Any tips for a 1st Rental Home owner / Landlord ?
Wednesday, October 22nd, 2008I’ve just purchased my first home rental property and I’m very excited. I was curious if anyone has any tips or pointers that I should know as a new landlord.
1 – Charge prospects a non-refundable credit check charge. You need to screen applicants by conducting a criminal, credit, and employment check. You should also verify employment and you should ask for rental references. The most important question to ask rental references is, “Would you rent to this person again?”
2 – Once you move someone in be firm. Enforce late fees and serve tenants with a Three Day Notice To Pay Rent Or Quit immediately as the eviction process often takes several weeks to a month.
3 – Contact your local court and learn the eviction process. Get all the necessary forms in advance. Know how to evict a tenant and the steps you need to take BEFORE you actually need them. That way if there is a problem, you can act quickly with less stress.
4 – Get the necessary insurance. Call your insurance company and find out what insurance you need to purchase. Do not make the mistake of thinking that your existing home insurance covers a renter, it doesn’t.
5 – Get all the necessary forms like the Rental Application, Lease Agreement, Lead-Based Paint Disclosure, Lead Paint Booklet, Pet Agreement, Property Condition Report, Rental Binder & Deposit Receipt, Residential Lease Extension, Eviction Letter, Notice to Quit, etc. I highly recommend the forms you can get by clicking here.
6 – Be proactive with neighbors as they are a great source to tap that allow you to “spy” on your tenants. Give neighbors your contact information in advance.
7 – Never accept partial rent payments. Tenants will try to avoid a late charge by giving you a partial payment earlier. Send their partial payment back to them with a Notice To Pay Rent Or Quit. Do not accept the rent without the late charge included. If the tenant pays the rent without the late charge, deduct the late charge from the rent they paid then immediately serve the tenant a Notice To Pay Rent Or Quit on the rent. Remember, you can serve a tenant a Notice To Pay Rent Or Quit on rental income only, not on late charges. For example, if a tenant owes you $900 for the rent and on the 7th (2 days late if your Lease Agreement states that rent is late on the 5th of each month) and rather than pay you $931 ($900 rent + $31 late charge ($25 base late fee plus $3 per day)), the tenant only pays their rent of $900, then do this. Deduct $31 in late fees from the $900 which gives you $869 paid towards the rent plus $31 late fees that you right in your receipt book. Now serve the tenant a Notice To Pay Rent Or Quit on the $31 they still owe you for rent. Again, this is important, you can only serve a Notice To Pay Rent Or Quit on rental income and not late charges.
8 – Make sure every adult that lives in your rental has filled out a rental application. Make sure you do a credit check on each rental applicant. Never accept payments from a non-tenant.
9 – Notify utilities of the tenant’s move-in date.
Like many other people I know, I have not been able to sell my home. I now want to try to rent out my house. I am wondering what I should include in my Lease Agreement and is there anything else I should do as a new owner?