Friday, December 02 2011
The ultimate goal of investing in rental property is to turn a profit. To ensure that you achieve that goal it is essential that you follow several critical guidelines.
First, always make sure that you check tenant references. This can be a burdensome step and many landlords overlook it because they feel as though they have good instinct when they meet with the tenant. But not checking references can lead to a number of problems later on. You will uncover a wealth of information about potential problems before you rent to a prospective tenant.
Second, make sure you have everything in writing. This is to protect your rights as a landlord as well as the rights of your tenants. Everything from the code of conduct you expect your tenants to abide by while renting your property to the rental application itself must be in writing.
Third, you will find that you have better success with your rental property if you take the time to ensure that it is both secure and clean. The grounds of the property should be free of litter and trimmed regularly. Not only will the property be more visually appealing but these actions will also assist you with property liability. You will also want to take additional security measures. Extra security may be able to lower your insurance premiums as well as provide an incentive to quality tenants to rent your property when they know it is secure.
If you decide to hire a property manager, take the time to interview prospective candidates very carefully. Property managers can be very helpful if you don't have the time to manage the property yourself. This is especially true if your property is a long distance away from you. The wrong property manager can cause you problems with poor tenant screening and delayed lease up times. This means that you will need to hire a thoroughly responsible and professional individual to handle the job. Always ask for referrals.
Always make sure that you obtain adequate insurance. Not only should you have property insurance but you should also have liability insurance. One incident is all it takes to wipe out your investment. Also check with your state to determine if any additional insurance coverage is required.
Regardless of the condition the property was in when you purchased it, there will come a time when repairs are needed. This is part and parcel of owning rental property. If you take too long to make repairs, not only will your property suffer and repairs will ultimately cost more to take care of but you will also likely lose quality tenants as well. By making sure you handle repairs promptly you will be able to maintain the life of your property as well as retain good tenants.
Always make sure that you follow all applicable regulations in the renting of your investment property. The Fair Housing Administration Act provides precise regulations in order to prevent discrimination. If you violate those regulations you could find yourself facing a lawsuit that is costly in terms of time as well as money. The best course of action is to take the time to do your homework and consult an attorney experienced in real estate matters for guidance regarding the FHA as well as ensuring that you have the proper forms. Good property managers will already be versed in these regulations.
Finally, make sure that you do not violate the privacy of your tenants. Check with your state's regulations to find out whether you must provide any type of notice to your tenant before you enter the dwelling.
Following these guidelines will help you to retain good quality tenants and avoid any potential legal problems. After all, happy tenants make for happy landlords!
Saturday, May 29 2010
If you’re renting out your home, it might not be covered by homeowners insurance, so look into landlord insurance instead.
Maybe you’re moving up to a bigger home and holding on to your former residence as a rental property. Or maybe you’ve tried to sell your home without success. Whatever the reason, if you’re thinking about renting out your home, you need to look into landlord insurance.
Renting out your home raises risks
Homeowners insurance typically covers owner-occupied, single-family residences, says John W. Saunders, president of Slemp Brant Saunders, an independent insurance brokerage in Marion, Va. When your home doesn’t meet that definition because it’s being rented out regularly, it’s no longer covered.
Look into landlord insurance
When you decide to become a landlord, inform your insurer and ask about a specific landlord insurance policy, sometimes known as a dwelling fire policy or special perils policy. Coverage from a basic landlord policy isn’t quite as broad as a homeowners policy, says O’Brien, but it includes big risks like fire, wind, theft, and ice damage.
Other insurance policies to consider
Landlord insurance typically covers the house itself, other structures on the property such as sheds, the owner’s possessions (but not the tenant’s possessions), lost rental income if the house is damaged and uninhabitable, and some liability protection for the owner in case of injury or a lawsuit. Policies vary, however, so read the fine print. If lost rental income isn’t included, you might be able to add the coverage for an additional $50 a year, says Saunders.