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16 Points To A Bullet Proof Lease Signing - YouTube
Channel: Derosa Group
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hey guys this is Liz from DeRosa group
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here back with you this week to talk
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about the importance of lease signing
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and all the things that go into having
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an effective lease signing meeting with
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your new tenants
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I have Joshua here say hi Joshua how you
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guys doing Joshua is our property
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manager and I thought he's doing these
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every day with our tenants and our new
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tenants so I figured I would interview
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him asking a couple questions and then
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together we're gonna actually go through
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line by line the things that we go
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through with tenants when we're sitting
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down and doing a lease signing which is
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a very exciting thing in this real
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estate investing gain but we thought it
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was probably one of the biggest things
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up landlords don't they don't really
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properly prepare and then I'll properly
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do so we thought this would be a great
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topic to share with everyone here on
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BiggerPockets and so with that I'm gonna
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ask my first question so Joshua you've
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done a lot of these lease signing
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meetings and you know with our with our
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prospective tenants and our new tenants
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what do you think is the most important
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thing that things that new landlords
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need to do as well as existing landlords
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when it comes to lease sign well I think
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um it's important that the landlord
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that's conducting that lease signing set
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themselves up for success and a good way
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to do that is to develop a system a
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checklist of some sort and by doing that
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it allows them to be consistent in their
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approach to each lease signing that they
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do and if they end up having someone do
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it for them they at least have a system
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in place that they can train that person
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to follow up in and definitely have a
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nice reputation in the air who presiding
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well on it when it comes to you know the
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lease process most people think it's
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just a matter of signing a lease and
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being done with it
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what are you talking about a process why
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do we need a process but actually
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there's a lot more that goes into
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preparing and the preparing at least
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that the items that you know really that
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go along with the lease and I want to
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explain that
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so again what we really want to get
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through to you is that it's not just the
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lease the lease is the most important
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but there's a lot of other things that
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go along in this process absolutely to
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make sure you're starting off on the
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right foot this is the first step to
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onboarding your new tenants so it's
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pretty important so with that we're
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going to go through
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the 16 items that we have on our
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handy-dandy checklist okay and we're
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going to walk walk you through each of
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them I'm going to take half and then
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Joshua's gonna go through half so the
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first one that we want to recommend to
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you is prepare three sets of keys for
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your new tenants so you might be saying
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why three sets number one you want to
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have an extra set in your office or
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wherever you keep your keys number two
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obviously you're going to give a copy to
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the tenants and three you want to have
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an extra and the extra is when the
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tenant may lose their keys or what have
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you and that has happened a lot right
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locking out and that happens a lot so
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three steps wide it's the first thing on
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the checklist or should be the first
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thing on your checklist is because
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you're really busy you have a tenant
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coming in the next day to meet with you
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to go over the lease and the least you
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know documents and then they get there
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and you're like oh no where are the keys
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and you don't always have the keys
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preparing it might seem kind of obvious
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but I gotta say that's one that will
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sometimes get missed if you don't have
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this front and center second thing
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second thing you have to have before as
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you prepare your kind of lease process
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number two is you want to have obviously
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the lease that's pretty obvious but what
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I recommend to you is when you are going
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through the lease with people and I'm
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sure you do this Joshua all the time
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every single page when you're going
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through the highlighted information with
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them have an initial each page so they
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shows their kind of commitment to I
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heard you say that about noise or
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illegal activity etc so have an initial
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each page that's the second room number
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three you always want to get a copy of
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the driver's license every single person
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that's going to be living in that unit
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right so that and that could be driver's
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license or anything equivalent to a
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driver's license a passport would have
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you number number four is the security
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deposit obviously you know for New
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Jersey it's one of one and a half months
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rent other states and then we do some
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work in Pennsylvania as well it's one
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month it's a first month and at last
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month first month next month Josh mine
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knows more about this too but so
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regardless you got to know what your
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state requires and what's kind of legal
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to charge is a security deposit but
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really we leave our rentals in Jersey
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and Pennsylvania so that's what we're
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we're
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so no no it's no it's required and and I
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obviously implement that where we got
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the big thing obviously is the first
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month's rent and this might seem obvious
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but we've had people we've talked to new
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landlords or even existing landlords
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where they give over the keys and you
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know the tenant has some of the money I
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would be very wary of that so that's a
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requirement you need to have obviously
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the first month's rent again might seem
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obvious but we've heard stories that
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would would not always have that as the
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situation next part we have a thing
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called the utility transfer agreement
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what I mean by that is I'm sure you've
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seen this and you you Joshua experiences
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this because he ends up following up
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with our tenants that haven't switched
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over the utilities but when you're
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renting to a tenant a person in a
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multi-family not so much a single-family
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home but a multi-family by the utility
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is often need to get transferred right P
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you know electric gas water and tenants
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don't always do that as quickly as you
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need them to so we actually have an
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agreement and we charge them a fee if by
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a certain date that they don't switch
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over their utilities pretty simple but
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we actually make that a pretty important
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point so because we've had that where we
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continue to get the bills when the
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tenant is already there so you want to
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protect yourself next thing and our
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lovely checklist is that we have this
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thing called truth and renting and it's
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a basically it's a policies and
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protection for the tenant in the state
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of New Jersey most landlords don't give
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this out they don't speak of it but it's
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a it's from a legal perspective it's
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really important to give this out so
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tents do know their rights that is
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important you want to be the landlord
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that actually shares you know that with
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them roasts versus making believe
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there's there's none so you know they
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have rights and you want to make sure
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that they know them and that you're
