The Landlord’s Guide to Mid-Term Rental Tenant Management (Part 3)

Welcome back to the Short Term Rental Riches podcast. Here we are on part three of our three part series for midterm rentals. I know that's a lot of parts, but there's a lot going on here and there's a lot of opportunity with midterm rentals. These are sort of that limbo space between our short term guests and long term tenants. So we've learned a lot. Stay tuned. I'm excited to share part three where we talk about how to actually manage your tenants or your short term guest turn tenants while they're in your property. The move in, the move out process, returning the deposits, all that fun stuff. Stay tuned. Let's jump in. Welcome to Short Term Rental Riches. We'll discuss investing in real estate, but with a specific focus on short term rentals. Quick actionable items to acquire, manage and scale your portfolio. I'm your host Tim Hubbard.

Welcome back to the Short Term Rental Riches podcast. We're talking about medium term stays. This is essentially when a guest becomes a tenant and although this varies a little bit state by state, most of the time it's 28 to 30 days or more that guest becomes a tenant. And so there's a lot of things that we need to do differently to protect ourselves and to protect our property. So we've talked about a lot of those already. If you missed episode 211 and 212, go back and check those out. The first one we talked about setting up our listings in the the best way possible to attract the most long term guests, where to actually post our properties, which sites to post on. Then the second piece we talked about all that sort of middle stage piece where we get guest inquiries, what do we do with the inquiries, how do we vet our guests, where do we run the background checks, where do we get a lease from, how do we get our lease signed? All very, very important things. And in this third piece, we're going to assume we already got some great inquiries and we got some great guests turned tenants that are getting ready to check into our proper how do we best manage them? So the first thing is the move in. Before we even do the move in though, we want to make sure that our guests or our tenants are fully informed about the property and where they can pay us, what responsibilities they might have, what responsibilities we might have. So essentially we want to provide them a summary. And in this summary we're going to have quite a few things. I want to break them down for you here real quickly. The first thing is we want to welcome them to Our property, right. This is going to be a longer term relationship. We're hoping that they're going to stay there month after month. And we also want to get in the habit of welcoming all of our guests or our tenants in this same fashion. Right? So we want to have a nice welcome message. We want to let them know where they can reach out to us in case they have maintenance. Hopefully you've taken these reservations and put them into your short term rental property management software so that you can just use your same message to templates. If you have team members helping you out virtually, then they see the reservation, they see the guest or tenant in this case, and you can go about your operations pretty much as you would with a short term guest. Now, if you happen to have gotten this guest reservation outside of one of the traditional short term rental sites like Airbnb or VRBO that's not linked into your software like Furnish Finder, then you're gonna wanna put them in your property management software. So most of the time if they have a maintenance issue, they can just reach out directly to email or by phone number and it's going to be linked right in your system. So make sure they know where they can contact you and that you're there for them if something does come up. Second piece, we want to remind them where they can pay future rent if it's not already set up automatic. Hopefully it is. Remember, we have two options for that. So we can use Stripe, which a lot of us in the short term rental world are already using to charge reservations. We can give them the option to pay for everything up front using a credit card. You want to make sure you charge a credit card fee for that. But that is a good option for a lot of people out there. The other one is to take ACH payments and we're recommending that you use apartments.com for that, which makes it pretty easy, sends reminders, all that fun stuff. Pretty basic program, but it happens to be free. And it's also easy on the tenant side. Remember, it's also where you can do their background check and it's also where you can store their lease. So we want to remind them where they can pay and when we're expected to receive that payment and where we're expected to receive it. We want to reiterate things like utilities. So most of the time we're covering all of our electrical, our gas, our water, all of these things when we have a short term rental guest. But you may want to consider having some sort of limit on Utilities. If you have a property that can just get out of control, maybe you have some sort of limit. Otherwise, you just want to make sure you note that right in there. One thing that you very likely are going to want your tenant to take care of is the trash. So taking out the trash, you want to remind them when they come around for that, you might want to have a note in there. In terms of furniture property updates, remember when someone's staying in your property for multiple months, they're going to feel like it's their own. They might want to paint a wall or they might want to add some plants somewhere. Or in my case, I'm actually staying in an Airbnb right now in Medellin, Colombia. I sold my property recently and we're sort of in this period where we're developing a small community of short term rentals. I'm running a place, but I went out and bought a desk because there wasn't a desk that I liked. And you know what, I'm going to be leaving that desk here instead of putting it in storage. So sometimes your longer term guests or your tenants are actually going to add nice furniture to your property. It's going to feel like their own place. It is their home for the next few months. So you're going to want to cover any notes around that you might want to include something real quickly in there. About lease extensions, we recommend that you just have your lease go to a month