As a real estate investor, the most important legal document in your file cabinet is the rental lease. This document outlines rental terms to leaseholders and tenants, ensuring rules are followed to avoid eviction, arbitration, or other legal consequences.
How you draft this document is essential.
You don't want to write it by yourself. You need an experienced real estate lawyer to help you set the terms of the lease. Legalese language ensures these terms are enforced by the rule of law.
Learn more about lease enforcement in the following post.
How to Determine the Terms of a Lease
First, think about your ideal tenant. This "ideal tenant profile" is the foundation of your lease terms. Create a list of expectations.
Your expectations of a tenant should include:
- Paying rent on time
- Rental deposit amount
- Providing financial proof
- Employment verification
- Proven identification
- Clean background check
- No property damage
- Adding additional tenants to the lease
- Rent payment expected
Your lawyer will add even more details to the lease, including information about property maintenance. As a landlord, it's your responsibility to ensure tenants are living in safe, clean units that are up to code. Remember to state your responsibilities in the lease agreement to attract (and retain) great tenants.
Property tenant procurement protocol will help enforce the terms of your lease by screening for only the best tenants.
The lease should also include the current rental price. You're allowed to adjust this amount according to your city's rental regulations. You'll have to draft a new lease every time you adjust the monthly price.
Practice Excellent Communication
A clear and assertive lease contract is also a form of communication.
Your tenant must take this lease seriously. Should a case go to arbitration (or court), the legal community must also take this contract seriously. Language matters!
Your property manager should have this lease handy as they show the property to prospective tenants. Lease terms are often the first questions asked by leads. Lease documents should also be available online (and via email) for convenience and decision-making.
Property managers should be available to answer questions about the lease via phone, email, video conference, and open houses. Leads may also sign leases in-person at viewings or remotely online using digital signatures. Lease documents may also be available in a tenant's online portal on the property management's website.
Tenant Screening and Lease Enforcement
One of the best ways to mitigate lease violations and other leasing issues is to screen properly for tenants.
A property management company should spare no expense in finding the perfect tenant; these are the types of tenants that prevent property damage, conflicts, and renew leases.
Always avoid online background check services. These websites don't provide trustworthy information and may lead to problems with lease enforcement.
Remember, you can screen for prospective tenant's past history with landlords to get a clearer picture.
Streamline Your Leasing Process
Landlords need a hassle-free lease management process to ensure consistent income. Remember to be clear about the terms of your lease, practice excellent communication, and don't go halfway with tenant screening.
PMI Atlanta West wants to handle all of your lease management responsibilities. Learn more about our leasing services or call us to speak to an expert about your options.
