Whether you’re deciding to rent out the family home or you’ve bought an investment property, renting it out properly can make all the difference. After all, knowing your rights and the rights of your tenants can allow the whole process to go smoothly.
The Perfect Tenant
It can be difficult to know where to begin when looking for a tenant to call your property home. How do you know they won’t damage your property or won’t pay on time?
You don’t, but you can protect yourself by not just picking one based on their basic information.
When starting the initial search for a tenant, it pays to know who you are looking for.
Is it a:
You need to be clear in your search when advertising to avoid gaining the attention of those who are not eligible. E.g. you wouldn’t rent a one-bedroom apartment to a family of six.
When you’ve chosen your prospective list of tenants, it’s time to find out more information. Don’t be afraid to do your research. Remember, this is your property and you want someone who is going to look after it.
Information can include:
- Their full name(s)
- Social security number
- Salary or income
- Previous landlords
- References – get more than one to avoid bias
- A signed authorization from prospective tenants to allow you to check their credit report and criminal history
From receiving the ‘all clear’ to do a credit check, you can call upon the services of credit reporting companies. Checking criminal history can be completed by searching for state or local records online. With permission, you may also be able to contact their employer or previous landlords.
Prepare a Secure Lease
Once you’ve found who you believe is the perfect tenant for your property, you can set about arranging a lease that covers all you require from your tenant and all they require from you. The article on The Balance will help you get a better understanding of what is a lease between a landlord and a tenant.
You, as a landlord, are obliged by law to provide a rental property that is not only livable but meets structural, health and safety standards.
This lease could include (but is not limited to):
- Upkeep of lawns and gardens
- Paying the rent on time
- Giving proper notice before ending the rental agreement or lease
- Tenant privacy
- Security deposit
- Your stance on pets – almost 80 percent of rented properties in the United States allow pets, however, many have strict requirements such as size and breed
- The agreed rental amount per month
- Lease term – monthly, annual, fixed
- The date your rent is due and any penalty fee amounts
- Repair requirements
- Behavior expected such as respect for neighbors and noise levels
- Eviction terms and conditions if the tenant does not pay rent or has damaged the property (read more about the national eviction ban here)
You want your lease agreement contract to be as clear as possible because a tenant has the right to sue a landlord in small claims court in the event of a violation of the lease agreement. This type of legal battle can be pretty exhausting and expensive, so some landlords even look for a way to sell their property together with tenants.
But who would want to buy a property with problem tenants in it? This write-up on HouseCashin.com about selling a house with tenants breaks down what difficulties unfortunate landlords have to go through in this kind of situation. Work on your rental lease agreement with a lawyer to make sure you don’t become one of such lessors.
Prior to renting out a house, you also need to make sure that there is nothing that can violate your tenant’s safety. You can provide your tenant a real estate virtual tour so they can have a tour of the place without going on site. Safety conditions are specified in the report provided to your tenants before the start of the rental.
The basic safety requirements vary by state, but most often they include:
- Installing smoke alarms and carbon monoxide detectors on every floor
- Ensuring the radon gas levels around the house are within the norm
- Ensuring all electrical equipment and appliances are installed according to the codes
- Ensuring all gas equipment is properly maintained
- Equipping the property’s doors and windows with reliable locks
Additional measures may make sense if your rental property is in the luxurious segment. In order to attract more potential tenants, as a courtesy to your renters, or upon request, you may invest in security upgrades such as installing a burglar alarm, video surveillance, window guards or reinforced glass, and more.
If you see no point in investing too much in the security, you must at least equip your exterior and garage doors with reliable locks. Decide on the best hardware for the type of your doors using this A-to-Z Guide to Types of Door Locks for Homes published by the safety professionals at the leading locksmith company in Houston TX Skilled Locksmith.
Repairs and Maintenance
One of the most crucial parts of being a landlord is ensuring your property maintenance is kept up-to-date.
Before letting the house to your tenants, make sure it doesn’t need any repairs and is clean. Order a deep cleaning service or do it yourself starting with the dirtiest places in the house.
But after the beginning of the lease or rental period the responsibility for the cleanliness of your property belongs to your tenants. Specify the condition you want your rental house to be in at the end of the lease and during it in your agreement. It’s a normal practice for tenants to order an end of tenancy cleaning service to get their deposit back.
Technical maintenance includes plumbing and electrical problems, roof leaks, fire damage, and water damage. Even smaller problems such as loose shelving and dripping taps may also fall into the hands of a landlord as well.
Alongside being a landlord and repairman, you must also know your legal rights on entering the property when making repairs. You must provide notice to tenants that you will be entering the property, except in emergencies. You must respond to and resolve heating and plumbing issues within 24 hours, and any less immediate problems within two days.
However, bearing in mind your requirements to give ample notice, it’s best to contact your tenant to arrange a suitable time to repair the problem. You should also notify them if tradesmen will be on-site, and when they are likely to arrive and leave if known.
The property must have adequate heating, water, and electricity and it must be sound and clean. It’s best to fix any of these issues before tenants move in.
Repairs and maintenance are not issues to be taken lightly. If you fail to uphold your end of the bargain (which will be in your tenancy agreement), your tenant could choose to withhold rent until the problems are fixed. If you still fail to act, your tenant can then look at fixing the problem themselves and charge it back to you, or deduct the cost from the next rent check.
On the higher end of the scale, your tenant has the right to contact the local authorities if your lack of action violates any health or building codes in your area.
If, after this entire process, you still have not fixed that leaky roof or faulty heating system, your tenant may choose to move out and this could lead to a lawsuit against you.
Hiring a Management Company
If the thought of having so much responsibility on your shoulders seems too much but you still wish to rent out your property, you can look into a management company.
Management companies can not only manage your property, but they can even help you find a tenant, run background checks and advertise the house for rent. They collect rent, charge late fees, organize repairs and sort evictions and early vacancies. All the hard work is now in the hands of someone experienced. Property managers take great care of tenants, but they also protect your investment which in the long run, is the best you can ask for.