As a property management company, you will be handling properties of different clients. This involves a lot of paperwork that is time consuming and labor intensive. At the same time, you also have to ensure the properties you are managing function smoothly and tenants and landlords are happy with your services. One part of property management is taking care of security deposits. Since you are legally bound to return the security deposit, there is no room for mistakes.
Understanding the Laws Related to Security Deposits
The security deposit is meant to cover any damage the tenant may cause during their stay. Some states in the country mandate the landlord does not take more than a month or two of the rent but the amount depends on the state where the rental property is located. It also is important to note that many states in the US make it necessary for a security deposit to be placed in a separate account, and there are some states that require landlords to pay an interest on the amount.
So, as a property manager, you should be aware of the state laws pertaining to security deposits and keep the landlord apprised of them. Also, make sure the landlord knows the amount can be used just to cover unpaid rent and repairs and/or cleaning that occur over and above normal use.
Using Rental Property Software to Keep Track of Security Deposits
It is important you realize states and local communities have their own laws regarding security deposits. Hence, if you have clients spread over different cities, it can be tough to manage these deposits, as the laws change from city to city. A rental property software program can not only help you keep track of the various properties, you also can use it to obtain details of the security deposits and the deadlines for returning it to different tenants.
The property management company and landlord have a legal obligation to return the deposit within a stipulated period of time after the tenant vacates. The software allows you to keep track of this timeline, so that you don’t have to keep referring to your notes and planner. You will be sent, well, it is automatic, an alert a few days before the deadline to remind you when it is time to return the deposit.
You also can use the software to figure out trends when inflow and outflow of tenants increase. Usually, this happens during specific periods, such as when the new school year begins. By keeping an eye on these trends through the software, you will be prepared to manage the security deposits of multiple tenants seamlessly.
A Sagacious Purchase
As a property manager, if you are not using rental property software, you may be struggling with your work, particularly when it comes to processing security deposits. Obtain some outstanding and impressive software today and make your work and life easier.
Turning into a landlord doesn’t mean that you will be rolling in money or piling it up like the characters in Breaking Bad in a hidden storage rental unit and also have the perfect tenant. The real estate market across the country varies and hence, the kind of tenants your property attracts will depend on the location, amenities around the property, and the special features your property has. Being a landlord can be challenging and at times, frustrating. But if you succeed, it is a steady passive income stream.
However, before you decide to take out a mortgage to buy a property and turn into a landlord, there are few things that you should know and take into consideration.
You should have Cash, Lots of It
Banks are no longer doling out mortgage amounts freely because of the Barney Frank and Fannie Mae situation and Dodd/Frank and so on – the happy days are over with. They have tightened their lending procedures and this means it is necessary, you have the 20% down payment ready, should you want to turn into a landlord. And, if you cannot afford the minimum 20% then you are definitely not cut out to be a landlord yet.
It is not just about buying the property. You also have to have money to fix and repair the property to make it attractive for prospective tenants. So, if you want to turn into a landlord, make sure you have plenty of cash available.
It is a Risky Business Endeavor
Becoming a landlord is not just about making money from the rent. You should also have a high appetite for risk. Owning a rental property comes with its own share of risks, such as non-payment of rent, damage to the property, prolonged vacancies, tenant evictions, and lawsuits. If you have the ability to take these risks, you should do just fine. Otherwise, this is the wrong business to get into.
Your Property can get Trashed
The risk of bad things happening is omnipresent in the world of business. However, there is a reason why people who own properties don’t always turn into landlords. You may already have read about the way properties get trashed by tenants before they leave or during the tenancy.
Did you know these stories are often true? You will be surprised at the kind of damage tenants can leave behind. If this happens to you, your passive income stream will dry up until your property is fixed. Depending on the amount of damage, it could be a few weeks or months. You may even rise to new heights of frustration as well!
So before you decide to buy your property, be aware of what awaits you. Educate yourself and ensure you have the stomach for it. If you still want to turn into a landlord, go right ahead. You also can collaborate with a property management company to help you out and handle all aspects of your property. This will reduce your stress and work and allow you to focus on other business and personal endeavors that you may have.
