Perfecting Your Mid-Term Rental Guest Screening, Payments, and Lease Agreements (Part 2)

welcome back to the short-term rental riches podcast I'm happy you're here again we're talking about medium-term rentals this week and this is actually the second part of a three-part Series so if you missed episode 211 go back and check that out we broke down all the places you're going to want to list your short-term rental to attract longer guests we talked about your actual listing copy what you want to put in there to attract longer term guests we talked about streamlining some of your messages knowing

that not a lot of our short-term rental software can accommodate medium-term stays it's just sort of a different animal right we need leases and things like that so go back and check out episode 211 if you missed that this week we're getting into what we do after we get an inquiry and these reservations are different right remember they're much longer and most of the time our guests are turning from a guest into an actual tenant in our proper property so that varies state by state you

want to make sure you look up your state regulations to find out what it is in your local jurisdiction but most of the time that can be anywhere from 28 days plus that means if a guest stays in your property for 29 days or 28 plus then they actually become a tenant and they actually have tenant rights which could get you into a bad place if you don't have a good tenant in your property so we're in this weird sort of reservation length period where we're

really managing a long-term tenant even though it feels like a short-term tenant so the first thing is we need to run a background check on our guest with one potential exception at least one potential exception the way I manage my properties or my team and I manage all of our properties and that would be through Airbnb so Airbnb does have some protection that other listing sites do not right booking.com does not have the same protection is Airbnb and so if you get an inquiry if you

get a reservation from Airbnb definitely make sure that you check the reviews we want to do this regardless of the reservation length but I would say if someone has zero reviews that would make me a little worried our team for example is not accepting anyone with less than two reviews and good reviews and so we have the ability to deny guess if we're accepting inquiries right and most of the time when we're trying to rent our properties for a longer period of time we've switched them

to inquiries so definitely make sure that you're looking at the reviews for any inquiries that come across uh and that you are not overlooking anything right if anything seems fishy make sure to ask some more questions uh if this was an instant book well remember you can have those reservations cancelled if you are concerned about the safety of your property if there's lack of communication something like that make sure you really investigate those listings you don't let just anyone stay in your property now for everything

outside of Airbnb so we talked about vbo and booking.com and furnish finder if you happen to be on there apartments.com which also syndicates other listing sites like corporat rentals.com for example all of these other sites I'd highly recommend doing some sort of background check right ideally doing actual credit background and a criminal background check to me the easiest place to kind of manage all this together is through apartments.com because we're going to want to have a lease as well I'm going to get to that in

just one second but we can use apartments.com rent manager to have a potential guest automatically run a background check on themselves so what does this look like if you get a reservation inquiry from vbo for example let's say it comes across your property management software well you're going to want to copy a link from apartments.com where you also have your property listed copy that link and send it through your property management software back through VRBO to run the credit check that way now there's also some

other programs like super hog you may have heard of that can do a background check but it's not doing a fully extensive background check like apartments.com for example so make sure that you're running a background check on all of your guests before they stay in your property we're using apartments.com rental manager to help facilitate that again at least at the time of this recording unfortunately there's not a short-term rental specific program out there that's also handling all of these long-term type things so we sort of

have to do the best with what we have right so make sure you're getting a background check and you may want to go further than this right you may want to get proof of income right this is something we do traditionally in the long-term rental world so asking for two recent paychecks for example if this is a traveling nurse well they're usually going through some verification so you may not require that from them but this is one of one other extra step of protection you may

want to ask for a reference from a prior landlord that's a pretty easy one to do right when you run these background checks they do charge you so I would recommend that you just charge the guest this way you also know that it's a serious guest as well that they're actually serious in your property most of the time these are like $29 uh to run a background check again we're using apartments.com but if you're using furnish finder for example they also have what they call Key

check it's another option uh that's sort of built in or integrates with furnish finder so let's say we got past that part right we properly listed our property on multiple different platforms we got some great inquiries we ran a potential background check or we had the guests do it themselves remember we can just send the link to them now we need to move on to the lease stage right we definitely want to have a lease for anyone that's considered a tenant in our property this is

