Leasing real estate to tenants is a complex process that consists of several stages. This article provides landlords with step-by-step instructions on the apartment rental process, including preparing a rental application, screening the tenants, signing the lease, collecting the rent, and ensuring the lessees enforce the leasing terms.
What Is a Lease Agreement?
Leasing a property agreement is a legally binding document between a landlord and a tenant that sets out the terms of the lease. It outlines the rights and responsibilities of the lessor and the lessee, the duration of the lease agreement, the amount of the rent, and other specifics of the lease.
Lease agreements usually contain the names of the parties involved, the address of the leased premises, the term of the lease, the amount of rent, the security deposit, the rules of ownership, and any other terms both parties agree upon. Both the lessor and the lessee must sign the lease agreement, and it has to be notarized if necessary.
Let’s examine the five main types of leases:
- Fixed-term lease: A fixed-term lease involves a fixed rental period, which is usually from 6 to 12 months. This type of lease is common when it comes to renting a house for a single family.
- Monthly lease: It offers flexibility as it may be renewed every month. This type of lease is ideal for those tenants who cannot commit to a long-term lease.
- Sublease: According to this lease agreement, a tenant sublets a part of the property they rent to another lessee. Tenants must notify landlords beforehand, and lessors should carefully consider such leases.
- Commercial lease: This lease type is typically used to rent an office or retail space. These leases are more complex than residential ones, and they are usually conducted between a landlord and a tenant.
- Roommate tenancy: It is used when two or more people live together, and renting expenses are divided between the roommates. Such agreements contain information on renting details.
Leasing Process: 6 Steps to Follow
In rental property management, the real estate leasing process involves a number of essential measures that ensure the safety of landlords and tenants. In this section, we will describe the main stages of the rental process for landlords.
Step 1: Prepare your property for rent
Before starting the apartment leasing process, you need to make sure that the property you want to rent is in perfect condition. This includes inspecting the apartment, carrying out any necessary repairs, cleaning the property, taking photographs, and setting prices.
Step 2: Market your real estate
Once your rental property is ready, you can advertise it to potential tenants. You can do it via online listings, newspaper ads, flyers, or by using other methods. Always make sure your listing includes all the important information about the property, such as the location, price, amenities, and other specifics.
Step 3: Screening potential tenants
The next step is screening potential lessees. Check their reputation, work, credit scores, etc. This will help you ensure that the future tenant is reliable and trustworthy.
Step 4: Negotiate the lease
Once you find a tenant you’re happy with, it’s time to negotiate the lease. Discuss all important information about the rent with potential tenants. Make sure that you agree upon the amount of the lease, duration of the tenancy, security deposit, and other relevant rules and regulations.
Step 5: Sign the rental agreement
The final step is to sign the lease agreement. Ensure that it clearly outlines all the details of the rent. Sign this document and ask the tenant to do the same. Once the agreement is signed, the tenant can move in, and you can begin collecting the rent.
Step 6: Collecting the security deposit
The security deposit protects the landlord if the tenant fails to pay their rent or damages the property. You may collect the entire sum before the tenant moves in. Don’t forget to provide them with copies of the agreement and other important documents.
Feel Safe With Your Long-Term Investment
Though the process of leasing a house or an apartment can be complex and lengthy for landlords, now you are forearmed with knowledge of the specifics. Keeping in mind that the lease agreement is a legally binding document can prevent you from extra stress and potential risks. When all parties take the time to understand their responsibilities, signing the rental agreement is a safe and natural outcome of the deal.