If you are a first-time or even a seasoned landlord, it makes sense to work with a property management company. Remember being a landlord is not easy and you will have to don multiple hats simultaneously on top of the ones you are already wearing. It can make it daunting and overwhelming to find your way as a landlord. Here are some reasons why it makes sense to join forces with a reliable and dependable property management company.
The Sheer Work Involved
While it makes sense to hire a property management company if you have many properties, you can also flip the switch for this collaboration with a single property in your investment portfolio. As a landlord, you will have to vet prospective tenants, maintain the property, perform repairs, handle emergencies, advertise, and market your property when tenants leave and also handle rent collection. This is a lot of work and can make it tough to manage everything.
A property management company has experience in this field and has professionals to handle every aspect of the property. Such a company has a list of contractors to handle maintenance and repairs and also knows how to tackle tenants and their complaints.
Smooth Flow of Income
While a part of the rent should be kept to handle and pay for repairs, you won’t have to chase tenants for the rent each month. This part is handled by property management professional, so you always have smooth flow of income. Furthermore, the professional will know how to ensure 100% occupancy, so that your revenue stream is not disrupted.
They work hard to make owners, you, happy.
Knows Tenant-Landlord Laws
Property management companies know the laws of the state they operate in. And, this makes it easy to handle tenants without getting on the wrong side of these laws. As a layperson, you may not have sufficient knowledge of tenant-landlord laws and this could spell disaster for you if you don’t work within the ambit of the law. And, if you have to go to court, it can turn into a very expensive and long-drawn process. In the meantime, you will be unable to evict the tenant and not earn any income from your property.
Prudent landlords prefer working with property management companies because of the ease it offers. It allows them to focus on their other business interests without getting hassled by the rental property or tenant issues. So, if you want to enjoy the benefits of being a successful landlord, it is time to find a cogent and dependable property management company. Beware, some are better than others!
The winter haze makes property marketing difficult for many property managers. It takes a bit of ingenuity to show off the special features of the property you are managing during the winter season. But this mean does not mean that property marketing cannot be done effectively during the winter months. There are a couple of things you could try doing to generate customer interest during the winter.
Here are a few of them:
1. Showcase your winter wonderland
The winter season is a beautiful time of year. Use it to your advantage. If your property is meant for families to enjoy, make a snowman in the yard, put up a Christmas tree and sleighs. Ask around to know what winter activities are taking place near your property this winter. So when you market your property, use these activities as selling points. It will allow you to set your property apart from the rest without making your clients feel like you are over selling.
2. Keep the outdoor area clean
One of the biggest problems during the winter is the snow. It can be hazardous and a complete nuisance as well. So make sure the ice and snow from the driveways and walkways are cleared. Keep these entry ways clean and dry by using salt, it will make sure the property is safe and appealing as well. This will improve your chances of attracting renters because if the outsides are well maintained the insides should sparkle in proportion.
3. Take some suitable pictures
Make sure you have decent pictures of the property and its various features from the summer. It will show the renters what the property really looks like all year round. It is hard to know what’s hiding under the snow or behind the hazy cover of the winter time fog. Apart from the property you are managing, show your potential clients pictures of the amenities that surround the property, like the park, schools, hospital, or grocery store. They should be able to make quicker decisions once they know what the property looks like.
4. Who doesn’t like the holidays?
Create a warm fuzzy feeling inside and outside the property with holiday decorations. It is an astute way to let your clients know you are current and the property can satisfy their every need. Do not delve deep into religious themes because you are looking at a wide range of customers. So stick with neutral decorations. Stay away from over-the-top decorations and décor. The client should feel like the value of the house keeps appreciating with every detail they see.
With these tips in your marketing tool kit, you should get your property noticed this winter. If you cannot, no one can!
