Renting out a property or even a handful of properties is a great source of extra income for many and can become quite profitable if managed correctly. However, there are many tasks along the way which may seem tedious, overly complex, or boring. In fact, managing a property or a portfolio of properties can be time-consuming and a lot of hard work.
Considering the above, here are some tips to help you rent out your property whilst avoiding extra hassles, paperwork, or disagreements with tenants which can ultimately end up in more work and problems for you, the landlord.
Create an Application and Screening Process for Tenants
To save you from stress and possible disputes with tenants it is wise to create a screening process. A thorough application process will reduce the risk of you having a tenant who pays rent late or damages the property. There are different requirements in different states. In the State of Nevada, for example, the screening process should include a criminal background check, a credit check, and a rental history declaration. Even though the vetting process for new tenants may seem tiresome and long-winded, it is possible to remove this headache by using a professional Las Vegas property management company or another one in your state, as they will be able to streamline the application and ensure you get the right tenants. Always make sure you do your due diligence to ensure you don’t end up with “tenants from hell”.
Make Sure You Get the Correct Property Insurance
There are many risks when renting out your property long term so to avoid having to pay any expected large bills due to damage to the property it is smart to get rental property insurance. Most policies cover damage to the building, health and safety liabilities, and loss of income if the property becomes too damaged to lease out.
Encourage Your Tenant to Get Renter’s Insurance
The insurance for a landlord will not cover the damage or theft of personal items belonging to the tenants, therefore it is a good idea for the landlord to give the tenants a friendly reminder about this as it will provide both parties with peace of mind.
Write a Solid and Detailed Rental Agreement
Renting out a property without a written contract that includes a range of detailed clauses and terms would be unwise and leave the landlord open to many problems.
It is really important to be specific when writing a rental contract and ensure that both parties agree on key points such as the length of the contract, payments dates, and collection, late payment policy, who will pay for damages, the policy on pets, and how much notice is to be given for terminating the rental contract.
A contract that goes into enough detail and covers all areas of possible contention will help to avoid disputes and build trust and respect between the landlord and tenant.
Follow the Rules in the Rental Contract
The landlord needs to set the example by following the rental contract closely as well as encouraging the renter to also do the same. Many disputes are related to access and scheduling of maintenance, these can be steered clear of by the landlord ensuring the terms of the contract are followed by informing the tenants and repair workers of agreed conditions for maintenance.
Setting an example of professionalism and integrity gives the landlord more leverage when enforcing rules applying to the tenant such as those regarding late fees and damages.
Ask Your Tenant to Pay Online
Receiving rent payments on time can be a challenge for landlords often due to people forgetting or being too busy to go to the bank on time. Fortunately, we now live in the digital age so landlords can bypass these common problems by requesting that the tenant pays rent online.
The advantages of using online rental payments are:
- It is more convenient than mailing checks or going to the bank and then delivering or your landlord picking up the cash
- Renters can choose from a range of payment options including scheduling recurring payments.
- Security features protect payments
- The tenant does not have to use checks which are slow to be mailed and can be stolen
- Digital documentation is created for easier tracking
- Both the tenant and landlord can receive payment reminders and notifications to decrease the likeliness of late payment
Keep Digital Records
It can be a real disaster for any business or individual when you lose an important piece of paperwork especially if a legal issue arises and this is no different for a landlord. The loss, misrecording, or omission of records will also lead to the inaccuracy of final reports meaning that the landlord isn’t really sure how much money they made or lost. Using digital records such as recording the condition of the building and tracking rent payments will keep the whole process tidier and easier to manage.
Aim to Have Long Term Tenants
Although long-term rentals can be less profitable than short-term rentals they provide landlords with a stable and predictable income that can last for years with only simple maintenance.
Due to lower tenant turnover, another benefit of long-term residents is the amount of time and money saved on marketing costs, searching for renters, and screening potential renters.
Long-term rentals can also be beneficial due to lower maintenance and repair costs compared to short-term rentals such as those for vacations.
Hire a Property Manager
If you want to remove all the hassle and headaches of renting out a property or a portfolio of properties then the best way is to hire a property manager or company.
Property managers can make life easier for landlords by:
- Being the first point of contact for tenants
- Screening out problem tenants who may pay rent late or damage the property
- Enforcing the payments terms in the contract
- Helping the landlord to avoid legal issues
- Responding to complaints
- Organizing maintenance and repairs
Even though the procedures related to renting out a property may be complex and uninteresting, they are still vitally important in ensuring your rental property is profitable. Luckily there are several hacks to make your life as a landlord easier such as crafting a detailed contract, accepting online payments, keeping digital records, and hiring a property management firm.