enough for them to rule it out. One mistake commonly made by investors is putting too much information in the ad, which results in prospects disqualifying the property without calling to confirm other details first.
The Phone Call:
When renters call, they want to decide if it’s worth it for them to see your home. You need to set a time to have them see the home by giving as little info about your property as possible. You’re likely a busy individual, or at least have better things to do than drop what you’re doing to run over to your rental every time prospective renter wants to see it.
Set a specific date and time for the prospects’ visit. Instead of saying “between 1:00 and 2:00 on Saturday” say “1:00 pm Saturday afternoon”. By having ALL the renters show up at exactly at the same time, a few things happen:
1. No-shows don’t waste your time.
2. Those who do show up are going to be more willing to complete an application on the spot rather than ‘think about it’.
3. It’s much easier to negotiate a higher rent and longer-term lease when the renter sees other people interested in renting the same home.
Example of a GOOD ad:
Remodelled, centrally located large home, hardwood, fireplace, private fenced yard, private parking, from $700/month, call Ed at 499-2851 for information.
Example of a BAD ad:
Clean home in Alberta Avenue, new furnace/new roof/shared laundry, no smoking/no pets, $700/month plus Damage, No calls past 8:00pm, call …
Hot-Words To Describe Your Vacancy:
|Patio||Private Deck||Private Yard||Big Yard|
|Sliding Back Doors||Private Fenced Yard||Fireplace||2 baths – never 1 ½ baths|
|3 BR (never say 2 BR)||Family Room||Cozy Den||All new kitchen|
|Garage||Gourmet Kitchen||Wonderful area||Safe neighbourhood|
|Quiet street||Great area||Exclusive Area||Upscale Area|
Step 2: Have The Prospects See The Investment Property
It’s good to arrive a few minutes ahead of the showing time you’ve set. Turn on all the lights in every room. Ensure that the home is clean and in good repair. Lawns are cut and sidewalks are free of snow and ice. Have your application forms ready and available with some pens for renters to use. As people arrive, welcome them and thank them for coming. Have them walk through the property and remind them that you’re there to answer any questions. You’ll find that if you’ve done the first step properly, your home will be filled with prospective renters.
Don’t stand behind your prospect as they look around. Allow them to walk through the home freely and not feel pressured. Because you’re likely to have more than 1 party interested in taking the home, encourage them to complete the application then and there without taking it away. Explain that it is your intention to select a renter within a day or so. This allows you to collect applications from interested renters and not spending time discussing issues with someone who’s not interested or not in a position to make a decision.
Step 3: Getting And Screening Applications For Your Investment Property
First, use a good application – see mine as a guide, and ensure that you get the renters current and past addresses.
Collect all applications and quickly review each to ensure that all fields are filled out. DON’T make a decision on the spot – ALWAYS check and verify the information provided by any applicant. Go home and call every reference (employers, past landlords, emergency contacts, etc.) and verify the accuracy of the information provided by the applicant. Using this system will eliminate any weak applications. Of the 50 or so people who called your ad, its likely that only 10 or so came to see your home. Let’s say only 5 complete an application – this would be doing ‘very well’. You can simply disregard incomplete applications. You’ll likely be left with 2 or 3 good ones.
Once you’ve verified that the information they’ve provided is true, go to their home (their address is on the application) and see how they live now (don’t tell them you’re coming). If you like what you see, tell them that you’ve decided to give them the place and you’d be glad to give them the keys once they can provide 12 post-dated cheques. If you don’t like what you see then explain that you’ve chosen someone else and that you came to return their application. If you select an applicant, collect a deposit and arrange a time to meet them at the property to complete a lease, and provide keys.
Step 4: Getting The Renters In To The Investment Property
Arrange a time to meet them at the house before move-in day to sign the lease and accept the keys. Have them do a walkthrough of the home and note anything that is damaged or not working.
I usually explain that I’ve already been through the home and I’m sure that all the lights work, and the appliances and plumbing fixtures operate properly. I tell them that this is how I expect them to maintain the property. Complete an “In-Report” which records all minor damage (minor stains and scratches) that already exist.
Review the management and maintenance “Policy Form” (available under Free Forms) together. Collect post-dated cheques for rent, or if you have multiple rentals you may want to consider a pre-authorized debit system.
Exchange your keys for their cheques. If they don’t have all the cheques, keep the keys until they can provide them.
Send your renter a copy of your rental agreement and the In-Report, along with a handwritten card welcoming them to the home.
A word about renter/landlord relationships:
We’ve all heard the horror stories of bad renters damaging the home they live in. It is my experience that most of the problems between landlords and renters are actually the landlord’s fault in some way. I feel that if renters are treated with a little respect, and if they feel like the owner actually cares about where they live (at least) as much as they care about the rent money, the landlord will have less reason to feel frustrated.
Furthermore, if the renter is given a guide for dealing with issues (see policy form), the renter is far less likely to abuse the home they live in or dishonour the commitments they made.
A word about the Residential Tenancies Act in Alberta:
I’m not a lawyer, but I deal with this piece of legislation every day, and sometimes I’ve had to learn about it first hand, in a courtroom.
It’s strictly my own opinion that the Act as it is written protects the renter, and not the landlord and certainly not the property they rent. This legislation more than any other I can think of is used as a political pacifier tool used by the provincial government rent demonstrates its willingness to stick up for renters.
Resolve disputes on your own, or use the RTDRS (Residential Tenancies Dispute Resolution Service) where you’ll find eviction processes much faster, legally binding, and less expensive than going through the court process.
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