Building or buying rental apartments is a good investment. If all your rental houses have tenants throughout the year, you'll have a steady monthly income for your financial requirements. However, being a property owner is not as easy as it sounds. Managing your rental property requires the mindset of a business professional. That will help you to know the right amount of rent to charge your clients, what to spend on renovations, and the measures to put in place to attract more tenants to your property.
If you don't have managerial experience, you might make costly mistakes when dealing with the tenants. Therefore, to ensure that you don't lose your time, money, and sleep thinking about the mistakes you made renting out your property, avoid the following mistakes.
1. Avoid Renting Out Your Property without Confirming All Your Tenant's Details
Regardless of how eager you are to find a tenant for your vacant space, don't be in a hurry to rent out your property. Before you allow the tenant to move into your property, ensure that you confirm all their details. Please provide them with a rental application form with different queries about their personality traits. That will help you to know everything about them.
Also, obtain their credit report from the relevant departments to find out about your tenant's credit history. A credit report will supply you with information about their rent payment history and financial transactions. Besides obtaining a credit report, you also need to verify their references. Finally, find out what their employer and former property owner think about your potential tenant. That will help you to know more about the person who wants to occupy your house.
Even if the tenant is willing to pay a few months' rent, or they are even willing to pay more than you're asking for, don't accept their offer before checking out their background first. Such a move might cost you dearly in the future.
2. Avoid Verbal Agreements
Rental agreements act as evidence in the case that there is a disagreement between you and your tenant. For example, your tenant might try to extend their rental contract or ask for more money than the deposit they paid when moving into your house if there you don't have a written rental agreement.
Therefore, if you want to avoid disagreements or even lawsuits in the future, write down everything you discuss with your tenant. In addition, record all your phone conversations whenever you communicate through the phone. If you use text messages or email in your conversation, keep copies of all you discuss for future reference.
That information will help you in the future if you decide to take your tenant to court for breach of contract.
3. Avoid Neglecting Your Tenants and Their Requirements
As a tenant, it's your responsibility to renovate all your rental houses throughout the year. Therefore, you have to check with your tenants regularly to know the condition of their houses. Furthermore, if any tenant calls you complaining about a damaged component or foundational issue, act swiftly by hiring the professionals needed to undertake the necessary repairs. However, before stopping by to check the condition of your houses, notify your tenants in advance. That will prevent accusations of invading their privacy.
Regular renovations will keep tenants interested in your property. Besides, it will ensure that you have a high occupancy percentage throughout the year. Renovations will also increase the longevity of your building and prevent accidents that might hurt your tenants and their property. So, from time to time, hire different professionals to inspect the plumbing system, electrical system, roof, and other components to ensure that they are in top shape throughout the year.
House renovations are expensive because you have to hire different experts for each renovation needed. Besides, you have to use quality materials when renovating your building, requiring you to dig deeper into your pocket. Therefore, to ensure that you have enough money for all renovations needed, ensure that you charge your tenants enough rent. It would help if you also were prepared to get money from your pocket or look for funding should your building require major repairs that rental money cannot finance.
4. Avoid Delaying an Eviction When a Tenant Has Accrued Rent
When you realize that one of your tenants is incapable of paying their accrued rent, don't delay their eviction. Continuing to retain them in your property might cost you much more in the future. So, when one of your tenants has a few months' rent areas, contact a professional eviction lawyer to help you evict the specific tenant with the rental problem.
When dealing with your tenants, avoid the four costly mistakes above if you don't want to lose your hard-earned cash, time, or spend sleepless nights worrying about the decisions you made. If managing your property proves to be challenging, hire a professional property management company to manage the property for you.
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