Many first-time landlords find themselves shocked upon discovering how much work goes into maintaining the average rental property. Although property ownership is largely considered a passive profession, this doesn’t mean that landlords don’t have to pull their weight. While effective rental property management is liable to seem daunting to fledgling landlords, the following tips can help make the adjustment process considerably less stressful.
Thoroughly Screen All Prospective Tenants
As a landlord, the last thing you want is tenants who are unable to keep up with rent. Not only does unpaid rent stand to create a host of awkward, uncomfortable situations, it can also lose you a fair amount of money. Furthermore, depending on where you’re based, evicting tenants for nonpayment of rent can prove exceedingly difficult, if not outright impossible.
With this in mind, take care to thoroughly screen all prospective tenants. While the screening process may not be 100% foolproof, it will dramatically reduce your odds of allowing problematic tenants to move in. To start with, a credit check should be run on every rental applicant. Although a small to moderate amount of debt is to be expected, applicants who are up to their eyeballs in debt may not make the best tenants. Secondly, with the applicant’s permission, run a criminal background check. While committing a crime needn’t necessarily prohibit an applicant from being able to rent from you, individuals with a criminal history should be considered on a case-by-case basis. For example, if the crime(s) an applicant has been convicted of may potentially pose a danger to you, other tenants or the property, you may want to think twice about allowing them to move in.
You should also confirm that rental applicants are able to comfortably afford your rental rates. In addition to having a consistent source of income, applicants should ideally make at least three times the cost of rent each month. Of course, certain exceptions can be made for applicants with ample savings or reliable cosigners, as well as individuals whose income comes from disability payments or social security. Furthermore, since homeowners insurance can’t be used on rental properties, you should strongly encourage all successful applicants to purchase individual renters policies.
Hire Dedicated Maintenance Personnel
When it comes to smaller properties, you may be able handle most – if not all – of the maintenance issues yourself. However, with larger properties, like apartment buildings and condo complexes, you’ll need to hire dedicated maintenance personnel to ensure that a wide variety of issues can be remedied in a timely manner. The more time you take to address maintenance requests, the more impatient tenants are liable to become – and the more likely they are to speak poorly of you and your business practices online.
Of course, even with a dedicated maintenance staff, you’ll still need to bring in the occasional contractor. When shopping around for the right contractors, make a point of limiting your options to individuals who are fully licensed and bonded. Dependable contractor license management software is liable to prove helpful in this endeavor. While hiring unlicensed contractors may strike you as a shrew money-saving measure, doing so may ultimately lose you a lot more money than you stand to save.
Make Yourself Reachable
Each of your tenants should be provided with your work phone and email. Unsurprisingly, renters who feel as if they have no vehicle through which to contact their respective landlords often have no idea what to do in the event of a maintenance emergency. Additionally, if you keep an office on the property, you can make yourself even more accessible by allowing tenants to schedule sit-downs with you or keeping open office hours.
If you enter your first foray into rental property investment expecting it to be a cakewalk, you’re going to be in for some unpleasant surprises. Although some landlords make the job look easy, there’s a lot more to owning rental property than collecting rent every month. In order for properties to remain livable and attract new tenants, proper upkeep and management are needed – and failing to understand this simple fact can land property owners in a lot of trouble. However, while property management takes some work, it’s far from an uphill battle. First-time landlords looking for ways to effectively manage their properties can benefit from measures discussed above.