Way to go! You’ve placed your ad, held the inspections, received and screened the applications and finally chosen some great tenants. So what’s next? There are some important things to accomplish before you can hand over the keys. Setting the stage now, before your new tenants move into your property, is incredibly important to get right.
Luckily for you, I’ve created this new tenant checklist, or more specifically, 10 steps you need to take care of before your new tenants move in.
The aim is to lock your new tenants in ASAP after you approve their application, and to set the right standard as to how the rest of the tenancy will unfold. Getting this right now will ensure the next year or two of the tenancy runs like clock work.
I have also included a bonus section about Rent In Advance. The simple diagram seems to help everyone understand the concept, so don’t miss that.
If you’re short on time, download this short version and come back later.
Picture this, you’ve just finished checking through the applications you have received on your property and you have decided on one…Lets Go!
New Tenant Checklist
1. Notify your tenant
When you’re happy with a tenant application and you want them to move in, it’s time get them locked in so you can take the ad down and celebrate with a cold drink.
Here’s what you do;
Give them a call and let them know the good news. (If they’re excited, that’s a great sign.)
Let them know that you’ll start drawing up the lease now and send them an email about the first lot of rent they’ll need to pay before you can take the ad down.
Just so you know: This first rent payment is sometimes referred to as the Deposit. But as this Deposit is counted as rent, I prefer to call it the first rent payment instead.
While you’re on the phone, make sure you confirm a couple of important details so you can start drawing up the lease:
- Lease length
- Lease start date (date they want to move in)
Everything else should be as per your ad and their application.
2. Set your ad to Under Application
Now, of course I’m sure you want to stop getting calls and emails but you still want to keep the pressure on your new tenants to get the first lot of rent paid and lease signed.
To do this, change your ad heading to “Under Application – No Further Inspections”.
3. Draw up the lease
Straight after you change your heading to ‘Under Application’, download the lease also known as the residential tenancy agreement. You can fill out the lease right on the computer, so there is no need to print it out.
Here are state specific residential tenancy agreement templates you can use:
Tip: Don’t sign your part of the lease until they have signed. Fill it all out, except for your signature.
Beware: If there are any concerns that the property may not be ready for the new tenants to move in on the lease start date, hold off on signing the lease. Otherwise you might be liable to find separate accommodation for your new tenants.
4. Email the lease, rent and bond information
Get this done as soon as you approve your tenants. Being prompt now leaves a great impression on your new tenant.
What you put in this email is important, since it sets the scene for what needs to happen between now and when they move in.
I have written an email out for you. Just fill in the gaps and send.
Warning: Don’t forget to attach the Tenancy Handbook (known slightly differently in each state) with the lease, it is your legal responsibility to do so.
Tip: Being able to sign the lease in person gives you an opportunity to point out their important responsibilities as part of the lease. For example, what you will do if the rent is not paid and how they should inform you of any repairs and or maintenance requests.
5. Lease Signed and Rent Paid!
Congratulations, if you have your tenants signatures on the lease in your hot little hands and the rent in your bank account you have officially leased your home. Well done.
Now it’s time to remove you ad from all of the sites.
When you accept an application, most times you will need to turn one or more down. It’s a yucky job, but you’re better of telling them first before they come looking for answers. Here’s how to do it.
Your goal should be to have everything above done within 48 hours of telling your new tenants that they were accepted. If, for whatever reason your new tenants do pull out, you’ll have not lost a lot of time and hopefully your other applications still sitting there ready to be checked.
6. Give your tenants a receipt. (This is powerful)
Now that you’ve got what you need from your tenants, you need to provide them with proper confirmation that you have received their payment.
They will really appreciate your professionalism, and best of all, it shows them you keep good accurate records of their rent. Setting the right scene now helps keep your tenant in line later on.
BONUS – Simple way to understand Rent in Advance
A lot of property owners ask me what rent in advance really means and when the tenants should pay their second lot of rent. Rent in advance is the just the term to say tenants must pay the rent upfront before living in property. Think of it like pre-paid mobile service. You buy the credit, then you make all the phone calls (use up the credit). Once the credit has run out you buy more credit. Same with rent in advance. The tenant pays rent, lives in the property for those days they have paid for, then the rent is paid again.
The rent in advance (or prepaid rent) is just rent paid in advance, it is not an additional security deposit.
Here’s a diagram to show you what I mean;
In the above example, the tenant was approved on the 18th December. On that same day, the tenant signed the lease and paid the 2 weeks rent in advance (first two weeks rent). (The bond was also paid but that’s not part of this story.) After Christmas, on the 3rd of January, the tenant moved in. The tenant lived out the first two weeks rent that they had paid for. But on the 17th January those days had already been lived so the tenant needed to pay a further 2 more weeks rent.
The amount of rent in advance you can ask your tenant will be different depending on which state your property is in. Below is the maximum rent in advance you can ask in each state. (The maximum is rent in advance is typically what most owners or agents will ask of their tenant).
7. Follow up the Bond
As you get within a few days of the lease start date (move in date), it’s a good idea to follow up with your tenants to make sure the bond cheque has been organised and ready for you. This could just be as simple as a text message, but it will ensure no issues come move in day.
8. Complete the Condition Report
You must complete the condition report as close as possible to the day they move in. The day before is perfect. This condition report will be the proof of what the property was like when the tenants first moved in. The more thorough the report is, the easier it will be to claim any damages or cleaning issues at the end of the tenancy. I have also found over the years, the better my condition report is, the cleaner the tenants leave the house when the move out – this is because they know they have nowhere to hide!
NSW Properties: The Residential Tenancy Act requires you to provide a copy of the condition report when the tenant signs the lease.
9. Sign the bond lodgement form and hand over the keys
This is the moment you hand over the keys, but before you do, here’s a quick checklist of things to ensure is done BEFORE you hand over the keys and the tenants lose all motivation to listen carefully to you:
- The bond cheque is given to you
- The bond lodgement form is signed by you and the tenants
- The tenants have a copy of the bond lodgement form (this also acts as confirmation you have received their bond cheque).
- The condition report has been signed by the tenant to say they have received a copy
- The tenants are aware of how to inform you about any repairs and maintenance
- The tenants are aware of what will happen if they fall behind in rent
- The tenants are aware of any special conditions in the lease
- The tenants have signed to say they have received the keys (a photo of the exact keys is perfect).
10. Send the Bond off
A simple step, but don’t forget to post the original signed bond lodgement form and the bond cheque to the Bond Authority in your state as soon as you have them. The Bond Authority will issue you and your tenant a formal receipt.
I’m sure this will help you get off to a great start with your new tenants. Putting the effort in now will save you many hours during the tenancy. Get ready to put your feet up and watch your good work pay off.
If you have found this new tenant checklist useful please share with your friends.
Download the short version of the new tenant checklist