College students are in surplus now that summer is over and winter is beginning. This means new tenants, mainly close to a college campus. But this demography of renters can be a bit of an issue if you aren’t very careful. The benefits may be alluring. Like, most parents cover their children’s housing rent when they go off to college. College students are a lot less fussy compared to the regular kind off customers.
It is a lot easier to advertise to students because they understand the way the Internet works. So advertising and marketing will cost much less. Plus the rent they have to pay is much higher in a university town, for the most part.
So what are the risks, then?
The Risks of Renting to College Students
§College kids usually have everything done for them at home. So being inexperienced in taking care of property can be a disadvantage, especially if your tenant turns out to be reckless.
§Some college students are immature and out of control all together. This is a lethal combination that spells disaster and more expenses for you.
§Most kids plan to party during their college years away from home so. This can result in a much higher risk of damage.
§Since they will be staying for a short duration, they will care even less about maintaining the integrity of your property.
How do You Minimize the Risks?
Tenant Screening Make sure you thoroughly screen your college student tenants. It may be difficult to do this because of their limited credit history. But either way it is necessary. Apart from the students also screen their parents or guardians. Also, find out if the student has ever been evicted from a university dorm.
Special Lease Get our attorney to prepare a special lease when you plan on leasing to college students. There should be a clause requiring co-signers, specifying maximum occupancy, what will happen in the event of damages to the property and complaints against noise.
Explain the Rules Make sure you read the rules to the tenant so that they are made thoroughly aware of what is and is not allowed. Like no use of fire on the property in the form of fireworks, charcoal grilling, or burning candles.
Charge for Utilities To curb the unnecessary use of water and electricity, make sure you charge your clients. This way they will avoid leaving the water on and will learn to save power. And if they do not have pay their electric bill, there goes the TV and the computer!
Monitor the Property Get the services of a third party monitor in the building. This way, you can receive immediate alerts if the tenants do not pay attention to the terms of the contract.
These simple rules will help you recover the money owed to you by your college student tenants and prevent them from damaging our property. Hiring a property management company to help you screen and maintain the property would help ease your burden if you are renting out your property to students.
As a landlord, it is important that you set the rent of your property just right. It should be neither too high nor too low (many times the market will let you know if you are right or wrong in this endeavor). The key is setting rent that attracts tenants and still leaves you with money to pay for property-related expenses and earn you some profit. So, how do you set the rent and ensure it is just right?
The Desirability of Your Property
If you have multiple properties, it is easy to set one rent for similar properties. However, this will cause you more harm than good. You should set rent based on how desirable the property is. For instance, if you have two properties with two bedrooms each and one has additional storage space, it becomes more desirable. Hence, the one with extra storage should have a higher rent compared to the other one, since many people want adequate storage in their homes.
Some people do not though. Some people do not have that much stuff. Some people do not carry a lot of baggage and extra stuff around. They may want a lower rent for this very reason.
You can gauge the desirability of your property by taking into consideration the view from the property, upgrades that you have done, the size of the bedrooms, extra closets, window and/or balcony and floor level.
Rent Fixed by Your Competition
Check similar properties in the neighborhood and find out the rental of these properties. If possible, check out properties that are similar to yours and see what they offer that you don’t. This will give you a fair idea what to include in your property and the rent to charge.
What is the Market Demand?
Fixing the rent is not a one-time affair. You have to keep a close watch on the market to check the supply and demand. If the economy is faring poorly, people will not be able to afford their homes. This will cause the demand for rental properties to go up and in turn the rents will go up. Higher the demand, higher the rent. And, when the demand goes down, you will need to reduce the rent to ensure you don’t have to deal with a vacant rental property (certainly for not too long).
It is prudent to remember the right rent will attract tenants. If you don’t want the hassle to fix the right rent and then ensure you get the right tenants, collaborate with a salient property management company. Such a company has a wealth of knowledge and experience to set the rent based on market dynamics and ensure you still earn a profit at the end of it all. There is no doubt determining the right rent is tricky and it is best left to professionals who know the business inside out.
As a landlord, you want tenants who look after your property, pay rent on time, and stay till the end of their lease (or even renew it). Getting fantastic and affable tenants begins with the screening process and knowing how to do it without getting into trouble is an art that every landlord should learn.