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doing what's that's right in the eyes of
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the law the last one actually I'm gonna
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take I was taking half of this and
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Joshua is taking another half and I was
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about to get into his part so I'm going
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to give the floor to Joshua I just
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shared about half of the important forms
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and pieces of our lease signing process
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and and kind of procedure and Joshua is
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gonna take the next half yeah so like
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you know we talk about taking care of
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our tenants and send them up for success
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with two for renting
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same thing goes with lead-based painting
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documents that we give them it's pretty
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much a document that allows the tenant
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to understand that we don't want them
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licking the walls and different things
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like that certain houses you know have
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been do certain paying jobs and
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different things of that nature so let
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base paint document moving on from that
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one though we have move out charges and
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this is an important one yeah this is
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very important we like to make our
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tenants aware upfront of what the
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charges look like if after they leave
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from the place and move out when we go
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back in there we're looking at this
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place we're looking at the charges and
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we're going to look at this sheet that
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they signed that they agree to and if
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there's anything that we need to make
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charges out the security deposit is
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going to be referenced out of the sheet
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so that's a very important one
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we went out from that one is smoke
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detectors carbon diet carbon monoxide
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detectors this sheet is just a sheet
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that again just makes the tenant aware
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that they share some responsibility
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making sure these different parts to the
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house are up to where they should be to
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make sure that their family's safe but
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also and liability reasons too we want
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to make sure that they're on top of that
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the next area is ten emergency contact
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information which is very important
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because what happens is if we can't get
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a hold of the tenant because they've
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changed a number or something like that
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this allows us to get over there you
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know family member but also in the event
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of emergency the sheet is an emergency
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contact sheet so any event of mercy we
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need someone to contact it this sheet
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helps us have a third party that they
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are connected to if we need to get in
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touch with them or if we need to notify
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people and I'll just add one more
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another reason for the emergency contact
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information is that if you ever in a
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collection situation which we are you
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know we working with a great collections
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agency right now where we give them all
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that so now they have more information
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about that person so it actually has two
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you know two good reasons why you want
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to get that emergency contact for
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everyone that's going to be living
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the unit not just for the person signing
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the lease you want that emergency
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contact sorry taking Joshua's Thunder
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that's just how I am
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yes she's obviously writes a collection
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so emergency contact infos very
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important to this whole process pet
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agreement form you know whether they
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have a pet or not you know you can
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determine that on your lease but it's
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important to have something set up where
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if you're gonna charge an extra that's
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entirely up to you but it's important to
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have some guidelines some agreement
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their pets can make a mess if not
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supervised so I'm handing over the keys
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after that that's a given but I also
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provide we like to provide them our
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contact information it's not so much
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just us contact their contacting them
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but they have to get all of us so we try
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to be as clear as possible how the
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different forms of different avenues
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that they can reach us and then lastly
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in the state of New Jersey at least we
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know this to be true as we have them
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sign a w-9 form or a w.a form and that's
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just a form that the banks over here
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require that would give our tenants when
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it's time to do a security deposit and
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within those banks and stuff like that
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so thank you yeah exactly so you want to
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make sure you're gonna obviously be
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giving your security deposit over to a
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bank and and then gonna have certain
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requirements certain forms that need to
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get signed from the tenant not just not
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just you so you need to figure out what
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that is for your own state but for for
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Jersey it's actually New Jersey it's a
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w-9 form or aw8 form because sometimes
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there's different forms for people who
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are US citizens and non-us citizens so
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you just want to make sure you're using
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the right forms the only other thing you
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missed was the same appreciation
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absolutely so what is that job tell
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everyone so every landlord has a
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different approach some landlords
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believe or not don't do this but we
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prize ourselves we're proud of this
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process of pretty much we have them oh
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there's a sheet that we give them at
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least signing making them aware that we
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have
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a program or something that's in place
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where if they pay rent on time every
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month at every corner they get into kind
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of like a rolling up contest the contest
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yeah a fun contest and then polling you
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know and if their name gets pulled out
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then they get a $50 gift card or at the
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end of the year if they paid on time the
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entire year then we give them a TV so
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there's more details to that but you
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know that's pretty much what it looks
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like in movie should we share that with
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them at that point before they even you
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know before they even became a tenant
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for a long time they write the beginning
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you want to teach them how we're going
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to reward for not just obviously you
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know not victim but most importantly
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like a positive incentive yeah it's not
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in contrast yeah I think it puts a I
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think it puts them in a good step
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forward yeah and encourages them to want
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to pay on time that they have any idea
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not to you know so so I hope this was
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helpful for all of you we're happy to
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share our checklist with you and know
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folks have asked us for other documents
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I'm always happy to share what we're
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using so can help either new landlords
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or existing landlords but the key is the
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lease signing process is more than just
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the lease it's actually a process and
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you should have a you should have a
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system you should do it consistently and
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you should create forms that are the
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biggest things that people either miss
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or the biggest things that can you know
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bite you you know at a later date so you
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want to really protect yourself and
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we've had a lot of luck with that and we
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create a little checklist so we don't
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forget anything so I hope this has been
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helpful glad you joined us here this
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week Joshua I think you'll be seeing
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more more from Joshua but thank you for
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watching and I'd love to hear from all
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of the folks you know that watch this
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today you know what have you found to be
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really important when you're signing a
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lease with a tenant and what are the
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biggest things that people need to know
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so they become they're protected and
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they also do it you know in the most
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effective way so thanks for watching and
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have a great day
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