to month basis. But remember, remember you're going to want to make sure that your calendar is open for them to actually stay longer. So you really got to plan that out and make sure that you're not blocking your calendar for too much time. Hoping that they're going to book it. I would recommend, this depends on the market, but I would recommend that you require a decision from them within two weeks of the date of their original lease expiration. That way you still have some time to advertise your property if they are not going to be extending. So basically we just want a nice summary. Welcoming our tenants, welcoming our guests, highlighting the most important facts, letting them know where they can reach us, or anything that might be specific to our property that wasn't obvious that they need to know. So there's one more piece here in regards to the move in and that is traditionally in the long term rental world, we get our lease signed. We also get a move in document signed to where when the tenant moves into the property, they have a certain amount of time to say, hey, the fridge is damaged or it's not working or I saw this hole in the wall. They basically want to document any damage in the property so that when the time comes for us to return their deposit, we're not deducting existing damage. Now, if you've listened to a podcast for a while, then, you know we already have a rule like this in our short term rental house rules, which basically says you have three hours from the time you check into our property to let us know if there's any sort of damage, if the cleaning didn't meet your standards or whatever it happens to be. And that actually protects us on the back end. If someone made a claim on Airbnb, for example, and they told us three days after the reservation we can go back and reference that house rule. So we're essentially doing the same thing here with our long term tenants, our medium term reservations, but we're taking it a step further. We're going to want them to really thoroughly document that property. So we're going to require that they take a video of the property and any sort of damage or anything that they see that they want us to know and then we're going to want to receive that video within, you know, you name it. But I would say within 24 hours of checking into the property. Again, this is after our housekeeper or one of our team members has done an inspection on the property prior to their arrival. So we're also going to want our version of this too. Right. So it's really good idea. The same thing, just go around the property, take a video. So also helps us remember what furniture we have in there so that nothing kind of gets left out in the end. So we want that move out document back from them in the form of video. Again, these are messages that we can pre program in our short term rental software after we've added these guests as a reservation. Okay. During the reservation, sometimes some things come up, don't they? Just like they do with our short term rentals. So one thing that might come up is in regards to supplies, I highly recommend that in your lease you mentioned that you will have a initial supply of toilet paper and these types of things. That way there's no confusion on who's paying for what. But let's say something else comes up and you know that the toaster stops working or the blender stops working or something like this. You can simply order things on Amazon these days in most markets, send it to your tenant very quickly, Just send it to their address to make it a lot easier on you. You don't have to pay a maintenance technician or someone like that to actually go out to the property. So that is a convenient way. If anything that's easily replaceable comes up during their stay that you're responsible for, just check out Amazon and send it right over to them. We like to do a medium term stay clean at about the 15 day mark. This allows us to get into the property to have an eye on it, make sure that there's not something going on there that we didn't know about. So to make sure they didn't have multiple pets in there or something like that. Now this is a fee that we're going to charge to the guest. It's going to come out of their deposit, so out of the non refundable part. And this is again something that we're going to have in our lease. It's also something that we're going to need to schedule with the tenant. So we're going to let them know 24 hours in advance or hopefully just find a good day that works for them. This is also a good opportunity for your housekeeper to make a little more money, right? So you can simply pass your contact over to your tenant and if they would like to have more cleanings in the future, then they have their contact there. And that can be a win win for both sides. Now, during the reservation, sometimes a guest might show up and maybe they're not happy or maybe they don't like your property or maybe it wasn't what they expected and they just want out of it. Well, what do we recommend in that situation? It's never a great situation, right? We always want to set the perfect expectations so this doesn't happen, but sometimes it might. And so I would recommend that you stick with your cancellation policy. That's to say, if the guest actually does not want to stay there and they're like, hey look, this place just isn't going to work for me, I would recommend that you stick with your cancellation policy. Another alternative to that is that you may offer to relist the property right away. And if you're able to find another guest or another tenant to occupy that space, then you will refund them. The difference between what your cancellation policy said and the time that it stayed vacant after the reservation. So as an example, if your cancellation policy is 30 days, they check in, they say, I just don't like the property or whatever is not working out, then I think it's fair for you to stick with your cancellation policy. Remember, that calendar is blocked. So if they leave that that same day for Example, you relist it and then five days later you're able to secure a medium term reservation. Well then maybe consider giving them a little bit more of a refund. This brings up another question, is that a lot of times when someone's going to stay in a property for a longer period of time, they want to see the property first. I don't recommend offer this. It can become a bit of an operational.