Create a Screening Process
Don’t make your screening process ad hoc. Instead, create a step-by-step screening process. Make sure you have an application that asks them the following questions:
§Reason for leaving this current home or apartment
§Place of work
§Information about their bank accounts
§Personal habits, like smoking
Create criteria for approving a prospective tenant’s application. This will help you select one who fulfills your requirements.
Educate Yourself about Federal Fair Housing Laws
There are federal laws that protect prospective tenants from being rejected for no reason by landlords. It is important you know the laws, so that your screening process conforms to them. Make sure you don’t select or reject prospective tenants based on their gender, sexual orientation, race or religion. In fact, you cannot question tenants about these things at all.
Let Applicants Know the Terms of the Lease
Make sure you let applicants know about the terms of your lease from the very beginning. For instance, if you have a security deposit, let them know the amount. By letting them know the terms, you let prospective tenants also decide whether they want to rent your property. If they don’t want to, they walk away, ensuring you don’t waste time or effort trying to market your property to them. Write down the terms and give a copy to the prospective tenants, so that they can read and understand them.
Perform a Thorough Reference Check
Although time consuming, you will thank yourself later if you check the references the applicants provides. Get permission to call the workplace, existing landlord and other references that the applicant has provided. Be sure to question the prospective tenant’s character.
Refuse in Writing
If you refuse to rent out your property to a prospective tenant, always do so in writing and keep a copy in your file. Make sure you clearly highlight the reason for refusal, so that the applicant knows the exact reason.
Screening tenants and finding a dream tenant can be time consuming. However, if you hire a stellar and reliable property management company, every aspect of the screening process will be taken care of. You don’t even have to worry about legalities, as such, since a company has knowledgeable property managers who know federal laws and make sure it is a win-win process for the landlord and tenant.
As a landlord, you want to have fantastic tenants, who pay rent on time and respect your property. So, if you want reliable tenants, you will have to do some work. Of course, a part of your quest to get the best tenants involves pricing your property fairly, ensuring you maintain the property well and placing ads in multiple places to get your property noticed.
In addition, there are few more things that you should do to secure the tenants you desire.
1. Determine the Kind of Tenants You Want
One of the keys to obtaining the best tenants is first figuring out the kind of tenants you want to work with for a long time. Check with property managers to find out what features tenants are looking for in rental properties in your neighborhood. You can even call up realtors and check with them. Most tenants look for properties that offer easy access to the local school, public transportation, hospital, grocery stores, and so on.
But beyond this, tenants want homes with certain amenities and if your property can offer those amenities, you will be able to attract the right kind of tenants. Some of the amenities tenants look for are air conditioners, dishwasher, neat and safe surroundings, stellar plumbing fixtures, and modern appliances.
2. What is the USP of Your Rental Property?
Why should prospective tenants choose your rental property over others in the neighborhood? This is what will give you the unique selling proposition (USP). Rather than focusing on the number of bedrooms and bathrooms, focus on something that makes your property special and unique.
This could be a short drive from the best shopping area, located close to an award-winning restaurant that has affordable dishes, the best garden to bring the countryside to urban life or watch the most amazing and mesmerizing sunsets. You will want to include the USP in your advertisement to appeal to the right tenants.
3. Sell Your Property for its Benefits and not Features
When creating the advertisement for your rental property, focus on how tenants will benefit from renting your property. Usually, rental property ads are all about features – fresh paint, number of bedrooms and bathrooms, and the appliances. Remember, you don’t want just another tenant. You want the best tenant. So use the ad to demonstrate how the tenant will benefit from renting your property.
Finding the right tenant for your rental property can be tough. That’s why landlords collaborate with property management companies. These companies work on your behalf to get the ideal tenants, so that you can enjoy your life as a landlord. So, go ahead and forge a partnership with a reputable property management company and get the tenants you envisaged and covet. Forging the right relationship will make your life much more enjoyable in the months ahead.