Successfully investing in rental real estate goes beyond purchasing a good property that appreciates in value. The management of your rental property requires quite a bit of time and effort to secure a return on investment for your properties. You want to ensure you stay protected, reduce stress and headaches, create quality housing, and stay prepared for any issues that may arise. You may soon find that you’d prefer to hire a property management company who are experts in these matters. But until that point, here are some tips from the professionals at Utopia Management in San Luis Obispo.
Select Tenants Wisely
If you own a property and decide to rent it out, one thing that’s essential for creating an income is tenants. Spend time selecting the best tenants for your property as it can save you money in the long run. Possible evictions and property damage cost you time and money. Obviously, you want tenants that will pay rent on time, care for your property, and cause no problems. The standard checks to perform are:
- Employment check. Call their employer to verify the dates they have been employed and their stated income. Do not call the number they supplied if it is a cell phone number. Call the company directly. Wily tenants will have a friend pose as their supervisor.
- Background/Criminal check: This can be done online and show any criminal record. You can decide for yourself which charges and which dates would affect your decision. Evictions will also show on these public records checks.
- Rental references: This may seem obvious, but you should verify the dates, rent paid, and any problems on previous rentals. It’s not uncommon for some to not have a rental history, but it makes it harder for you to predict their habits. If they claim they used to own a home and that is why they have no references, ask for proof. If they are a first time renter, you have no option but to rely on other resources to screen.
Review and Follow Laws
This one may be a no brainer, but it’s important you stay up to date on housing laws for your state. The American Apartment Owners Association provides valuable resources on all the recent housing laws you need to know before renting your property. If you’re unsure about anything, it may be helpful to speak to a property lawyer to be fully prepared for any legal issue that could arise. No one likes surprises that could ultimately cost you money.
Create a Comprehensive Lease
Creating a thorough lease that covers all the bases is critical when it comes to protecting yourself and your property. Think pet clauses, how late payments are managed, evictions, inspections, etc. You want to ensure each individual involved in the lease understands their role and responsibilities within the agreement. It’s important to research the legalities for your local area to know what clauses are acceptable and what are not. You may want to have a professional draw up a lease to ensure you’re fully protected if any issues arise with future tenants.
Timely and Efficient Maintenance
It’s normal that things will break or need to be prepared from time to time. What’s important is how and when you choose to manage it. If something needs to be fixed in your property, it’s vital you do it timely and efficiently to protect the relationship with your tenant and not create further issues down the road.
Detailed Digital Records
It’s important to keep detailed digital records of any expenses or maintenance costs related to your property. This will save you a lot of time and headache if you need to search for a receipt for a property expense. It will also keep you organized, prepared, and protected if any legal issues come into play with a tenant.
Solid Communication
This may seem like a simple one, but solid communication with your tenants and all involved is paramount. Be friendly, be open, and be honest. If issues do arise, being on top of them and effectively communicating with your tenants can really make all the difference and make them more understanding of any problems. Afterall, we are all only human.
