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Tenant Placement and Lease Execution

10 min
3/6

Key Takeaways

  • List 2-3 weeks before completion to minimize vacancy.
  • Apply identical screening criteria to every applicant.
  • Use professional screening services ($25-$45/applicant).
  • Conduct documented move-in inspection signed by both parties.

The Rent phase transitions the property from renovation project to income-producing asset. This lesson covers efficient, compliant tenant placement.

1

Marketing the Rental

List 2-3 weeks before completion. Use Zillow, Apartments.com, Facebook Marketplace (all free). Expect 10-30 inquiries in a healthy market. Schedule group showings to demonstrate demand.

2

Tenant Screening Framework

Minimum 620 credit score, 3:1 income ratio, positive rental history, stable employment 2+ years, clean background. Apply identically to every applicant. Use professional screening services ($25-$45/applicant).

Fair Housing Compliance
Federal Fair Housing Act prohibits discrimination based on race, color, national origin, religion, sex, familial status, and disability. Apply identical criteria to every applicant.
3

Lease Agreement and Move-In

Use state-specific lease reviewed by attorney. 12-month initial term. Security deposit per state law. Require renter's insurance ($100K+ liability). Conduct documented move-in inspection signed by both parties.

Key Takeaways

  • ✓List 2-3 weeks before completion to minimize vacancy.
  • ✓Apply identical screening criteria to every applicant.
  • ✓Use professional screening services ($25-$45/applicant).
  • ✓Conduct documented move-in inspection signed by both parties.

Sources

Common Mistakes to Avoid

Rushing to fill vacancy with an unqualified tenant

Consequence: Late payments, property damage, and costly eviction

Correction: Follow strict screening: 3x income, credit 620+, positive rental history, and background check.

Setting rent above market to maximize DSCR

Consequence: Extended vacancy that delays refinance and increases carrying costs

Correction: Price at or slightly below market for fast placement.

Test Your Knowledge

1.What is the primary goal of the Rent phase in BRRRR?

2.What minimum income-to-rent ratio should tenants meet?

3.Why is tenant quality critical for BRRRR?

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