"Landlord Tips To Rent a Property & Manage Tenant Rights"
The cold hard truth is that if you plan to rent a property, you'll need to learn how to be a landlord. It certainly is not rocket science, but what's difficult is answering the question: do you want to do this? It's a tough question, no doubt. Maybe a better question is: are you willing to deal with tenants, handle tenant rights, and worry about tenancy in general? The answer better be 'yes.'
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THE NECESSITY OF HANDLING TENANTS
You will need to accept the realities of managing your property's tenancy because you'll be holding the property as part of a
long term investment strategy. During this time, you must abide by all applicable state
laws regarding renters rights,
while at the same time efficiently managing all of your
Repairs will have to be made, common
property maintenance tasks
will have to get done, tenant complaints will have to be addressed, and your
will have to be collected.
And those are just the regular, ongoing issues. From time to time you may also have to deal with crime, vandalism, evictions, abandonment, sabotage, or natural disasters.
You may think that hiring a
rental property manager
is the answer. Well, it's not. It's just too expensive for small
multi family homes.
Yes, some real estate strategies like flipping may avoid tenant management, but that's too risky for my blood. I would guesstimate that at least 80% of us "small time" real estate investors face the reality of becoming a landlord. Sure, you may buck the trend on this, but I wouldn't count on it.
One aspect of managing tenancy involves
a currently occupied rental property. In this scenario, you inherit the previous owner's renters and leases. Importantly, once these inherited leases expire you should renew with your own version of the lease.
The first step to rent a property is to get to know your new tenants. Personally, I like to meet with all of them on a face-to-face basis as soon as possible after
the mortgage closing
(make sure you get all the tenant info from the seller at closing). I call them up and schedule 30-minute meetings with them at their apartments.
At the meeting I provide each tenant with a
that contains, among other things, my name, phone number and address; a reiteration of the monthly rent amount and due date; tenancy rules & policies; renters rights, etc. In general, this meeting serves several purposes:
- It lets them know where to send the rent, which is critical to actually getting paid.
- It allows you to get to know each tenant. Believe it or not, you will have a pretty good idea after the meeting of what you can expect from each tenant, including which ones may cause headaches. Armed with this knowledge, you can manage each as appropriate.
- It allows your policies to be heard. Sure, you could simply mail the welcome letter and take your chances that the tenant will read and comprehend the information, or you could show up and verbally walk them through all the key points and then have them signoff on the document. So you tell me, which method do you think is best to allow the info to "sink in"?
- It gives you an opportunity to directly ask them what they like or don’t like about their apartment, or what repairs are needed.
- It shows them you mean business – critical, because the cold hard truth is that a small percentage of folks will do everything they can to take advantage of the 'new guy.'
Inheriting and subsequently managing tenant rights is a necessary evil and will likely be your first foray into being the landlord. But again, the initial meeting with your new renters is a good opportunity to hopefully deter at least some of their potential bad behavior.
And if not, then the welcome letter can ultimately serve as the first piece of documentation on the path to
GETTING NEW TENANTS
This is absolutely critical to rent a property, as the quality of your renters will most definitely make or break your experience.
For the most part, I attract new renters via "for rent" signs. This works well in my densely populated target area, but if your rental property is located in a more rural area, then you will have to pay for classified advertising to get the word out. I also post "for rent" notices at the local
Once the marketing is out there, the calls will come. If you are unavailable when a prospective tenant calls and he/she leaves a message, call back as soon as you can (same day is best). When speaking with prospective tenants, I first describe the apartment to make sure it meets their needs, and then I communicate the rent amount.
If the prospect is still interested, I'll ask some preliminary questions such as where they work and how much they make, when they are looking to move in, and why they are moving. I also let them know that
pets in apartments are not allowed.
If after all of this there is still mutual interest, I'll set up an appointment to show the apartment.
I try to group showings into 3-4 at a time, because inevitably at least 25-30% will fail to show up. Once there, I have the prospective tenant complete a
and I charge a $25 application fee to help cover the cost of the
tenant verification process.
THE MOVE-IN PROCESS
After you've screened and selected a new tenant, the next phase of how to be a landlord involves moving them in. You will want to meet with your new tenant at the apartment to sign the lease (12-month is preferred). NEVER allow any tenant to move any items into the apartment prior to signing the lease and collecting all monies owed.
When you meet with your new tenant to sign the lease, make sure you:
- Collect the
and first month's rent.
- Review the key provisions of the lease with the tenant.
- Sign the lease along with the tenant.
- Provide contact numbers for the local utilities so that your new tenant can transfer services.
- Give the keys.
- Review tenant rights and responsibilities
- Conduct a pre-move-in
Click for more detail on a standard apartment lease.
TIPS AND BEST PRACTICES
You will also want to make sure that you are managing your income properties in a
real estate LLC
to minimize litigation risk. As such, view yourself as being the managing director of your LLC as opposed to an individual.
Finally, click to peruse some good
related to how to screen tenants, how to manage renters rights, how to rent a property, etc. Follow these tenancy tips as closely as possible. Everything you need to know is right here. Yes, YOU can do this!
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