Recent statistics show that 36% of American households are renters.
For investors who are looking to profit from real estate, purchasing a property and placing it "For Rent by Owner" may be a good investment opportunity. Still, while being a landlord could be lucrative, it can also be challenging.
Many regulations surround rental properties. Not only do you have to understand the law, but you also need excellent communication skills. Beyond being a great communicator, you need to rent to the right tenant to ensure timely payments and that the property will be cared for.
Don't let the pitfalls scare you away, though. You can be a superb landlord. Here's how.
Performing a Tenant Background Check
Landlords are anxious about rent payments. It is not worth rushing to vet potential renters to get a check quicker. You must perform due diligence and check the credentials of an applicant.
First, you need a credit check. Knowing if a rental applicant can pay the rent amount is vital. It would help if you verified references, including former landlords and employers. A criminal background check is essential, too.
Even if a tenant is rushing to move in, do not bend to pressure. Take the time to evaluate a tenant background check so that you are not entering into an agreement that will end with a costly mistake.
Pets in a Rental Property
While there are good potential tenants with pets, that does not mean you have to accept pets. If you do, pets can cause damage to the property, from scratches to urine stains. Not all pets will cause harm to the property, but you are taking your chances on "if" they will.
You must be clear about your pet policy. If you allow pets, you should consider a pet security deposit before moving it. For landlords with a no-pet policy, you want to make sure and enforce it should a tenant bring a pet in any way.
Anything in the lease terms needs to be followed through. For instance, if there is a penalty for late rent payments, make sure, as the landlord, that you charge it.
You have likely heard the adage, "Give them an inch; they will take a mile." If you are lax about enforcement, tenants can take advantage of it and follow suit. That standard will be upheld if you enforce the lease terms you set.
While you never want to come to this, some tenants fall into nonpayment situations. As the landlord, if you need to evict a tenant, start the process immediately. Do not give the tenant extra time to make matters worse.
The landlord/tenant relationship is business, and you must treat it this way. If you do not know how to go about the eviction process, do not hesitate to involve a professional property management company.
For Rent By Owner: Tricks of the Trade
There is a lot to consider when renting a property. For Rent by Owner may seem like a profitable investment opportunity, but it will only be lucrative if you avoid these pitfalls. You can make renting a property easier and prevent costly mistakes when you have a property management company like PMI Mile High.
They offer real-time access to your investments with their state-of-the-art technology. PMI Mile High is a full-service real estate asset management firm that is locally owned and operated.
Avoid these common mistakes and call the experts at PMI Mile High right now.