Investing in rental property is a great way to access a steady flow of income and profit from a common societal need for shelter. However, while managing rental property can be lucrative if done correctly, a simple mistake can often cost a landlord a lot of money. Because of this, many property owners choose to hire rental property management companies, which employ experienced rental property managers to provide a variety of property management services. This can include making simple upgrades to improve a building’s efficiency, screening tenants or even helping with taxes. But whether you plan to hire rental property management companies or not, there are a number of things every landlord should know to help cut costs and avoid expensive mistakes. Read on to learn how you can avoid some common and costly property management problems.
Screen Your Tenants
As previously mentioned, rental property management companies can perform this service for you. But even if you are managing your own property, you should not skip this step. Make sure you verify the information they provide on their application, run a background and credit check, and review their references. Many landlords have been deceived by potential tenants who never paid rent, ruined their properties, or caused other problems; the best way to avoid this frustrating and expensive process is to prevent bad tenants from moving into your units in the first place.
If you have a vacancy, you might feel tempted to pull out all the stops to compete with other landlords in your area and begin making a profit as soon as possible. But before you take out ads in your local newspaper or pay for an expensive listing service, consider how modern renters search for information. In most cases, a free online service or a sign in the front yard is enough to attract attention, especially given the low vacancy rates across the United States. Instead, make sure you respond quickly and professionally to the queries you receive and let your property speak for itself.
Once you have a tenant, make sure you spell out every rule, regulation and responsibility that both party has in the lease agreement. Then, review them with the tenant before they move in. From that point on, if there are any problems with rent, bad behavior or otherwise, make sure you document the exchange you have with the tenant. This will help prevent disputes and also help support your case in the event that any appear.
Rental property is a great way to generate income, especially due to the prevalent need for housing across the United States. However, if you make some fairly simple mistakes, you can place yourself at risk of losing money as well. By following the steps above, you will be able to avoid three common predicaments and better handle your investment. More.