11 Steps To Be A Successful LandlordMoney
You can rent a house. It is not as insurmountable as you may think. It really is an easy process. You just have to be careful.
The key to being a good landlord is to choose your tenants carefully.
How to Rent A House
The house should be in tip-top shape.
Make sure the house you are going to rent is in good shape. If you would not live there without a new paint job, you can say with certainty that it needs to be painted.
The carpets should be cleaned and the place spotless before they move in. Make sure the yard is immaculate and the curb appeal is tangible.
Remember, this is going to be someone’s home.
If you want to rent a house to good tenants, your tenants must regard your property as having value. Then they will treat your property as having value.
Start Searching for the “Right” Tenants
Advertise on the local rental boards. A good place to advertise is Zillow. It is easy to create an account and advertise your property for rent. Your rental amount should not be any higher than the going rate. You can check out the rents in your neighborhood as well as in your city on Zillow. No one is going to look at your property if it is way out of line with the going rate.
This means you can not be much higher or lower than what the market will bear. If you are too high, you will have no inquiries. If you are too low, you will not want to rent that house to those that answer your ad.
Always have an email address in the ad. It is often easier if you do not add your telephone number, However, if you are not in the prime rental time of year, it may be best to add your number.
Put a For Rent sign with a telephone number in the yard.
Make certain the color of the sign is bright. Your telephone number must be large and readable. Pay the $40 and have the sign made. The do it yourself signs are hard to read.
Answer all calls or emails. Ask the renter a little bit about themselves. How many people will be in the house? How long will they be in the area? Do they have a job? Just get a feel for whether they are telling the truth and whether you think they would be easy to work with.
Look for someone who may stay more than just one year even though the lease is only for a year. Just hope they like it enough to sign for another year. If they say they are definitely leaving after a year, they are not out of the running. A renter for one year is better than no renter at all.
Every time someone moves out it costs you money and aggravation.
Be certain to tell your renters that the rent is due on the first of each month and there will be an online account to make it easy for them to pay the rent. Collect the security deposit when the lease is signed.
One lady who applied to rent a home I listed had great references and a job. She signed the lease close to when she was going to move it. She paid half the security deposit when she signed the lease and the other half with her rent the following month. That situation was unusual but we wanted her to rent that house.
However, you MUST get most, if not all, of the security deposit when the lease is signed.
Verbal assurances mean nothing.
Ask if they have ridden by the property. Tell them a little about the neighborhood. Is it child friendly? Is it on the bus line? Is it close to shopping? Can they get to the house easily via a large road or freeway? Is the yard fenced?
Many landlords do not allow pets. From experience, it is easier to rent a house if pets are allowed. You can charge a $200 non-refundable deposit for pets. This does not relieve your tenant of paying for any repairs due to their animals.
Ask how many pets they have. The size and kind of dog are important. You should be hesitant to rent to a person who has a pit bull. I have been associated with pit bulls and they are often very good dogs. The problem is the perception the public has about this breed.
If they are interested and you feel comfortable with them, send out a lease application. Tell them you will be checking references. And you must do just that.
In addition, tell them that after their references are checked they will have to fill out an application on line. They should be informed about this before the application is filled out.
Call their last place of residence.
Make sure the story the landlord tells you is the same as the story you were given by the prospective tenants. Often you will have to send the other landlord the signed application if they require a signature before releasing any information.
Call their current supervisor.
Employers will often not give lots of information but at least you can find out if they are or were working there. You will not be able to get their pay from the company so you have to take the renters word for it unless you request a paycheck stub. Most renters understand this and will comply.
Meet Your Future Renters in Person
Sometimes this is better done before you send them the lease application. You can wait until after you get the credit report. It is easier to tell someone that you have decided not to rent a house to them before you meet them.
It can be done it either way but this depends on how comfortable you feel about them. If you decide to get the credit report back first and they want to see the house, send pictures. Sometimes there will be pictures you can send from Zillow.
However, in some neighborhoods, there is a vast discrepancy in the inside of homes. In these circumstances, the potential renters may prefer to see the home first. This may be in your best interest as you do not want to count on one renter just to find out the home is not what they were looking for. You have to use your best judgment in this case.
