You and your tenant:
In Part I, we shared do’s and don’ts for investing in a rental property. In today’s blog, we talk about what happens after you sign the dotted line, and the rental game begins.
Do’s
Remember, this is a business relationship. You are ‘selling’ a product/service – a place to live with a commitment to keep it maintained. Just like a retail store or a business service knows what the price they need to be profitable, you know the rent you need to cover expenses, including times of vacancy, and make a reasonable profit. Be competitive in the market, friendly to your tenant, but firm in your expectations. That includes a clear, well-written lease. Check with local laws and experienced landlords on what to include. Some items include:
Setting a fair price for rent, the due date, and late fee policies.
Your responsibilities and tenant responsibilities.
Required days of notification from either of you for ending the arrangement.
What constitutes damage and what charges to expect.
HOA rules if they pertain to your property.
When you will be checking on home conditions and how much notice you will provide before a visit.
How and when to contact you for non-emergency issues, as well as what to do in the case of an emergency.
Establish a cordial relationship with boundaries. For example, if you choose to give your tenants gifts for the winter holiday, that’s appropriate, but keep your gifts neutral and treat all tenants the same.
Enforce the lease. It’s a business contract – one that both parties, including you, must keep. If your tenant is experiencing a hardship, such as a family member with serious medical issues, you can help them if you can afford to, but in a way that doesn’t mess with the lease agreement. If you want to help them, then you can choose to provide a discount in rent for a couple months. This should be given with a specific amount, a specific time period, and should be documented for both parties (email is likely enough). It gives them a break, without impacting the lease itself.
Respect your tenant’s privacy. They are paying you for the right to make your property their home. The best way to retain a good tenant and a steady income is to remember that fact. It’s important to inspect the property from time-to-time, but allow them their privacy and not over step boundaries of their privacy.
Don’ts
Don’t ignore the do’s.
Don’t get involved in your tenant’s lives. For example, while we mentioned holiday gifts, don’t get involved in personal gift-giving, such as birthdays. If you have a business FB page for communicating, that works well for some, but don’t become friends on your personal social media. Keep it friendly, but professional.
Don’t trade tenant services for rent. The lease holds you responsible for specific items. If you don’t want to do them – hire a professional. The contract also holds them for specific payment by a specific date. Dancing around the lease agreement with deals on the side rarely works out in the long run.
Don’t get slack on taking care of your property. Ensure that the roof, plumbing, water heater, furnace, AC, etc. are in good condition. Don’t delay responding when an issue develops.
Don’t spend all the profit. You never know when you’ll face an emergency repair or have a longer-than-expected vacancy. Failing to set aside some of your income for the unexpected can create a preventable financial hardship.
Don’t spend the security deposit – it’s a deposit, not income. If your tenant doesn’t give the required notice, leaves without being paid in full, causes damages beyond normal wear and tear, then you have the security deposit at your disposal.
Don’t refuse to return the deposit without documentation of your reasons.
Following these do’s and don’ts will help ensure a successful venture. As an added assurance, consider contracting with a property management company, such as Rentals America. We treat your home as our own. We offer a wide range of property management services to fit your needs as a landlord or homeowner. We tailor our services to ensure that you have the highest level of service for your home. Contact us today.
