Property rental management involves all the operational tasks required to manage a rental property. These include advertising the property, screening applicants, conducting a move-in inspection, executing a lease agreement and collecting rent.
Hiring the right property manager can help minimize costs and potential legal issues. For example, an expert property manager might be better equipped to know state regulations for how much can be charged as a security deposit.
Rent Collection
Collecting rent on time is a key part of property rental management. A good landlord will clearly outline their rent collection policies in the lease agreement. This includes due dates, late fees, and other important details that will help prevent tenants from missing payments or getting in trouble.
A good property management company will also offer multiple ways for tenants to pay their rent, including online payment services that are securely encrypted and provide receipts. Some will even allow tenants to set up automatic payments that ensure they always make their payments on time.
Providing a convenient drop-off location where tenants can leave checks and cash is another option. This can be especially helpful for landlords who live on or near their rental properties. However, this method can be inconvenient for long-distance property investors and may expose them to theft risks. It’s also important to make sure that your rent collection process is integrated with a real estate accounting and income-tracking system (such as Landlord Studio) so that you can automate bookkeeping and avoid manual data entry and possible errors.
Tenant Screening
Tenant screening helps landlords find the right tenants for their properties. The process typically includes a tenant credit check, criminal background check and verification of employment. It can also include an interview with the applicant.
A quality tenant can help reduce risk and improve cash flow by consistently paying rent. It is worth the investment in time and money to screen applicants thoroughly.
While it is tempting to focus on negatives, good landlords should consider positive criteria such as consistent income, stable employment and a history of abiding by lease agreements. In addition, you should review eviction records to determine an applicant’s rental stability.
When screening, make sure to avoid asking questions that can be deemed discriminatory under fair housing laws. For example, instead of asking “have you been evicted?” ask, “when were you evicted?”. This will help you distinguish between past evictions and delinquencies. It is also important to keep detailed records of all interactions and communications with prospective tenants.
Maintenance
Property rental management requires a good deal of maintenance and upkeep. Thoughtful planning and scheduling can help minimize costly repairs. This can include capital expenditures such as major lawn improvements, electrical and plumbing upgrades, roofing and drywall repairs, and other large property renovations. These expenses are usually depreciated over several years, reducing the expense recognized in any given year.
Corrective maintenance is less frequent but no less important. Examples include carpeting, door repair and replacement, appliance inspection and repairs, plumbing and electrical repair, and drywall repair.
Tenant retention is another reason to have a well-run rental property. Keeping tenants happy can help justify top-of-the-market rents and reduce property turnover.
Communication with residents and staff is also vital. A clear understanding of policies, procedures and rules can help avoid miscommunication and reduce tenant frustration. Documentation of these details can be kept in an online portal for residents and in a file storage system for staff. Having these documents easily available helps reduce the risk of disputes and lawsuits.
Evictions
Good property managers screen applicants thoroughly, including communications with previous landlords and public records. They do this to avoid renting to tenants who may be bad for the business. They don’t want to waste time and money on someone who might not pay or cause damage.
Landlords can evict tenants for a variety of reasons, but the most common is failure to pay rent. Other reasons include lease violations, criminal activity, or other issues that could endanger the rest of the apartment community.
It’s important to note that the eviction process can be lengthy and expensive. A property management company can help by navigating the eviction process and finding new tenants quickly to prevent lost rental income.