Owning rental property is a viable business opportunity because you can make a substantial monthly income, take advantage of various tax deductions, not to mention that real estate appreciates with time. Transforming an apartment or house into a rental property can turn out to be a lucrative investment, even if it doesn’t produce substantial wealth. Landlords have responsibilities and legal obligations they can’t avoid. The landlord’s main responsibilities – keeping tenants in check, managing property maintenance and repairs, and overseeing finances. Being a landlord isn’t easy most of the time. if you thought it’s a glamorous hobby, you’re mistaken.
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Dealing with tenants can be particularly challenging since they have varying needs, but if you want to run a successful business, you’re going to have to make an effort. Good tenant management can enhance cash flow. Taking this seriously is paramount; otherwise, you risk undermining your ROI. In what follows, we’ll present some actionable tips for better tenant management.
Develop a thorough tenant screening process
Successful tenant management starts with the screening process. Reviewing applicants for a criminal history of property damage and other serious crimes shouldn’t be overlooked because they can pose an important threat to your rental business. Take the time to address potential pitfalls; applicant screening is a standard industry practice for good reason. The details provided in the rental application won’t give you a good idea of whether the person qualifies as a good tenant or not. It’s necessary to dig a little deeper.
What you should be looking for in the tenant screening process is errors and deceitfulness, proof of financial responsibility, landlord and employment references, not to mention that you should do a criminal background check. If this feels overwhelming, consider reaching out for help. Some experts can assist you in finding the right tenants and managing various aspects, such as arranging property viewings, rent collection, monthly inspections of the property, and so on. Its’ recommended to seek a full service package for new or existing landlords. You need all the help you can get.
Make the tenancy agreement even better
The tenancy agreement that you issue should be up to date and legally compliant. The document should clearly explain what the tenants and landlord can and can’t do, and, most importantly, what will happen if the terms of the agreement are violated. The tenancy agreement will therefore be written in simple language that everyone can understand. Attention needs to be paid to the fact that lease agreements and rental agreements aren’t one and the same thing. As opposed to the lease agreement, which is maintained for a longer period of time, the rental agreement is no longer than 30 days.
Besides the names of the occupant/occupants, the tenancy agreement should include a description of the real property, the terms of tenancy, the rental price, details about security deposits and fees, repair and maintenance policies, contact info, and, last but not least, the required disclosures. Before giving the tenants the agreement to sign, go through it one more time, and make sure there aren’t any errors. Once it’s signed there’s nothing you can do. The tenants should receive a copy of the agreement with your original signature on it.
Set up online rent payment
Renters want to pay their rent and not fall behind on payments; the only issue is that they have very few options at their disposal. If people don’t realize they have additional options during this time, they won’t take necessary action. Consider setting up online rent payment and provide renters a convenient solution wanting to meet their financial obligations. You’ll increase the odds of on-time rent payments and reduce the number of late fees charged to tenants. Checks, envelopes, and stamps are outdated; not even older renters use them. Online rent collection will make your business more efficient and will ease the burden when it comes down to property management.
There are several tools you can resort to for chasing rent from tenants. If you’re going to establish an online rent payment system, include the expectations and instructions in every tenancy agreement. Let people know which forms of payment are acceptable, where they can pay online, and what the late fees are. It might not be possible to enforce full rent payments. For instance, if someone sends you only a small portion of the rent due and it’s deposited into your account, you can’t evict that person. Let’s not even talk about receiving the rent of the owed rental balance.
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Deal with the perpetual complainers
If you have a tenant who makes absurd complaints all the time, you’ll regret being accessible 24/7. They’ll call at all hours, mostly for nothing. While you have a legal obligation to address repairs that can negatively impact the hospitality and safety of the home, you don’t have to respond to every request, unless it’s something urgent. If a tenant is harassing you, you’ve got the right to evict them. Perhaps you find this solution extreme. In this case, remind the person of the terms of the agreement, which state the responsibilities of each party.
Keep in mind that every person and situation is unique. Listen to what your tenant is trying to tell you and establish whether their complaint is reasonable or not. Maybe they’re not overreacting. It’s a good idea to handle things peacefully because tenants can’t be evicted during the COVID-19 pandemic. If people don’t have anywhere to go, they can reach out to the local authorities and plead their case. Evictions are suspended in many parts of the world to make people feel supported during this tough time. The point is that you can’t threaten anyone with eviction for the time being.
All in all, if you’ve made the decision to become a landlord, make sure to invest sufficient time and money in the business. When you experience overwhelm, that is, when you’re faced with complex challenges, don’t be afraid to reach out for help. Don’t be too keen to demonstrate expertise, competence, and confidence. To advance your rental business, you’ll need assistance from others.