You just bought a property! Congratulations! But, now that you own a property and have your basic structures set up, there’s 3 steps you need to take right away to fully take ownership and get everything ready for smooth sailing.
Step 1
Write a letter to the tenants letting them know you’re the new owner and let them know of any changes that will be made. You should receive the tenant’s email addresses and phone numbers from the previous owner. Worst case scenario, you know their address so you can post the letter on the door or send it in the mail.
We always email the letter and send a text message letting them know to check their email for the letter. If they have an iPhone, we’ll also send a PDF with an iMessage right from our laptop. In this letter you’ll give the tenants your contact information and let them know how everything will operate with you as the new owner. You’ll tell them how to pay rent, submit maintenance requests, and who to contact in case of emergencies.
You should also ask them to let you know of any repairs that are needed or wanted, big or small, and let them know you will look at each issue and make the repairs you feel are necessary. You’ll also want to inform them of the increase in their rent if you are raising rents right away. We’ll go over how to strategically raise rents in a different post.
Step 2
The second step to taking ownership is to get the keys from the previous owner and set up your on-site lockbox. Make sure you have both the door key and the mail key for every unit in the building (you’d be surprised how often there are missing keys).
You’ll have to test them to make sure they work, so pick a day and time and notify your tenants about when this will be so they don’t think someone is trying to break into their house. If the tenant responds and gives you permission, you’re fine with any amount of notice. If they don’t respond, you’ll need to check your local laws about how much notice is required before entering, but in most states, a 24 hour notice is just fine.
We recommend using this as an opportunity to meet your tenants in person and so they can put a face to their new landlord and property manager. Honestly, neither of us tell our tenants we’re the owner of the property. Our tenants just know us as the property manager.
If no one answers when you get there, send a quick text to your tenant in case they forgot, but if no one is home or if they don’t respond, you can still test the keys as long as you gave the proper notice. Anytime you’re entering a tenant’s property without them answering the door, knock as you open the door and announce yourself by saying something like, “Hello, it’s management. I’m here to test out the keys”.
If any keys don’t work, ask the tenant’s to make 2 copies for you and let them know to send you a picture of the receipt and you’ll reimburse them.
Once you have working keys, you’ll want to keep 1 set at home and 1 set on site in a lock box for contractors to use when needed. If you have more than one unit, you’ll also want key tags to keep each key straight. Make sure you get a big enough lock box, it’s harder to find than you’d think! After trial and error, the only lockbox we use is one they sell at Walmart, but it’s in stores only, so hopefully they have it in stock at yours. You can probably also get it on ebay if you don’t have a Walmart nearby or they don’t have it in stock.
The lockbox says it has a 10-key capacity which is perfect for having 4 keys, key tags, and a key ring. We’ve tried 5 and 6-key capacity options, but they really don’t even fit 4 keys when they are attached to a key ring, and that doesn’t even include tags which are really nice to have! Good Key tags are much easier to find. You can get some plastic ones on Amazon, they seem to hold up pretty well, even if water gets in the lock box when it rains.
Try to attach the lock box to a railing, or if there isn’t a railing, you should at least have a gas line or some other permanent fixture you can attach it to. Having an on-site lock box is an absolute must for remote management (unless you have remote keypad entry which is super nice).
Step 3
Finally step number 3: set up your utilities and landlord agreements. If you have a multi-unit building, you probably have some utilities that go in your name and stay in your name like the water and sewage. You’ll want to set that up and we recommend putting it on auto-pay to keep your job easy.
For the utilities that go in the tenant’s name, you’ll want to set up a landlord agreement. This makes you the back-up for when the unit is vacant in-between tenants or in case the tenant doesn’t pay their bill. You’ll occasionally have to forward a bill to a tenant who got their utilities set up a few days late, but that’s a lot better than getting your utilities shut off and being charged an activation fee to turn them back on. We also recommend putting your landlord agreement on auto-pay.
Setting up landlord agreements is pretty easy. We usually will just call the utility company to get it set up. They’ll send you an agreement to sign (usually they’ll send it in the mail). Once you sign that and send it back you’re good to go.
And that’s it! Once you send a letter, get an on-site lock box, and set up utilities, you now have full control of the property and it’s time to start maximizing your earnings through effective property management.
Your real estate coaches,
Dallas & Greg
