How To Properly Setup A New Tenant In Your Rental
This is part 10 of our Landlord’s guide to Tenant Screening. If you’ve landed here directly don’t worry — we cover everything you need to know about setting up a new tenant below.
You’ve made it 95% of the way there, and this is where you finish the job.
This sequence happens from the moment you decide on the right applicant (when you’re done screening tenants) and ends seven days after move in.
5 Steps To Setup A New Tenant
- Step #1 – Inform The Applicant They’ve Been Approved
- Step #2 – Get Certified Funds and Sign Lease
- Step #3 – Have Tenant Setup Utilities
- Step #4 – Move-In Inspection
- Step #5 – Communication After Move In
This information comes courtesy of Andrew Schultz who is an associate broker and manages 120 doors in the Buffalo, NY area.
The following writing is courtesy of Andrew.
Here’s an email form letter Andrew sends to an applicant when they’ve been accepted.
Once I’ve selected the right tenant, the first thing I do is give them a call to let them know their application has been approved.
I tell them that they will get an email from us explaining all the steps that they will need to take between now and move-in day, and when those steps need to be completed.
I’ll also explain that the remainder of the security deposit is due within 3 business days.
If we’re charging $800 a month for rent, I’ll charge $800 for security deposit.
Every state is different as to what you can charge for a security deposit, so be sure to check your state laws.
In our business, we charge a $200 application fee, which is very high for our area. We do this to weed out the tire kickers and to make sure we’re not taking a loss on the screening process.
We charge $50 per adult credit and background check that we run. We run a background check with RentPrep on each person 18 and older that will be staying at the rental.
After paying for the credit and background checks, we are still left with some funds remaining from the $50 which helps us to cover the office overhead of screening.
For our approved applicant, we eat that cost and roll the $200 into their security deposit.
For denied applicants we refund the unused money back to them. So if a denied applicant had 2 adults, we would refund the $100. In some cases when a person has lied on their application, we will not refund them their application fee.
We have the applicant sign off on this policy at the bottom of their rental application as well, so they understand the consequences of putting false information on their application.
When the applicant pays the remainder of their security deposit, we have them sign the lease. The applicant has to initial the bottom of every page so that they can’t claim they never saw / never read / never agreed to a portion of the lease.
Also, they must sign the lease, a lead paint rider, and because we manage for other clients, a state disclosure form indicating that our responsibility and duty is to the property owner.
We only accept certified funds such as a certified check or money order for the security deposit along with first month’s rent.
If it is month two or three, I’ll accept a personal check for rent but not from the outset.
This is important because (at least here in NYS) if someone takes control of the rental, but their check bounces, we have to go through the entire eviction process to get them out of the rental.
Only accept certified funds for security deposit and first month’s rent.
The form email details their financial obligation between now and move-in day, their obligation to turn on utilities and when they need to sign the lease.
Once their security, first month’s rent, and lease are taken care of, it is now on the tenant to have utilities turned on.
We call the morning of the move-in to make sure the account is established, so the utilities are coming out of the property owner’s name.
We let our tenants know up front that we will not hand over the keys if the utilities are not set up.
We let the tenant know to call at least a week in advance as there might be some delays with the utility company.
I covered this in great detail with RentPrep because this is a very important step in the process.
In order to protect your security deposit you want to a thorough move-in inspection.
Make sure you take many good time-stamped photos of the rental the day before the tenant moves in.
You’ll also want them to sign a move-in condition form to confirm the condition of the rental.
Your photos and that signed form will come in handy when the tenant moves out.
A security deposit can be used up quickly so those photos will be your proof that the tenant caused those damages.
On move-in day I already have a signed lease with certified funds cashed for security deposit and first month’s rent.
The day before, I’ve completed my move-in inspection documentation and photos.
I’ve also verified that the utilities are set up so I will meet the tenant at the property with the keys.
When the tenant arrives at the property, I ask them to go through and look for any damages that they would like noted on the move in inspection sheet.
I’ll give the tenant the keys and explain that they have seven days to report any additional damages I may have missed in my inspection. I do this to set the relationship off on the right foot as it shows I’m willing to work with the new tenant.
I typically have them email me the photos of any additional damage so that I can compare their damage photos to my original photo set to see if the damage was there at turnover, or if the tenant caused the damage during their move-in.
I’ll also call after a week just to make sure everything is going well and if they have any questions.
I’ve done hundreds of move-ins, and this is the process I use. Hopefully it helps you as much as it has helped my business.
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We’re happy to put together a thorough guide and show you how to find and place a renter in your rental property.
We hope you use RentPrep for your future background checks. If you ever have questions don’t hesitate to reach out to us.
Tenant Screening Checklist
Understanding Tenant Screening Laws
Tenant Screening Criteria
Advertise Your Rental Property
20 Questions To Ask Potential Tenants
Showing Rental Property To Prospective Tenants
Free Rental Application Form
What Does A Rental Background Check Consist Of
5 Problems with Tenant Screening Services