For the first time rental property investor, managing your rental home can be challenging. However, with the right knowledge, it is possible to make rental home ownership an enjoyable and profitable venture. In this article, we look at some useful tips for rental homes owners that seasoned landlords wish they knew when they got started.
Legal Lease Agreements
Keeping your rental business legal safeguards your interests and those of the tenant. It also ensures good relations between you with each party being clear on their rights and obligations. A lease agreement is a necessary tool for running a professional rental homes business. While it may be tempting to download lease templates, these may not adequately address issues relevant to your property including special rules and regulations. Getting a lawyer to do your lease agreements ensures they are watertight and can protect you from future litigation by disgruntled tenants. Some useful items landlords often forget to add to the lease include:
- Duration of Lease and renewal terms
- Official occupants of the rental
- Security deposit terms
- Maintenance agreements
- Right of entry for inspection
- Property rules and regulations
Tenant Screening
Getting the right tenants for your rental home makes property management easier. Good tenants maintain the house in good condition, pay rent on time and abide by the lease agreement. Your tenant screening process should, therefore, be thorough. Insist on letters of recommendation from previous landlords, personal identity, and employment details. Preparing a questionnaire can be a useful way to assess if a prospective tenant is right for your rental home. However, you must be careful not to discriminate against prospective tenants.
Home Inspections
Carrying out regular inspections on your rental homes helps identify things that need repair before they injure your tenants or damage your property. Inspections also help you assess whether tenants are adhering to the lease agreement terms. If you have a property management company in place, inspections can help you keep tabs on your home’s condition. Finally, inspections help maintain or improve your property’s value through repairs and renovations.
Keep Good Records
If you plan to run a profitable rental business, your record keeping should be impeccable. Keeping track of all your rental income and expenditure helps monitor and maximize your profits. Tenant records are also useful if you ever have conflicts between you. They are particularly necessary for evictions, lease renewals, and rent increments.
Repair & Maintenance
As mentioned, regular repair and maintenance helps keep your rental homes habitable and reduces tenant turnover. It also helps avoid long-term damage to your property. For example, fixing a small plumbing issue can save you thousands of dollars in water damage. Similarly, regularly fumigating the house will help eliminate termites which damage the structure of your home.
Insurance
Protecting your investment against potential risks is a smart business move. Most landlords with homeowners think that it is sufficient. However, this cover only protects the homeowner, not tenants or anyone else occupying the building. Some of the insurance covers you should consider are:
- Mortgage Insurance
- Landlord Insurance
- Fire Insurance
- Flood Insurance
- Personal Umbrella Policy
- Vacant Property Insurance
Property Management
There are very many tasks that go into managing a property successfully. If you have a full-time career or live far from your Utah rental homes, you should consider hiring a property management company in Utah. They should be able to handle tenancy issues, rent collection, inspections and routine repair and maintenance on your behalf.
Consult Professionals
If you are new to the home rental business, it is tempting to DIY all of the functions including leases, repairs, bookkeeping and general management. However, various professionals can help you avoid costly mistakes and even save you money. These include lawyers, accountants, property managers, and contractors. Their fees are also a tax deductible expense, so it is worth consulting their services even if it is until you can handle these tasks yourself.
Fair Housing
Complying with Fair Housing Laws will keep you on the right side of the law and help avoid lawsuits. Familiarizing yourself with State requirements is the safest way to comply. These laws address issues such as discrimination against tenants, providing habitable rental homes, following health and safety rules and security deposit policies.
Customer Service
Treating your tenants like customers means offering high levels of customer service. Besides keeping the rental homes in good condition, tenants require privacy and a channel to air their grievances. They also require adequate notice if any changes that could inconvenience them such as rent increments or house inspections are being carried out.
Rent Rates
Setting the right rental rates will determine whether your business is profitable. Adequate research needs to be conducted to compare market prices of similar properties so you can remain competitive. Your business expenses including mortgage repayment, insurance premiums, property management, advertising, renovations, travel expenses among others will also influence rent prices. You may also consider a few renovations to increase your home’s value, or adding extra charges such as pet fees to increase revenue.
Advertising
Your rental income depends on having tenants occupying the house. Advertising your vacant rental should, therefore, be a priority. You can invest in newspaper ads and other print ads. The internet is currently the most useful tool for landlords seeking tenants and vice versa. You can post your property on social networks or rental websites. You could also engage local realtors and pay them commissions for getting tenants. Another useful avenue for getting tenants is tenant referrals. Offering a commission to good tenants or vacating tenants can help you rent out your house as soon as it is empty.
Whether your rental property is a condo, a single family home, or a multi-unit building, it is clear that a lot of work goes into rental homes management. Keeping organized and seeking help from professionals can help you run a successful business. If you are in Utah, finding a reputable property management in Utah could help save you time and money by running most of these tasks on your behalf.