Around 36% of all properties in the United States are rented, with New York City leading the charge to be the city with the biggest percentage of renters. The rental market is massive and if you’re investing in real estate, it’s a good place to put your money.
Managing a rental property can be a challenging task, although if you do it right, it can be very rewarding to know that you’re putting a roof over someone’s head.
If you’re new to rental property investment, you probably have a lot of questions about how to be a good landlord.
In this article, we’ll take a look at 12 essential tips for managing a rental property.
Manage Your Property Professionally
Even if you consider yourself to be a small-time landlord who only rents to tenants that you know well, you should still conduct yourself in a professional manner.
Your tenants need to know that they need to take you seriously as their landlord. You should always ensure that you follow through with things like late payments, and check regularly that the property is being well-maintained.
You should also not be afraid to start the eviction process if a tenant is not keeping to their side of the arrangement by paying rent on time.
Invest in a Good Quality Screening Process
Every landlord wants good tenants and one of the biggest challenges that you’ll face is finding the best tenants who will always pay their rent on time and keep your property in good condition.
If your property is priced well and is located in a desirable area, then you’ll be likely to find that you get a lot more applicants of people that want to become a tenant.
Use a rigorous screening process on all of your tenants. By screening potential tenants, you’ll be able to weed out those that may be problematic.
Run credit checks, take references from previous landlords, and run a criminal record check and you can be sure that you’re getting the best quality tenant.
Understand and Follow Local Rental Laws
It’s essential that you learn all about the local rental laws for wherever your property is situated. The rules will differ from state to state, however, the American Apartment Owner’s Association has a handy map of all of the different state laws.
Laws may include the length of notice you need to give tenants before a proposed visit, and the length of notice that you need to give a tenant when ending their lease agreement.
Have a Well-Written Lease Agreement
As a landlord, your lease agreement is everything. It’s a contract that covers everything that you can do as a landlord along with what’s expected of your tenants. It also states what happens when the lease is broken.
Having a short document drawn up may suffice in the short term, however, you’ll need something comprehensive for addressing any concerns about what might come up in the longer term.
The lease should cover basic clauses, terms, and expectations of your state’s tenancy laws. This can be drawn up by a real estate lawyer. You should also address items such as:
- Who is responsible for maintaining the lawn along with what specifically needs to be done as part of that
- Where tenants may park and the total number of cars that are allowed to park there
- Whether tenants may paint the walls and whether they should put the walls back to their original color at the end of the tenancy
- Whether pets are permitted and any conditions about keeping pets
- What the purpose of the property is intended for. For example, if the property is solely to be used as a residential property and not for running a business from
- Whether subletting is permitted
The more comprehensive the tenancy agreement is, the easier you’ll find managing the rental property.
Take Advantage of Additional Income Opportunities
There may be an opportunity for you to take advantage of additional income opportunities. These may include renting out additional spaces such as sheds, garages, parking spaces, and taking non-refundable deposits for allowing pets in your property.
All of these things can be taken outside of your regular lease agreement.
Use the Right Property Management Software
In today’s day and age, you simply must allow your tenants to make online rent payments. By collecting rent online, you’ll get the money directly into your bank account without the worry of checks bouncing or getting lost.
Generally, a tenant management program will allow a tenant to make automatic transfers for free or for a small fee.
There are plenty of options when it comes to finding property management programs, most of which will let you manage your rental property online.
In addition to collecting rent, you’ll also be able to advertise your property for rent, take requests for repairs, communicate with your tenant, and collect deposits.
Send Reminders for Routine Inspections and Maintenance
Your lease agreement with your tenants will set out the terms under which you let your property. One of the areas it should cover is your duties to carry out routine inspections and maintenance.
There are several areas of the property that you may need to have inspected, these include heating and air conditioning, and smoke detectors. You’ll also be responsible for maintaining the property to a high standard.
Whenever a routine inspection is due to be carried out, you’ll need to let your tenants know about it. Send reminders giving tenants plenty of warning.
Think About Residents Security
Your tenants should feel secure in their own homes. For this reason, you should ensure that the property has adequate security measures in place. This should be securely locking doors and windows at the very least.
Property security should always be a high priority to you as a landlord. You may wish to consider additional measures such as fitting the property with a burglar alarm or even installing CCTV.
If you own and rent out an apartment block, you may wish to invest in Patrol Points to keep your tenants safe.
Keep Good Tenants With the Right Incentives
Great tenants don’t grow on trees. So, when you find a tenant that’s good, you’ll want to do everything in your power to keep them. One of the ways that you can motivate a tenant to stay, even when there’s a rent increase due, is to incentivize them into staying.
Every year, when it’s time to renew the lease, offer to upgrade or replace one item in the property up to a specified value. This may mean upgrading the bathroom, the kitchen, replacing the AC unit, or upgrading the heating.
By letting your tenant have a say in what they want replacing or upgrading in the property, you’ll be giving them a sense of ownership.
Ask That Your Tenants Have Renter’s Insurance
Although as a landlord and property owner, you’ll be required to have property insurance, you should also recommend that your tenants take out renter’s insurance. This will protect them should any of their property get damaged accidentally.
In addition to protecting their possessions, renter’s insurance also provides liability protection to you. This is especially useful when the tenants own pets.
Hire a Property Manager
When investing in a rental property, there is nothing stopping you from hiring someone to worry about managing the property. A property manager can deal with all of the day-to-day dealings that go with managing a rental property.
Your property manager can screen and approve new tenants, handle any maintenance requests, take rent payments, and much more.
Keep on Top of Maintenance Issues
When something is in need of repair at your property, you have a duty to ensure it’s addressed promptly, particularly if the maintenance issue affects the tenant’s ability to live there.
Maintenance issues that require immediate attention might include anything to do with running water, heating, air conditioning, electricity, or the oven.
Keeping on top of maintenance issues should be your number one priority as a landlord.
Managing a Rental Property
When it comes to managing a rental property, there is a lot of hard work that goes into it. You should always strive to be the best landlord you can be. If you can keep your tenants happy, then they’ll stay in your property for many years to come.
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