Before any listing is set up or any potential tenants inquire, we need to set a rent price. Many factors are considered when making this decision:
Current Rental vs. New Rental
If this property is currently a rental, the biggest contribution to this decision will be the current rent or previous rent price.
If this property is a new rental, then we will just need to rely more on the other rent analysis tools to establish the rent price.
Rent Analysis Report
We use a couple tools that provide a suggested rent range based on location, number of beds and baths, and rent price of surrounding properties. Although a rent range is given, this report is not 100% accurate, since not all factors are considered when establishing the suggestion, such as condition of the property and how far away are the best comparable properties. However, we find this to be a very quick and useful tool from an outside source.
Comparable Properties & Experience
Baker Street has had experience with leasing a range of properties, and the same leasing formula does not apply to all properties. For example, student/campus rentals lease very differently than large homes outside of Ann Arbor. For each new property we onboard, we like to find at least one comparable property and consider our past leasing experience with that comparable property. We will consider the challenges (if any) that we faced with leasing the comparable properties to avoid any previous hurdles.
Time of Year
This factor is bigger than one may think. The majority of leases in the area start/end between May-August, meaning there is the largest tenant pool searching for leases to start during that time of year. The slowest time of year is between December-February. This does not mean it is impossible to lease a property during the "off season;" however, it does mean the chances of a longer vacancy for new rentals are higher, and a lower listing rent may be needed to increase the tenant pool.
Vacancy vs. Highest Rent
For new rentals, we ask owners to consider this balance before and during the leasing process. It is our goal to find a tenant as soon as possible (to have the shortest vacancy possible), while also getting the highest rent possible. However, sometimes one of these factors will need to be more important than the other in order to find the best balance, especially if the time of year is not optimal.
When beginning to lease a new rental, we find it helpful to create a rent range with the highest being the best case scenario rent and the lowest being the lowest rent to cover all expenses. Where we start on this scale and how quick we lower the listing rent will depend on amount of vacancy we are willing to risk.
All owners have different situations, so while to some, it may be obvious to have as little vacancy as possible, even with a lower rent, while to others, it may be best to hold out for a certain rent, even with longer vacancy.
There are standard "boxes to check" on all listings, so collecting all of the accurate property details makes for a clearer listing with more probable inquiries. These are the basic property facts we will need:
Which utilities are included with rent, and which utilities does the tenant pay for?
How are utilities paid? Does the tenant coordinate directly through the provider, or will Baker Street coordinate the set-up and payments?
What are the average costs of the utilities? (If information is available)
What type of heat source does the property have?
Is there central AC or window AC units available?
Where do tenants park?
How many parking spaces are there?
Is parking shared with other tenants or neighbors? If so, are there assigned spaces?
Do tenants need a parking pass, or is parking monitored?
Does parking cost anything?
Is there a garage? If so, is there a garage door opener, and how many cars will fit?
Is lawn service included with rent? If not, is there a lawn mower at the property for tenants to use?
Is snow service included with rent?
Are there any other amenities at the property?
Are pets allowed? Cats, small dogs, or large dogs?
If so, we charge a one-time nonrefundable pet fee of $250
Is there laundry located at the property? If so, is it in-unit or on-site, and is it free or coin-operated?
Is there an HOA? If so, do they have any restrictions and bylaws?
Are there any arrangements with the neighbors or other tenants located at the property?
Any other facts regarding the property, such as yard space, alarm system, sprinklers, etc.
Why do we use virtual tours?
Part of the reason why Baker Street was so successful with leasing during the start of COVID-19 is that we already had virtual tours for almost all of our properties. More than ever before, tenants are requesting virtual tours to preview, and some are even comfortable with signing a lease without touring in-person. Even before, virtual tours were very helpful for tenants to preview properties to help determine if a property would be a good fit, which saves time for all parties.
Especially for new rentals and vacant properties, Baker Street will take a virtual tour scan of the property before/immediately after listing it.
What is a virtual tour, and what does it provide?
A virtual tour allows people to "walk-through" a property online. It is a 3-D view of the property, which allows the user to click through each room of a property, and even look up and down. Here is the link to a sample virtual tour.
Baker Street uses Matterport to take and host our virtual tours, which seems to be one of the best in the business. Matterport also creates a floor plan from the virtual tour scan, which we can send to tenants to provide room dimensions and square footage, and Matterport provides wide-lens and good quality photos from the scans, which gives excellent angles of all rooms for the listing.
How does a virtual tour scan work?
The equipment involved to take a virtual tour is: the Matterport camera, a tripod, and a tablet. The camera is placed on top of the tripod and does a 360 degree spin for each scan. The user controls the camera from the tablet, and the user moves the camera throughout the property to collect all of the scans. Each scan takes about one minute, so the total amount of time per virtual tour depends on the size of the property. Additionally, properties with more rooms will require more scans.
It is best if a property is clean and vacant before taking a virtual tour scan, but those circumstances may not always be possible. If Baker Street takes a virtual tour scan of a property under substandard conditions, we will retake the virtual tour again at a later time when the property is in the best condition.
Baker Street uses many online platforms to list properties. Of those online platforms, a couple of them also sync the listing to many other sites too. We list properties directly to:
Buildium (also our management software)
U of M Off-Campus
Buildium and Rentlinx both sync listings to other sites, such as Apartments.com, RentPath, Zumper, etc.
Most people will respond to inquiries through the listing sites online. For these initial inquiries, we respond within 1 business day with basic leasing information, including: the number of beds and baths, rent price, and date available. We also include the virtual tour and floor plan.
