For new landlords, starting and building a tough relationship with a new tenant and protecting your real estate investment is of supreme significance when making a lease agreement. There are a huge number of considerations at this point in time that are necessary to know. Here are fresh tips for new landowners as a helpful instrument for navigating lease making and the ongoing considerations of managing rental assets.
1. Be acquainted with your tenant by carefully screening each potential renter to avoid problems. This can be accomplished by a few simple steps. First, conduct a credit check to find out an applicant’s credit history and if they have been monetarily responsible in the past. Bad credit can serve as a red flag and you may wish to avoid such tenants. Then, you may want to ask for references from their previous landlords. However, be careful that while references from prior landlords are worth a quick phone call, they are no exactly telling, because these tenants can give fake names and numbers, and even if they don’t, the old landlord may well be painting a good picture of the tenant in order to get rid of them.
2. You should be aware of the law governing and how it can be useful to your rental. When advertising for a new tenant, it is important that property managers and landlords both understand and obey with these laws. What landlords can and should focus on is by evaluating these potential tenants’ financial data and credit history. Among these are the rental applicants’ credit, employment/income (and historical stability), criminal background, and eviction history. When landlords do these checks, not only can they conclude the best applicant, but the landlord can protect against any discrimination lawsuits by producing hard data he utilized to choose one rental applicant over another.
3. Build an airtight lease agreement by being aware of the laws that apply in your state. E.g. every state has different limits on security deposits, late fees, etc. Be sure to be clear on just about everything like who is accountable for paying the utilities, which appliances are included and who is liable for maintaining them, whether the lease auto-renews and for what term, details on fees and deposits, etc.
4. Understand the move-out process. It is important to become familiar with the eviction process and be ready to start the process right away when a tenant violates the lease. While the specific documents required are different in each state, all states involve the same general move-out process. The landlord or property manager must hand out the defaulting tenant with a particular notice, wait a specified period of time, file in court, attend a court hearing, schedule a date for the actual eviction, and so on, and landlords are well advised to understand this process before actually having to go through it, because it is very costly and takes far longer than most landlords foresee.
5. Establish a relationship with at least two good contractors. Landlords and property managers need at the very least a licensed contractor who can handle large jobs, and an reasonably priced handyman who can affordably fix minor issues. Form these relationships before you actually need them, and then you will simply be able to make a phone call or send an email and problem solved immediately.
6. Always be financially equipped. One of the most serious problems small landlords face is be short of cash, be mindful that being a landlord involves unforeseen expenses like suddenly ceasing to pay the tenants rent, unexpected repairs, lawsuits, etc, but the only unsurprising aspect to these unexpected expenses is that they will happen, and with some regularity. Set aside a hefty sum of money exclusively for rental operating cost, and refuse to go along with the enticement to use it for anything else.