just standard property management 101 right because if you don't have a lease well then you're not really protected and it it could you don't have rules essentially for your property so you can go to places like biggerpockets.com $99 can get you a lease for pretty much any uh lease no matter what state you're in if you happen to be a real or you happen to be friends with the realer a lot of times they have those in the National Association of reals documents you might ask

a friend to give one to you but we want to make sure that our lease is set up a course for our property it the terms of the reservation in there uh after the lease expires remember these aren't usually long-term leases like annual leases so I recommend that you just keep it month-to month a lot of these types of guests that we're getting might be displaced because of insurance maybe they're working on their property and they need additional time if it's a traveling nurse a lot

of times they go from three months maybe they add on longer stays after that so it's nice to have that availability for them but of course you want to make sure that's outlined in your lease as well as your cancellation policy so if they cancel again I recommend a strict cancellation policy you want to outline all of your utilities there so most of the time we're covering all of these right but maybe you have a property where the gas bills can just be outrageous and you

don't want to be spending more than $1,500 a month you can outline in your lease that says we'll happily cover utilities up to $1,500 a month or whatever it happens to be do you cover internet are you covering the track cash service is there snow removal where you happen to be all of these little things you want to really think through and make sure you have in your lease once you edit your lease or add an addendum to your lease which basically is an additional page

at the very end then you don't need to do this again right so we only have to think through this once for this specific property and then we can use this every time going forward you're going to want to outline things like pets do you allow pets again we have these in our short-term rental reservation house rules as well a lot of the things we have in our house rules as short-term rentals we're going to want to pull those over and have those in our lease

too so what types of pets do you allow how many pets do you allow uh one thing I'd recommend is not allowing any flam bles in the property or glitter things like that that are just total nightmare for housekeeping um I've been kind of studying up a lot on this medium-term space and so I've just pulled some recommendations out of some random places but one that I heard you might want to consider is that you're not responsible for m items less than $10 I know that

sounds kind of weird but if a a tenant remember they're a tenant at this time uh wants to change a light bulb and they need to know if that's their their responsibility or yours if there's not a spare light bulb at the property and so if you have to end up sending a handyman out to change light bulb maybe this property is in an area where you're not that can be really expensive right so maybe you want to outline some of those small little things so

you don't have service calls out there for nothing another thing that we like to do is have what we call an ammo box so we'll leave spare light bulbs we'll leave spare batteries uh but you'll want to outline how much of this you leave in there how much of your supplies are you leaving up front so how much toilet paper are you leaving how much shampoo conditioner all these types of things we want to make sure we have our lease and leases can be a little

complex it can be long so I highly recommend before your guest actually moves in that you have a summary that you send to them right we're going to talk about payments here in one quick second how they can pay where they can pay in deposits which is also going to be included in our sort of summary but you want to really pull the highlights out of the lease knowing that a lot of people aren't reading anymore and if you're sending this in a digital signing service

like Doc you sign or we use sign now that a lot of times your guests aren't reading so come up with a little summary page and have it there so it's highlighting the most important points another thing that you're going to want to have in there is your right to inspect in the property and so when the guest becomes a tenant uh they have tenant rights right you can't just store them into the property and so I recommend putting that in there maybe putting the hours

in there too we have the right with 24hour notice to inspect between 10: and 5:00 p.m. one other thing that you might want to consider having in is just a safety precaution is a mandatory cleaning and so we have this in our lease agreement that says on or around the 15th day of your first month we're going to have our cleaner clean the property uh and there's a charge for that it'll be taken out your deposit or it'll be charged with one of the options that

