The real estate market is full of opportunity, presenting a countless number of prospects to be highly successful. However, being a successful landlord is not always an easy job. It requires careful planning and thought.
Having a quality tenant screening process or having knowledge of rental history is just the beginning of the long process. In order to stay ahead of the competition, it is important to review every situation and implement best practices for reaching success.
Here are a few basic guidelines and tips for managing your property and tenants to ensure that your career as a landlord is a success.
1) Maintain your property
The quality of the tenant who will rent your property largely depends on the quality of the unit you are providing. Maintaining the look of your property and providing a better-than-average unit will help to attract good-quality tenants.
Try to fix repairs promptly, maintain strict professional policies, and stay organized to keep your rental unit in a pristine condition. When future tenants hear about your rental history and the good condition of your property, it will make your property stand out.
2) Background check
Evicting a high-risk tenant is not only a long process, but also a costly expense. When it comes to rental problems, a bad tenant is much worse than a vacant property, as they increase the risks of late or defaulted payments, lease defaults, property damage, and more. Without knowing the rental history of tenants, or without a proper tenant screening process, it becomes risky to let tenants move in.
Thus, for a successful business, it is critical that you have a thorough tenant screening process in place and investigate the rental history as a vital policy of protecting your investment.
Most of the landlord problems can be eliminated with a consistent and quality tenant screening process and rental history check. Hiring a firm for executing tenant screening process will help you choose the right candidate for your property.
3) Understanding the law
Understanding the state laws and federal laws that cover landlords and tenants is very important to ensure that you follow all the rules and regulations. The Fair Housing Act stipulates that the landlords cannot discriminate based upon family status, national origin, disability, color, family status, sex, race or religion.
However, it is acceptable to base your decision on rental history found during the tenant screening process. But, denying any tenant based on any unlawful reason can constitute as illegal discrimination against qualified tenants at the federal level.
Gaining knowledge into the local laws can go a long way in ensuring that you confer your tenants their equitable rights. Also, always have a consistent tenant screening process for all tenants, to allow you to easily refute any charges that allege that you were discriminatory in any way.
4) Strong lease
A strong lease that spells out all the terms of the agreement will let your tenants know the exact rules and regulations, and protect you down the road. Ensure that all the terms are clear and concise. A lease can include terms such as the date for payment of rent, penalties for late rent, how many people can reside, who is responsible for pest control, and any other terms that you think are necessary.
A strong lease also states clearly what will be the plan of action for eviction and the situations that can lead to an eviction of the tenant. Always remember, that a shorter and a vague lease is more likely to have significant holes.
Also, ensure that your lease or rental application allows you to perform a tenant screening background check or investigate rental history to reveal the risk factors of your prospective tenants.
5) Treat your rental as a business
Once, you rent out your property, treat it like your business and not as your home. Track and record every expense which can help you get significant tax write-offs. For example,. expenses of investigating the rental history of tenants or expenses incurred for the tenant screening process are treated as business expenses and can be considered for tax deductions.
6) Advertise your property
It is important to advertise your properties properly. Create ads and ensure quality marketing efforts that captures the property in terms of benefits to the customer to attract your prospect’s attention. Use various mediums such as social media, online platforms, or advertisements in the local area listing to create awareness about your property.
7) Keep your tenants happy
Finding new tenants for your rental property can be a costly and long affair. High turnover rates can increase your efforts and expense to find a new tenant. It proves to be cost effective to have happy, long-term tenants, so you can save the high costs when they move out. These tips can help you maintain good relationships with your tenants:
- Try to be a little lenient in collecting rent by offering a reasonable grace period.
- Address their important concerns immediately.
- Offer rewards and incentives for early payments.
- Keep the rent a little below typical market rates when the lease is up for renewal.
- Maintain all the common facilities that you have promised.
- Make your tenants feel comfortable and try to avoid conflicts.
Being a successful landlord can be a challenging process, but with consistent policies and in depth knowledge, it can prove to be a rewarding career.