Here are several tips you’ll want to utilize when leasing your house to tenants:
1) Keep Good Tax Records
Most landlords aren’t very good at keeping records for their rental home(s). It is critical to keep rental property transactions separate from your personal transactions. This means having a separate bank account for your rental. Deposit all your rental income into that account; and have separate checks and debit/credit cards solely for rental expenses. Do NOT comingle funds. It will make life much easier come tax time!
2) Consider A Property Manager
One of the major complaints with owning rentals is the hassle. It requires responding to tenant calls at all times and you have to deal with acquiring new renters when your home goes vacant. A property manager can alleviate these issues. Just be aware it will generally cost you around 10% of your monthly rent. You must decide whether to maximize your profits, or keep your sanity!
3) Entertain Taking Less Monthly Rent
We know this seems counter to what most landlords want – and that is the maximum monthly rent. But renting your property for slightly less than market value provides more tenant options to choose from upfront; which means you’ll be less likely to have a vacant home for months at a time. The low rent can also be used as a trade-off agreement with your tenants not to hassle you for minor repairs. With less hassle, maybe you won’t need the property manager mentioned above!
4) Be Wise In Selecting Tenants
Conventional wisdom says to locate tenants with great credit, a strong income, and a perfect rental history. While these are important, they are not the most critical. You want tenants who feel lucky to rent your property; not ones who feel entitled. “Entitled” tenants are the ones who make demands and requests before you even decide to accept them as tenants. It’s often better to take tenants with lesser qualifications, if you feel they won’t be a pain in your neck! And of course you want to still assess their ability to pay rent. Don’t forget to look for tenants with good character!
Feel free to contact us if you have questions about leasing your property…we’re here to help!