I'll tell you here in just a sec this gives us the opportunity to make sure that they don't have four dogs in the property when they're only supposed to have one or that there's not some sort of damage happening and that they're really taking care of the place 15 days is a pretty good amount of time to see how someone's treating your property and so this is part of the goal but we can also clean the property at the same time right we're going to be

doing that we're not touching ing their personal belongings for example but we're going to change the sheets and do a lot of this the normal turnover things that we would this is also a good opportunity to share your housekeepers contact with your long-term guests in case they want more cleaning in the future because remember if we're working with housekeepers and they only have a turn with us every 3 months it's not a lot of work for them so this is a way for them to earn

a little bit more money at the same time so you might want to consider that as well okay on to payments so we got a great guest or tenant we ran their background check we sent them a lease using a digital sign service hopefully like docu sign or sign now or I think there's another one called hello sign uh and again we include these links uh in our messages that we send through our property management software platform right the same platform that we use for short-term

rentals we're going to pull these reservations over and put them in there so we can manage them and set up all of our Auto messages the same way we would as if it was a short-term rental so okay so now we want to collect payment before the guest stay there obviously right so there's two ways who might do this if you have your own direct booking site which is already set up on stripe well you can take credit card payments and this is a benefit for

a lot of people so you can have that option but if you're going to accept AC payments which I highly recommend as well I I'd recommend using apartment.com rental manager because you can add your lease there uh you can route those payments to whatever bank account you want it can automatically send out late notices uh you can set it to send reminders to your tenant and they can easily pay through apartment.com rental manager portal you can also include things like late fees and stuff like that

in there so those are really the two options those of us in the short-term rental space a lot of us are using stripe already so we can use that as a credit card option if we're going the a route I suggest department.com rental manager for that one other note here if you're going to use the credit card option well make sure you charge a credit card fee too because they're charging you very likely 3% you don't want to give away 3% of a $5,000 reservation $10,000

reservation $15,000 reservation whatever happens to be uh that's something you can easily charge back to the guest as well so we have a couple ways to easily accept payments regularly without having to remember when they're due the next thing that we really have to keep an eye out for our deposits and so in the long-term rental space it's very common practice to charge first last month's rent for example for a deposit that might deter quite a lot of our short-term guests remember we're kind of in

this little limbo period so if you're going to charge a deposit make sure that it's it's big enough to actually protect you and deter a guest from maybe not taking care of your property the other alternative that we have uh is to use a deposit waiver program and so there's a company called generali for example there's another one called safely there's another one called wo where you can pay to protect your reservation as a landlord as an owner to one of these companies it protects your

reservation you can charge this back to the guest as well so if it costs you $100 well then you can charge the guest a deposit waiver fee uh and then you have protection on the back end and so depending on how much you spend for the protection determines how much protection you have for your property so the more protection you have the higher that that insurance is it's essentially Assurance for your reservation and so this can be a really a good way too that way you're

not juggling the deposit deter determining how much you need to give back or if you need to hold it or whatever it happens to be uh and so that is a good route those are your two options there either charge a deposit which again you can do with apartment.com rental manager or you can do that with stripe if you're taking the credit card option or use a deposit waiver those are kind of the two options there so that's kind of in a nutshell for part two

so the first part of our three-part series was about making sure we set our property up perfectly to attract the guests and the tenants we want the second part is all about making sure that we don't get a bad guest in our property so verifying their reviews running a tenant background check asking for additional information if we need to getting a state specific lease making sure that it really fits our property most of the time it's going to have all of our general house rules added

on there in the form of an addendum and probably some other things like uh information on utilities so on so on uh and then the deposit piece so we have the two pieces it's either going to be through stripe or we're going to take it through a deposit waiver program so this is quite a bit going on here and what we'd like to do is to create a welcome message for our guest that has this summarized where they can pay uh where they can submit a

maintenance claim all of these different types of things now remember we're taking our reservations out of furnish finder or out of apartments.com if we happen to get one over there and also putting those back into our short-term rental management software so uh there's sort of two listing sides right there's the traditional short-term rentals which makes a little bit easier with all the messaging and then there's the non-traditional where we can still get good guests or tenants stay in our property but we're going to have to

manually bring some of that information back in so I hope that helped um there is quite a few things that I actually come up during a long-term guest reservation though so stay tuned in part three we're going to cover all of that uh and we're also going to put together a handy dandy little ebook for you at the end of this we'll save a link in the show notes let you know where you can find that uh free of course to kind of wrap up this

three-part series but stay tuned part three we're going to talk about actually managing our midterm guests until next time I hope you have a fabulous week want to get on the FasTrack to Financial Freedom through short-term rentals well it all starts with the properties you acquire but you want 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 rest methods.com that's reest methods.com