An often overlooked side of owning investment property, is how to manage the property in the most efficient way. Simply throwing in any tenant and letting the property sit idle could eventually lead to major troubles. Although, some things take time to employ, in the long run they can make your life a lot easier. The following are a few tips to help your investment run a smoothly as possible:
- Screen tenants – Don’t rent to anyone before checking their credit history, references, background and previous landlords. Haphazard screening and tenant selection too often results in problems — a tenant who pays the rent late or not at all, trashes your place, or lets undesirable friends move in can cause you some major headaches.
- Get it in writing – Get all the important terms of the tenancy in writing. Beginning with the rental application and lease or rental agreement, be sure to document important facts of your relationship with your tenants — including when and how you handle tenant complaints and repair problems, notice you must give to enter a tenant’s apartment, and the like. Written leases enhance resale value, allow and help to make the property run more smoothly. Make sure tenants are aware of special clauses such as getting access to the unit for releasing prior to vacancy.
- Handle deposits properly – Establish a system of setting, collecting, holding, and returning security deposits. Inspect and document the condition of the rental unit before the tenant moves in, to avoid disputes over security deposits when the tenant moves out. Documenting the condition and taking pictures of each room and existing damage in the unit ensures legal justification for withholding the security deposit when the tenant vacates.
- Make repairs – Stay on top of maintenance and repair needs and make repairs when requested. If the property is not kept in good repair, you’ll alienate good tenants, and tenants may gain the right to withhold rent, repair the problem and deduct the cost from the rent, sue for injuries caused by defective conditions, and/or move out without needing to give notice.