I don't want to say fiasco, it's not that challenging. But it's just one additional thing that you're going to have to do and hopefully your property's occupied already. Right. And so you don't want a new potential guest checking into the property where you already have one there. So we don't offer this. We have floor plans for all of our properties. And to go one step further, it's really nice to have an overview video that you can provide your guide, your guest or your the person inquiring to really help them out with the whole decision. Most of the time that ends that conversation right there. And most time, most people are perfectly okay with this. Okay, so we officially listed our property in the perfect places, listed in the perfect way and we got a great guest and now it's time for them to move out. We've come to the end of the road and we need to do the checkout. And so this of course is already prearranged in your lease. They know what day they're ending and what time they need to be out by. We recommend, of course you're going to go in and have your housekeeper clean it. Right. We recommend blocking the calendar a couple days after these longer term reservations because you need more time to account for certain things that may have come up during a three month stay. There's a lot more that can come up than in a three night stay. For example, especially if you have back to back medium term reservations, you've got some someone else checking in for 3 months. If you don't leave yourself a gap and something comes up, maybe they, you know, maybe they did have dogs in there or something, that's going to take quite a bit of time. And that new guest or that new tenant shows up and they don't like your property, that really is a bit risky. So instead of trying, this is my opinion, but instead of trying to get every last second occupied, it's better to make sure that you have a little bit of buffer in there to make sure the property property is perfectly spic and span and there's no damage. You have Time to fix any sort of maintenance that may have come up. At this time it's good for your housekeeper to do the same thing that they did or the person doing your inspection in the beginning to do the same thing and take a video afterwards. And this is going to be timestamped so we're going to compare this with the tenants original video, see if there's any sort of damage or anything like that. Most of those things, especially if you had a great tenant there, are pretty easy to work out. Right. But when it comes to actually sending the deposit back, well, if you are using apartments.com it makes it really easy. You want to give yourself enough buffer time to make sure you actually thoroughly inspected the property. And then you can easily submit the deposit back from apartments.com in form of an ACH payment if you are using some of the new fintech type bank accounts out there. We actually did an episode on Relay bank and the one that I'm using, Mercury bank at the moment, which are really good banking options for paying contractors but also for sending ACH payments. And so that's a place where we could send an ACH payment back to our tenants for free in just a couple days. If you do happen to have any sort of damage come up, well, you're going to want to itemize it and when you send the deposit back, you're going to send it back with an itemized invoice of what that damage actually was. This is one of the places that I've seen I still have a lot of long term rentals as well and I used to manage all my own long term rentals in the past. And this is one point where there can be a bit of discussion if someone doesn't agree with the amount or something like that. So make sure that you're just being really transparent and clear. Honesty is always the best practice. Right. Midterm rentals can be a fabulous opportunity. They can be a great opportunity for anyone that has a short term rental that gets a little slower in the off season. It could be a great opportunity for someone that just doesn't want to have to deal with so many guests checking in and out. So I hope you've enjoyed these three parts, the three parts of this series. We actually combined all of these into a handy dandy ebook. You can get it arrestmethods.com it's totally free. It's also something we're probably going to continue to edit, modify as we learn more and we add new best practices into our own policies. So I want to thank you for tuning in again. I hope that gave you some good insight. I hope your properties are staying booked and until next time, have a fabulous week week.

Want to get on the fast track to financial freedom through short term rentals? Well, it all starts with the properties you acquire, but you want to make sure that you acquire the right properties. I want to give you my ebook that will show you how to do just that. There is no charge. It's my gift to you for being one of our subscribers. Just go to restmethods.com that's R E S T methods dot com.