Rental Management – Everything You Need to Know
August 9, 2023
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Rental Management Guide
Being a great landlord involves a variety of factors. It all starts with creating good relationships with the people you work with, from maintenance workers to tenants.
A solid foundation will help you build other useful habits and take the actions that best serve your business.
Your management skills and decisions matter. Everything from charging late fees to ensuring tenants move out smoothly is critical to your success as a landlord.
So, with that being said, let’s dive into how to improve your rental management processes and decision-making.
Great relationships with your tenants are going to inform everything else. And a good relationship starts with an agreement.
Put everything in writing. Written documentation provides a legal framework and solidifies expectations. Relationships work better when people understand each other and commit to things.
People need to know where they stand with each other. Your tenants are more likely to respect you if you communicate clearly with them.
Boundaries are also a key part of any lasting relationship. An example of a good boundary is avoiding discussions on rent and other professional matters while at social events with tenants. Clear boundaries prevent problems from arising.
Staying abreast of issues and maintenance is another way to build great relationships with tenants. People want landlords they can rely on. Don’t be aloof or extremely difficult to reach. Instead, make it a point to check in with tenants regularly (not so often that they get sick of you, but often enough to let them know you care). It’s important to keep your property in good shape for your tenant’s benefit and your own.
Ultimately, how you deal with tenants will determine the health of your business. They are your customers, and a business is only as valuable as its customer service. So, make sure you put in the effort and handle these relationships with care.
Building Better Habits
As a landlord, you’re only as effective as your habits. Let’s look at four habits that can help you improve.
- Understand tax policy. Taxes are incredibly important. Yes, tax legislation is complex and dense, but for your bottom line and stress level, staying up to date with tax rules is a game changer.
- Social media is critical. In this generation of unprecedented connectivity, social media is the infrastructure for connection. If you’re not using it effectively, you’re missing out on a lot of opportunities. It’s a great way to market your property and build relationships in this modern age.
- Create a strong tenant screening process and stick to it. Attracting the right tenants is crucial to your business’ success. Practicing due diligence in the early stages will save you tremendous headaches later. It also will make decisions simpler and easier if you have a reliable process in place from the beginning.
- Stay on top of things. Being proactive about addressing issues with property and tenants is critical to the health of your business. The longer a problem goes unresolved, the worse it gets. You can hurt your bottom line and reputation with a lackadaisical attitude toward issues. Therefore, it’s essential to take care of things promptly and stay organized.
Late fees are an unfortunate but vital part of rental management. Tenants must face consequences if they don’t pay rent on time. It’s a breach of contract if they don’t meet the deadlines they agreed upon in the lease agreement. And you will most likely get taken advantage of if you don’t have a late fee policy that you abide by.
It’s worth mentioning that laws in a couple of states limit the imposition of late fees in terms of the amount you can charge and the length of the grace period. Visit this link to learn more about the specific rules in your area. And consult a lawyer if you need further education or have more questions.
The best way to deal with late fees is by utilizing property management software. Some platforms make it so that a tenant cannot pay future rental invoices until all previous debts (including late fees) are paid. This occurs without any work on your end and puts the responsibility on the tenant without making you chase them around.
If you continue to collect rent and late fees the old-fashioned way, the burden of responsibility will fall on you when it should be with the tenant. Software not only places the burden where it belongs, but it also decreases late payments because of the clear record-keeping, automatic reminders, and automatic late fee application.
Generally speaking, there are six types of utilities: Water, heating and cooling, electricity and gas, trash and recycling, internet and cable, and phone lines. As a landlord, you need to figure out how to manage these when it comes to your property.
The first thing to consider is how you’re going to pay for utilities. Will it be the tenant’s responsibility? Will you pay for them yourself and build it into the rent cost? Or will you use a combination of these methods?
Most landlords think that some utilities, like internet access, are amenities that tenants should figure out. And they consider other utilities, such as water, to be standard and bundle them into rent. Be sure to review the laws in your state to see if there are specific guidelines you have to follow.
You’ll need to outline utility responsibility for every type of utility, no matter the rules or how you choose to pay for it. Be sure to give specific answers on which utilities are provided, the regulations and restrictions governing tenants and providers, and how payments should be made. You also need to be crystal clear about who pays for the utilities.
Ensuring Smooth Transitions Between Tenants
All the tasks associated with moving out tenants and moving in new ones can be a bit overwhelming. You must rearrange or replace the furniture, collect the keys, and assess any damage. Let’s look at a few ways to ensure everything happens in a timely manner.
The sooner you know your tenants’ plans regarding moving out, the better. Each transition is unique in some way, so the earlier you can start to plan, the easier the move will be. Sometimes tenants mix up dates or wait too long to organize trucks for moving their items in. Communicate proactively and coordinate effectively to get ahead of most potential issues.
It’s critical to be specific with move-out instructions. Remind tenants what your expectations are and the timeline for moving out. Everything may seem simple to you, but don’t assume that tenants remember the details. It’s better to communicate too much than too little in this situation.
Another thing to be proactive about is repairs. Figure out what needs to be fixed before tenants move out. You want your new tenants to have a good first impression of your place. You also want to deliver on your lease agreement, or you could be setting yourself up for future problems (i.e., make sure the toilets work).
Giving your new tenants an excellent move-in experience is important to tenant satisfaction. Answer any questions they have and offer any advice that feels relevant.
Lastly, if you rely on help, make sure they’re available on the dates you need them. Planning is crucial to a seamless move-in and move-out process.
More Ways to Improve
Improving your rental management business is an ongoing process. There are always new things to learn and more knowledge that is helpful.
For example, if you have older renters, there are multiple issues to be aware of. Anti-discrimination laws, helping them with technology, and making the property extra accessible are all possible examples. You don’t want to accidentally infringe upon their rights. You also want to make sure they can pay rent on time without too much frustration. And you want your property to be somewhere they feel comfortable and safe.
Another thing to prepare for is long-term guests. Have a policy in place in your lease agreement. Consult with a lawyer to work through the legalities and details. Establish a limit for how long unregistered guests can stay on your property.
If your tenants are typically college age, they’ll likely have friends or significant others over for extended periods. Trying to hold someone accountable who didn’t sign a lease can be a nightmare, so it necessitates a lease that covers these situations. Protecting yourself is prudent and valuable. Every situation is different, so approach each with an open mind, but make sure you have protections in place from the beginning.
Adept rental management is vital to sustaining your business. If you follow this article’s guidelines and continue seeking new knowledge, you’ll have a great foundation.
The key thing to remember is that relationships are the foundation for everything else. The better you communicate with tenants and workers, the more your business will thrive. Nothing guarantees perfection, but these management principles will make you a better landlord.