Your strategies for managing a rental property can influence your success. You need specific policies and procedures in place if you want it to go smoothly. This involves laying certain groundwork right from the start, as this can save you unnecessary work and difficulties down the road. Here are some strategies that will enable you to manage your property rentals the right way.
Find the sweet spot when setting your rent
When setting rent, you need to take other prices in the area into consideration. You need to look at properties of a similar age, size and condition to yours. You need to determine the highest price you can realistically charge, but that’s still low enough to get attention. If your price is right, you will attract good tenants and keep your vacancy rates low. If it’s too low, you will have difficulty making your business profitable.
Contacting property managers in your local area can help when trying to set your rent. Evernest, RPM, Rock Point and Steven Rentals offer expert assistance in property management in Chattanooga. The team will send you a free report if you want to know how much your property will rent for.
Have a working knowledge of landlord/tenant laws
Managing rental properties means there are various regulations you need to abide by as a landlord. You should know what federal, state and local laws affect you. The law changes frequently, and you need to stay updated if you want to make sure you don’t violate any laws which could subject you to expensive lawsuits.
You have certain responsibilities as a landlord, and your tenants have certain rights. There are laws that apply in particular to screening applicants, handling security deposits and evicting tenants. For example, you cannot decline applicants by using subjective rental criteria.
Create an airtight rental agreement
Your rental agreement should contain all the details such as the rental period, the rent amount, late fees, the property address etc. It should state any house rules and clearly define responsibilities and rights. If you go through the rental agreement with the tenant and make sure all points are clearly understood, you will prevent misunderstandings.
If you are drawing up a rental agreement for the first time, it is best to have an attorney take a look at it. You don’t want to find that you have left out anything important, and you want to make sure that it complies with the law.
Screen tenants properly
You want to avoid getting bad tenants who fail to pay on time, don’t abide by the terms of the agreement or, at worst, do damage to your property. How can you prevent this? The only way is to screen tenants properly. You will need to verify their salaries, do credit checks, check their references and do a background check. Consistency is important when screening tenants. You can then demonstrate that you treat all tenants equally when screening them.
State laws can vary a great deal when it comes to how to handle security deposits. Many states require landlords to keep security deposits in separate accounts. Some specify that landlords must return a deposit with interest at the end of the rental period.
Prioritize rent collection
Your profitability as a landlord will depend on your ability to collect rent on time every month. Once you start granting tenants favors, it can be difficult for them to get on track again. You need to consistently charge late fees to show them you are serious about getting rent in on time. You could possibly even start rewarding tenants who pay rent before the due date with a discount.
Respond to tenant requests promptly
As a landlord, it is your responsibility to fix something that goes wrong on your property, such as a plumbing problem. Many tenants give their reason for leaving a property as having problems getting landlords to fulfill their responsibilities. They may end up living in conditions that are far from perfect and move as soon as they can. You should have an emergency fund for covering any unexpected repairs.
Perform routine maintenance
You will also need funds to do regular maintenance and keep your property in good condition, so it doesn’t lose its value. This will involve doing yard work, cleaning gutters, keeping trees trimmed back and replacing HVAC filters. You need to provide your tenants with proper notice when you intend to do maintenance. In most states, you have to give tenants at least 24 hours’ notice.
There are many strategies you can use to improve the way you manage rental properties, from having a thorough tenant screening process to collecting rent on time. Many owners today choose to use property management companies as it frees them from the day-to-day responsibilities of management so they can focus on investment opportunities and adding new properties to their portfolios.