Before renting your house
Before deciding to rent a property, it is important to research state laws. Did you know that state laws may dictate what you can charge for review fees, application fees, late fees, security deposits, and retention deposits? For example, as of 2011, a landlord can only charge up to $ 42.41 in appraisal / application fees and a landlord cannot demand more than 2 months of rent for a security deposit on an unfurnished property. There are also strict guidelines when it comes to evictions. It is essential to know the rules before starting the process.
Managing a rental property can be a lot of work. If you prefer to be less practical, you can hire a professional management company to take care of responsibilities that you would rather not handle. Typically this can cost up to 10% of the monthly rent charged. Many management companies will announce new tenants, collect rent, handle maintenance repairs, take care of legal notices, and help with evictions. Make sure you know exactly what services will be provided and if they are linked and have error and omission insurance.
If you decide to manage your own rental property, look up current rentals in your area. At what price do you rent? What does this landlord offer? What is the status of the property? It is very important to know your competition. Price your property close to the current rate. An expensive rental can stay for unwanted weeks. The longer you stay, the more money you lose.
Start the advertising process immediately. There are many free ways to advertise. Social media and Craigslist are free and easy to use. Purchase a large rental sign and keep the sign posted on the property with a good contact number at all times. Hold open houses and keep your show hours flexible. If a good potential tenant is ready to view the home and their availability is low, they will move on to the next property.
Carefully screen potential tenants. Have all potential candidates complete a rental application and have their credit report run. You can request an evaluation fee that can be used to complete this process. Remember, you are not allowed to discriminate on the basis of race, sex, or religion. However, you can choose not to rent to anyone with a prior eviction or a history of not making payments on time.
Always request a security deposit. This will protect you once the tenant moves out. If any damage has occurred due to the tenant, this can be used to repair the property. Most landlords also require the first month’s rent. Remember to charge a refundable retention deposit if you are asked to cancel the move-in date when the tenant is not available to move out right away. If the tenant decides during that time period that they no longer want to rent the property, they can keep some or all of the retention deposit for lost rent or other costs. Otherwise, this fee must be refundable or applied to the first month’s rent.
A rental or lease agreement should always be signed to protect both the owner and the tenant. This contract will describe the terms and conditions of the lease that have been agreed upon. It can include whether pets are allowed, who will pay for utilities, what services will be provided, the agreed rent amount, and deposits. Upon execution, the landlord and tenant must complete and sign an inventory or move-in condition checklist. This must be completed within the first 3 days. The property should be traversed and its current condition noted. Disagreements can be avoided at move-in simply by taking this little extra step.
There are some additional items that need to be mentioned at this point. You should check with your insurance company to make sure you have homeowner’s insurance to protect you. You should have a list of contractors to recommend or call for repairs. Your tenant should know exactly when and where to call in case of an emergency. Communication is important to maintaining a great landlord-tenant relationship. Many landlords are happy with their tenants and have few problems.
If you are faced with a situation where eviction is unavoidable, the process can get complicated. Once you have given the tenant the required notice and do not move out of the property, you can begin the eviction process by filing an illegal detainer. In most cases, a judge will hear and decide on the case within 30 days of its presentation. You must use court procedures and cannot begin to carry out the eviction on your own. If the court decides in your favor, it will issue a possession order that will allow the bailiff to remove the tenant from the property. The tenant will have five days from the notification of the writing to withdraw. If the tenant chooses not to leave, the bailiff will physically evict them and lock them out.