Be sure to walk to their car when you meet them. The age of the car does not matter but the inside of it is important. If there is garbage and trash inside the car and on the floorboards, stay away. If they treat their car this way, just think of what they can do to your house.
Time For A Credit Check
We utilize the site called mysmartmove.com. There are many companies available to check credit. Open an account and get started. Send the log in information to the renter. The site will send the information back to you.
The fee for this service is about $40.
The potential renter should directly pay this company for the service. The company will check their credit and let you know how it looks. It is a good idea to reimburse the applicants for half the cost of this service if they “pass the test” and end up renting from you. This amount comes out of the second months’ rent. You can choose to do it differently.
We were going to rent a house to an individual if the report came back with good scores. The report said she owed $85,000 on credit cards and auto loans. With what she said her salary was, there was no way she could make the minimum payments plus the rent. Needless to say, she did not rent our house.
Just because someone has terrible credit does not knock them out immediately.
They may tell you upfront their credit is terrible but that they are working on repairing it. The report may give you a lot of information about this. They may end up being good renters so listen and then decide.
Careful What You Say
There are certain things you can not and should not say to a renter. You can not discriminate and refuse to rent a house to them due to race, sexual orientation, etc. Make sure you never say anything that can be construed to be discriminatory.
A lady who wanted to rent a 3 bedroom house informed us that she and her husband had 2 children. Perfect for a 3 bedroom house. As we talked some more she informed us that her husband had 2 other children from a prior marriage and they would be there on weekends and during the summers.
Whoa! The means a lot of people in that 1100 sq foot house. It means more wear and tear on the refrigerator, doors, etc. We mentioned that was a lot of kids in such a small house. We could not refuse to rent to her. However, I doubt she would have passed our “test” so we were glad she did not call back.
The moral is that you must be careful what you say and how you say it.
Lease That House
If you have done your homework and decide to rent a house to them, give them a lease. Our lease requires them to make repairs to the property for items up to $400. They have to report them to me but the cost is theirs. I will pay for all the problems with the air conditioner and heat as well as the roof. If something did not work when they moved in, it is my responsibility.
We had a house in which a garbage disposal quit working. The cost was less than $400 but we paid for the replacement. That appliance was not in the best of shape when they moved in. The replacement provided goodwill for us. Our tenants knew we were fair and felt that we cared about them and our property.
However, if the potty stops up, they need to call a plumber and take care of the bill. If they get locked out, same thing. For one thing, we are not in the same city as the house and the tenants. We do not want to be bothered and emergencies are not good for anyone. It is not our problem.
If you are good to your tenants, they will be good to you.
Our tenants usually do the footwork for repairs. When we had to replace a stove, I picked the price range at our local Lowes. The tenants were called and informed. The only thing required was that the stove had to be self-cleaning.
Except for that, the choice was theirs. They made the arrangements and sent me the invoice. Since it was close to the first of the month, we agreed to reduce the next month’s rent by that amount. Easy for me and they got what they wanted. We were all happy. Especially as the tenant found a 10% off coupon and used it for the stove.
You need to require your tenants to get tenant’s insurance if they rent a house. In addition, you need to be a named insured on the policy for liability purposes. If a visitor gets hurt and decides to sue, you will have coverage in addition to your personal insurance.
Our leases also say that when they move out, they will have to pay to professionally clean the carpets. In the same vein, the carpets are professionally cleaned when they move in.
Time To Collect Rent
We use the app cozy (cozy.co) for rent collections. It does not cost anything for you, the landlord. If the renter chooses to pay with a credit card or debit card, they can, but they have to pay the associated fee.
Sign up for an account and send the renters an invitation to pay their rents monthly online. Cozy sends out an email to you when the rent is paid. It is an easy system for everyone.
Being a landlord is not difficult. If you want to rent a house, treat your tenants the way you would like to be treated. It will be their home and you want them to take care of it. Every time a tenant moves it costs you time, money, and aggravation. It is better to keep them happy and in your home than it is to get new tenants.
Read more on Guide For Seniors for more tips about real estate.