I specialize in helping investors find the perfect property for them to supplement their income with rentals. If you’re interested in investing in real estate — and not speculating — then please read on and then contact me at 239-672-2599 or firstname.lastname@example.org.
With real estate prices low, many people are considering buying an investment property and becoming a landlord.
It might sound simple, but there’s a lot to know. The landlord who doesn’t follow such basic guidelines as conducting a thorough background check can get stuck with a nightmare tenant. It takes both business sense and common sense.
The down economy that has resulted in real estate bargains also means it’s more difficult to find a tenant who can afford to pay first and last month’s rent and a security deposit upfront.
Landlords also find they are competing with foreclosed houses, which some people rent below market, forcing rents lower.
Although picking up a cheap condominium unit might be tempting, I advise avoiding them. Instead, buy a duplex, triplex, small apartment building or single-family home where you won’t be subject to a condominium board.
Special assessments levied by condo associations can run into thousands of dollars.
Whatever the property, finding a decent tenant starts with the screening process.
Credit checks and criminal background checks are a must. Small-scale landlords can find help at websites such as http://www.mysmartmove.com. Operated by Trans-Union, a major credit bureau, SmartMove gives independent rental owners access to the same tenant screening used by large property management groups. It also gives renters data privacy because they provide their identifying information directly to TransUnion in a secure, online setting.
For $25 the landlord receives a credit-based leasing recommendation, national criminal report including 50 state sex-offender and terrorist searches, renter fraud warnings and automated renter identity verification.
For an additional $5, the landlord also can get access to a credit report, a credit score and a detailed rental address history.
The $30 is well spent compared with the headaches that come with evicting a bad tenant.
An application should be filled out in full as part of that process.
‘Never be desperate’ for a tenant
Just because you’re offering a place you own for rent doesn’t mean you have to rent to the first person who comes along.
A rental applicant can be denied for such reasons as poor credit, poor personal references, poor job reference, lack of job stability, insufficient funds to move in, criminal background and too many occupants for the size of the dwelling.
If the prospective tenants have been through a foreclosure or short sale, that doesn’t rule them out if their credit is otherwise OK.
Lawyer review of lease form advised
A written lease is essential. Standard leases are available for free at sites such as http://www.mrlandlord.com or can be purchased at office supply stores. If you hire me to find you tenants, we also have a lease already prepared by Pennsylvania lawyers for your use.
Of course, leases cover such basics as the term of the lease, when the rent is due and how much the rent is. But they also should include sections on policies about late rent, security deposits and how many people are allowed to live on the premises and that the premises are for residential purposes only.
The lease needs to state what might seem obvious. Many landlords err by not spelling out everything. If you don’t allow pets, don’t just say, “No pets.” State that no pets of any kind are allowed, including visiting pets. Or one day you will knock on your tenant’s door to find her holding a cat.
Don’t just state that parking is provided. Be specific.
Don’t simply state that the premises must be left clean and undamaged in order for the tenant to receive his damage deposit back after he moves out.