For inquiries over the phone, we collect an email address to email the basic leasing information.
We also set up tours either by email or over the phone. Tours are typically conducted on week days between 10:00 am-5:30 pm. Weekend and evening tours are available on a case by case basis.
We typically recommend tenants to schedule an in-person tour in order to learn the most about a property. In-person tours also allow us to learn more about the potential tenants and discuss the property in greater detail.
A tour usually lasts between 10-30 minutes, depending on property size and level of interest. The number of tour attendees also varies. Sometimes all potential tenants will attend the tour, but especially for large campus houses, it is common for only 2-3 group members to attend a tour on behalf of a group.
Current tenants of a property may or may not be home during the tour. Some prefer to be gone during that time, although it is more common during COVID-19 for at least some of the current tenants to be home. Some current tenants are more vocal and involved in the showing than others. Current tenants can be helpful on tours for answering questions (such as utility costs) or providing nice feedback (for things such as maintenance).
If not already discussed previously, the Baker Street representative at the tour will educate the potential tenant about the property and the leasing process. We will also gain relevant knowledge about the potential tenant, such as: preferred move-in date, how many tenants, line of work, any pets, etc.
The entire application process is done online. Baker Street uses two application forms. We have an initial application form, which can be viewed here, to collect all personal information, such as: contact information, employment history, income, and rental history. Every tenant who signs a lease will need to fill out this form. We also have a background/credit check form, which generates a TransUnion SmartMove report once submitted.
For undergrad college students, we often only require the initial application with a cosigner, who is often a parent. The reason behind this is often college students have little to no credit, employment history, income outside of scholarships, and even background reports, so the background/credit check is not very useful. Instead, it is more useful to have a cosigner, who has employment history, income, and often contributes to paying the rent, and will carry out the responsibilities of the lease if all tenants fail to do so.
Potential tenants will receive applications via email once requested. Sometimes people request applications before touring, and sometimes people wait until after the tour to proceed with the application process.
Once the initial application form is filled out, Baker Street will determine if the applicants will also need to fill out a background/credit check form and email if needed.
If the background/credit check from was completed, Baker Street will review and make a decision to either "approve," "decline," or require more information. TransUnion SmartMove does make a suggestion based on the report, but Baker Street will always double check to ensure we agree with the suggestion. Some factors which could lead to a "decline" would include: a low credit score, high amount of debt, previous collections, previous evictions, or a criminal record.
Owners are able to access application forms and reports through the online dashboard. Some owners like to be more involved in the decision making process than others.
Baker Street does not necessarily have set requirements for applicants, but we analyze each applicant on a case by case basis. For example, one tenant may not have an excellent credit score, but he/she has a high income and steady employment.
Baker Street also has a first come, first serve policy in terms of leasing for most properties. We feel this is the fairest way to handle leasing. However, this may not always be the case. For example, if two potential tenants inquire around the same time, but the second person will move into the property, which happens to be vacant, sooner, then it would be in the owner's best interest to pursue that potential tenant instead, as long as the decision was made early on in the process.
Baker Street uses the same lease template for all properties. The lease template is reviewed and edited every year to ensure we have the best possible lease. Our lease is written to be the most comprehensive for all parties to view with the most important and specific details on the Summary Page at the beginning of the lease. The Summary Page provides details, such as: lease term, rent, utilities, security deposit, etc. The rest of the lease contains more general information in the Renter Rules & Regulations and the Lease Terms & Conditions sections, which makes up the largest portion of the lease. The end of the lease contains the Fines & Violations section, which lists specific costs of lease violations. The current lease template can be viewed here.
Lease Signing Process
After all applications are collected and approved, Baker Street will generate the lease through Buildium. All of the back-end set up is completed and the Summary Page details are entered on the lease before the lease is emailed to each tenant and cosigner to sign individually through a personal email link. The signatures are collected via Adobe Signature Cloud. Once all signatures are collected, Baker Street will countersign the lease.
The tenants are updated throughout this process with clear instructions, and Baker Street will follow up as needed to gather all signatures. Some leases take longer to sign than others; the length of time depends on the tenants and property. For example, two tenants signing a lease for a vacant property to move into ASAP may go through both the application and lease signing process in 48 hours, where as a group of six college students signing a lease with cosigners for a house with a move-in date far in advance may take two months.
Once the lease has been signed by all parties, the lease will be executed on Buildium and a lease ledger will be created. Each tenant will instantly be emailed a link to create a log in for the online dashboard. From the online dashboard, each tenant will use his/her log in to access the lease ledger, submit maintenance requests, and access documents, such as the signed lease. While each person has his/her own log in, there is only one online account per lease. This means each tenant can see when other tenants make payments. Baker Street does not necessarily track how much each tenant has paid, but we only track that the total amount of rent is paid.
Baker Street collects the first month's rent after the lease is signed, and the tenants are given a two-week deadline to pay that balance, unless the move-in date is closer than two weeks away. In that scenario, the first month's rent and security deposit would be paid prior to move-in. The security deposit, which is either 1 or 1.5 month's rent (depending on city), is due one month prior to move-in and will post to the lease ledger at that time. Baker Street will also charge tenants a lease processing fee or application fee for the majority of leases to cover administrative costs, which will be collected with the first month's rent payment.
The leasing fee for owners is charged in the owner payout closest to move-in. For example, if a lease is signed in January for a move-in date of August, the leasing fee will not be deducted from the owner payout until either August or September.