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!
Being a landlord can be very overwhelming. Use these 4 tips below to simplify the process!
1)Consider Hiring A Professional Property Manager
Many landlords are intimidated by the thought of managing their rental. The hassle of responding to tenant inquiries at all hours and finding new renters can be too much to deal with for most people. A professional property manager will eliminate these hassles for you. Remember, a property manager will usually cost around 10% of the monthly rent. The ultimate decision lies in whether you want to maximize profits, or keep your mental health!
2)Be Willing To Take Less Rent
Vacancies are a killer! Consider renting your property for a little less so you have more prospective tenants. This lower rent can also be used as a trade-off agreement with your tenant not to nag you when minor issues arise with the property. With less vacancy and fewer hassles, you may not need the property manager mentioned above!
3)Keep Solid Tax Records
Here is one many people overlook. It is critical that you don’t comingle funds. This means keeping your rental property accounting completely separate from your personal finances. Dedicate a separate bank account for your rental property. Deposit all rental income into that account; and pay all rental expenses out of that account (using separate checks and debit/credit cards tied to this account). This will make tax time and any IRS audits much easier to deal with!
4)Carefully Select Tenants
Most landlords have been told they should screen for tenants with superior credit, reliable income, and a perfect rental history. While these are all important factors when choosing a tenant, they are not always the most critical. Be sure to consider other factors, such as entitlement. Tenants who feel lucky that you selected them for your property will be less hassle. On the other hand, those who feel entitled will be very demanding. They may request upgrades as time goes on. They will call you for every issue. It may be better to take tenants with fewer qualifications if you feel they won’t drive you nuts! Look for character when selecting tenants. Don’t just focus on paper statistics.
We hope these tips prove helpful for your rental property. Contact us if you have any further questions, we’re here to help!
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