Eduard Shapshovich Offers Five Tips for Managing Rental Properties
Many people are interested in investing in real estate, but they are not sure how to start. Becoming a residential property owner or landlord can be a great way of creating income while building a solid foundation for the future.
Being a landlord isn’t always easy. Landlords need to contend with various problems, including property maintenance issues, tenant conflicts, and rising expenses. In this article, real estate entrepreneur Eduard Shapshovich shares his top five tips for people who want to manage rental properties.
1. Getting the Right Tenants
The first thing you need to do to get the right tenants is to write a property listing. Many landlords feel that they can simply put a “For Rent” sign outside and that the perfect tenant will give them a call. This is not a great strategy. You should list your property carefully and market it to the right type of tenants for you.
Many online services can help you list your property. It may also be a good idea to post your property on local Facebook groups or in small local newspapers.
Be sure to leave yourself enough time to find a new tenant by putting up the listing before the current tenant’s lease has run out.
The next step in getting new tenants is showing your property. Be cautious about showing a property with the previous tenants still living there. Many state and local laws apply to this situation, such as the amount of notice that you need to give to your current tenants before showing the property.
The next step is reviewing applications. You should review applications systematically and make sure that your evaluations comply with the rules for fair housing. This is an excellent time to do background and credit checks, contact referrals, and review their rental history.
2. Write Your Lease Cautiously
The lease agreement is a binding legal document that gives both you and the tenant certain rights and responsibilities. The lease should lay out the property’s rules and your expectations for how the property will be treated. It should lay out all of your policies and conflict resolution procedures. While you can find prewritten lease agreements online, it is good to customize them whenever possible. It is also a good idea to have your attorney review your leases before you rent to any tenants.
3. Stay On Top of Maintenance Issues
Too many landlords let their properties become run-down, leading to upset renters and a poorer-quality neighborhood. In your lease, you need to make sure that you communicate to your tenants all of the types of maintenance you are responsible for. You need to set up procedures for your tenants to contact you when they have problems. Above all, you need to make sure that you are responsive to tenant maintenance requests.
Some guidelines say that maintenance may cost as much as one percent of the property’s value per year, but this can vary widely. Some seemingly minor repairs can turn out to be very expensive, as in the case of water leaks that need a roof replacement to repair. If you don’t put the money into proper upkeep, your property will lose value, and your previously loyal tenants will move out.
4. Understand Evictions
No one goes into the residential property business looking forward to evicting a tenant, but the process is an unfortunate fact of life. While this process is difficult for everyone, landlords must follow all state and local rules and regulations governing evictions.
First, you should find out whether your state is considered “landlord-friendly.” This means that a landlord is favored in disputes. Other states are “tenant-friendly,” meaning that it is much harder to evict a resident.
The conditions for eviction should be clearly spelled out in your lease. Tenants can only be evicted if specific criteria or met or if parts of the lease are broken. It could take as short a time as just a few days to evict a tenant, but it is more likely to take a matter of months.
Landlords also need to be familiar with state and local eviction moratoriums that have been put in place due to the coronavirus pandemic.
5. Hire a Property Management Company
If any of these guidelines seem too challenging to follow, or if you run into serious problems while trying to manage your properties, it may be a good idea to look into working with a property management firm. A property management firm will take over all of the daily details of renting a property, from maintenance to tenant problems, and provide you with a check at the end of the month.
The fees charged by quality property management companies can be significant, but if you don’t feel ready for the responsibility to be a landlord, they can be an important lifeline.
Getting Into the Rental Market
Using these five tips, you will be better prepared to get into the rental property market. Everything you do, from shopping for the best property to screening tenants, will play into your chances of success. Above all, it is essential to be honest, and fair with your tenants since an atmosphere of civility will lead to far fewer problems on your end.
Eduard Shapshovich recommends that prospective rental property owners take the time to research all aspects of their properties before they buy thoroughly. It is best to have everything laid out before your first tenants move in. Understanding how to manage a rental property can be complex, but the rewards are many.