Property Management Tips for Landlords
Even for the most experienced landlords, owning a property and having a tenant can often lead to costly mistakes. While being a landlord can be challenging, if you are organized, detail-oriented and far-sighted, you could enjoy a good relationship with responsible tenants. Here are a few tips to keep in mind when renting your property:
Don’t accept a new tenant on a handshake
Insist that all potential tenants complete and return a rental application, which will give you necessary information about them. The form should include requests for employment information, income, and landlord references.
Make sure your lease is in writing
Always protect yourself legally. Have a written lease, signed by both you and the tenant. This is a legal agreement, so be as specific as possible. Consider these questions:
● Do you allow pets? If so, what kind?
● Will you charge a late fee if the rent is not paid on time? If so, how much
and how many days after the deadline?
● What are your expectations for the tenant (snow shoveling, use of the
driveway, a designated storage space)?
● Will you include a noise-restriction component (for instance, the tenant
cannot play loud music after 10 pm)?
● Who will be responsible for fixing what?
● How and how soon do you promise to get back to the tenant regarding
an issue (for example, within 24 hours and by text)?
● How much notice do you require before being able to enter the tenant’s
● How will you expect and accept rental payments (by mail or by an
envelope under your door? Online?)?
Be sure to follow these legal requirements faithfully and without fail. If the tenant sees that you are taking the lease seriously, they should too.
Check with your attorney, as standard leases may vary from state to state.
Screen your potential tenants
This is non-negotiable. You want to know what type of person is living on (and taking care of) your property. Hopefully, it’s someone who is responsible and pays their rent on time. One way to eliminate doubt is to get both a credit check and a criminal history check on the potential tenant you’re considering.
Red flags to look for in a credit check:
● Late payments
● Bankruptcy filings
● A history of eviction
Of course, there is ultimately no way you can tell for sure if a tenant will be responsible, but a credit and criminal check is usually a pretty good indicator.
Charge a fair rent
Check what other rents are being charged on similar properties in your market. Also make sure that the fair-market rent is do-able for your monthly income and finances. Overcharging rent may not get you a good tenant, or even worse, could keep your property vacant.How will your rent price affect your monthly revenue? When calculating the rent, consider your fixed and estimated expenses:
● Mortgage payment
● Property and school taxes
● Homeowners Association (HOA) fees (if applicable).
● Improvements on the property
Require renters’ insurance
As a landlord, you never know when a dispute may occur. By insisting on your tenant buying renters’ insurance, you may avoid court time if any of the tenant’s belongings get ruined or lost. Most renters’ insurance does not cost too much, and renters’ should have better peace of mind by having it on their
side. Check with your attorney regarding how you can require renters’ insurance in your lease — laws vary from state to state.
Keep detailed records
Cover yourself by being able to present a record of every transaction you have with your tenant. This can include:
● Security deposit receipts
● Rent receipts
● Emails and texts
If you were to have to appear in court, the more detailed and organized records you have, the stronger your case.
Don’t spend the tenant’s security deposit
The amount of the deposit usually depends on how you agree to it in the lease, but you also want to be aware of your state’s specific laws on how much you can charge and where to keep it (usually in an escrow account). In most cases, a security deposit is applied to any rent that is still owed if the lease is not completed. It may also be applied to needed repairs and damages (beyond the typical wear and tear).
Understand how eviction works
You may never want it to come to the eviction process, but nonpayment of rent and other issues may force you to proceed. Check with your attorney: remember that there are very specific laws regarding eviction, and they vary from state to state. Overall, you are not able to just toss out a tenant with no warning, and you can’t change their locks overnight. The eviction process is just that: a process, and it takes time. Be sure you are following the letter of the law.
Consider a property management company
If all of these responsibilities and obligations seem too much for you, or if you simply don’t have the time to keep up with them, you may want to consider a property management service. These companies run your property for you; their charge usually depends on the type and size of the property. Often, they take a percentage of the rent, and it could be negotiable.
Think of your rental property as a business; by making sure that all details are covered in the lease and by keeping records of all tenant transactions, you can protect yourself legally and you may save time and money if any issues arise.