Preparing your first property for rental is overwhelming and thrilling. Being a first-time property owner presents you with a combination of challenges, learning opportunities and victories.
Renting out a property can provide a solid income source. However, to prove successful, you must learn and adapt to avoid pitfalls. Here are our top five property management tips for first-time Riverdale property management owners.
1. Always Do Due Diligence on Documentation
Documentation is a key part of being successful in property management. When new to rental management, having knowledge of and collecting important forms is especially critical. Here are a few of the most vital documents you’ll need to know about:
• Condition reports
• Disclosures (e.g., lead, mold, radon, occupancy limits)
• State-specific leases
• Rental applications
The good news is that most of the paperwork is handled online these days, such as forms for rental application and agreement. However, you must always keep copies on hand or save them electronically in case of a need for them in court.
Aside from these important forms, don’t forget to photo document your property (before and after occupancy).
2. Keep Up With Fair Housing Laws
The most costly mistake a new rental management owner makes is not researching local and federal Fair Housing Laws. Such laws forbid discrimination against protected classes when it comes to housing. Protected classes vary by city and state, but most everyone should know of the federally protected classes.
Never discriminate based on sex or race, for example, but also know that some states have policies protecting emotional assistance animals. You may not be able to charge a pet fee in this scenario.
Though PMI keeps up with Fair Housing laws, we recommend that you also consult with an attorney that retains specialized knowledge of landlord-tenant laws to stay informed. Just because something is written down in a lease doesn’t mean it’s necessarily illegal. Courts can invalidate leases violating the law.
3. Conduct Tenant Screening
One of the most important aspects of renting out your property is to conduct a tenant screening. Separate the bad apples from the good apples by doing background and credit checks on interested parties.
Stellar tenants should have no evictions or criminal records. Does the tenant have good credit and solid employment history? What minimum credit score is acceptable? Ask for rental references and offer questions of your own.
These markers show the likelihood of your property being respected with routine cleanliness and rent paid on time. PMI is happy to conduct tenant screening on your behalf to find the best tenant for your property.
4. Don’t Skip Taxes
Speak with an accountant who specializes in filing taxes for property owners and landlords. Know in advance about what documents you need at the end of the year. You’ll know more about how the additional income will affect both your state and federal taxes. You can also ask your accountant to double check that you are charging a fair amount for rent.
5. Prepare For Seasonal Maintenance
Another task property owners forget is preparing for seasonal maintenance. Every home needs routine outdoor care. It’s easy to let it slip by the wayside until your tenant complains that they can’t see their way to the car in the morning.
Some owners decide to prepare for seasonal maintenance themselves. However, it can take up a lot of time and money to clean the exterior of the home, trim trees, mow the lawn, mulch, rake leaves and shovel snow. Contracting with a third party that you trust helps to eliminate the headache and save you more money.
Property management can afford a high rate of return on your investment. However, it’s not as easy as putting your rental on your market.
Rental management takes dedication, commitment and time, all of which PMI is happy to offer you as you begin your journey as a first-time Riverdale property owner.
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