If you’re thinking of renting there is much to consider. To make sure you seal the right property for you, here are some tips and pointers about what questions to ask.
Being a landlord can be challenging, from finding and screening tenants, creating rental agreements and and collecting rent, here are some tips to help owners along.
KNOW WHAT YOU ARE LOOKING FOR
Rental properties come in all shape and sizes. Try to narrow down your search by knowing:
– Where you want to live.
– Furnished or unfurnished?
– What is your budget?
– When do you want to move – landlords will expect you to move in within a month of the property being available
– How long do you want to rent for?
WHAT IS AFFORDABLE
Usually rents are exclusive of other bills so make sure you have sufficient income.
Bear in mind that:
For instance, you should budget for at least N2000 per month for electricity.
Your annual income should be at least 2.5 times your annual rent.
ARRANGE FOR A VIEWING
It’s never advisable to acquire a property without viewing it to ensure it is the right place for you. When arranging a viewing:
– Book in advance – if the property has other tenants, you should provide at least 24 hours’ notice.
– Saturday viewings are popular, so plan ahead if viewing at the weekend.
– Ask questions about the house and area, especially if other tenants are available to answer.
– Run the shower! Check the lights! Test the door locks! Check the windows!
FIND OUT WHAT IS INCLUDED IN THE HOUSE
Furnished properties come with kitchen appliances and ‘big ticket’ items like sofas, beds and wardrobes. Some unfurnished properties may also come with kitchen appliances.
To be sure what is and isn’t provided:
– Ask to see the current inventory – this lists what is provided
– Check before you apply whether specific items are included
HOW MUCH WILL IT COST TO MOVE IN?
What are the agency fees, service charges, security/damages, etc? Initial monies vary from agent to agent, so also will expectations differ in terms of advanced rent deposits and minimum rent period.
Also, make sure you know:
– How much rent in advance will be due?
– How much deposit is payable and how will it be protected?
COLLATE THE NECESSARY INFORMATION TO EXPEDITE YOUR APPLICATION
Take a look at the agents’ application form to understand what you need to provide with your application.
This usually includes:
– Photo I.D.
– Proof of existing address
– Evidence about your income (find out who can provide a work reference for you)
– In certain circumstances a Guarantor is required to guarantee the rent
FIND OUT WHO IS MANAGING THE PROPERTY
It is important to be sure that you are dealing with the official custodians of the property, so as to be sure you are fulfilling the actual requirements of the property, not another agent’s contrived expectations.
MAKE SURE THE PROPERTY IS SUITABLE FOR YOU
Some landlords have requirements or restrictions about who they consider suitable for a property. If you have any of the following, check before arranging a viewing:
– Home-based Businesses
– Adult children or family members living with you
– Criminal Records
BE A GOOD TENANT
If you’re looking to extend your lease, be a good tenant in order to negotiate a smaller increase in rent.
Landlords appreciate tenants who do not trash their place, cause a nuisance to neighbors or damage their appliances. Some landlords in other countries have even asked for references from tenants, though this practice is not prevalent here in Nigeria.
Landlords also like tenants who pay on time and do not bother them over the smallest matters.
A landlord did not raise their tenant’s rent precisely because they looked after the place well. The tenant also did not complain when some work had to be done in the unit to fix a persistent leaking issue.
However, don’t be too upset if they choose to raise your rent during this time, as the high cost of living has landlords aching to get by on their once profitable renting business. It’ll likely still be costlier for you to look for a new place in the market.
Managing your rental property may not be your primary job, but it is still a business and a source of extra income. It’s important to remain professional with your tenants, keep your finances intact, and perform a thorough tenant screening prior to renter move in.
In order to conduct good business, you need to comply with federal, state, and local laws. It’s important to make sure your business follows all necessary laws in order to maintain a positive reputation and avoid potential legal problems. Real estate and rental investments often come with regulations, so be sure to take the time to conduct research and understand all federal and state specific laws before plunging in.
It’s also important to protect yourself from potential accidents or liability claims: one way to do so is by purchasing property insurance. If an unfortunate situation arises, like a pipe bursts or theft occurs, property insurance can protect you from bearing the loss. This means you won’t have to pay thousands of naira if a tenant should sue you.
Conducting good business also means preventing problems before they happen. The best way to avoid problems is to keep your unit and building in good condition.
Before renting to tenants, double check that your rental property is a safe place to live. It’s worthwhile to spend money to make sure everything is up-to-code and all utilities work.
Once you have tenants living in your unit, you should have a plan as to how you will fix dangerous problems immediately. For example, how will you fix a sewage pipe if it breaks, or help a tenant who locks them self out? The best way to prepare for problems like these is to have a plumber, locksmith, and contractor on call.
Being professional, keeping your finances in mind, following your city and state’s laws, protecting yourself from liability, and preventing tenant problems are the best ways to manage a good rental property business.
FIND TENANTS ONLINE
A large number of tenants nowadays search online for their next apartment, which means the most effective way to find tenants is to create an online rental listing. Promote your listing through real estate agent platforms such as KingsCourt Realtors who can expose the right audiences to your property.
The key to finding tenants is to provide tenants with the information they want to know about your rental property. For instance, they’ll want to know the rent price, the address, number of bedrooms and bathrooms, amenities, and nearby attractions—the more informative the listing, the better. It’s also a good idea to provide clear photos of every room and common space, as tenants will likely be more interested if they can easily visualize the space.
An appealing rental listing that highlights your best features and announces your requirements is the best way to attract quality tenants who will pay rent on time and take care of your property.
CONSIDER HIRING A PROPERTY MANAGER
Hiring a property manager can be a worthwhile investment if you’re looking to save on the time and hassle involved in owning a rental property, such as marketing your property, collecting rent payments, and dealing with tenant issues. A good property manager can also help manage multiple rental properties if you find yourself overwhelmed with landlord responsibilities.
If you don’t live near your property or don’t want to fully commit to the hands-on role of managing the rental, then hiring a property manager is a great avenue to explore. By putting the responsibility of owning a rental home on a third party, you’ll have peace-of-mind that your property is being maintained in a professional and timely matter.
Keep in mind, you’re legally responsible for maintaining a habitable space for your residents, so if you don’t have the time or resources to dedicate to this important task, it may be time to consider hiring help. Whether your property’s roof is in need of some care, or the walls need to be repainted, a property manager may have to take on a great deal of responsibility, or hire the right person to do so.
If you can afford the expense, a property manager can help to streamline your landlord duties and facilitate a more hassle-free rental process. Similar to the procedure for finding the right tenant, make sure that you properly screen potential property managers. . Don’t forget to ask for local references and interview multiple people before settling on any final candidates.
SET THE RIGHT RENT PRICE
To set the right rent price, we recommend researching your market to learn what the fair market rent price is in your area. Pricing your rental at the rent price that makes sense in your location can mean the difference between vacancies and attracting good tenants so you can rent your property quickly.
As you set your rent price, you should keep in mind how it affects your financials. After all, rent payments are your main source of income on your rental property. To compare your rental income to your rental expenses, you should list your fixed and estimated expenses. Fixed expenses include mortgage payments, property taxes, insurance fees, etc. Your variable expenses are utilities, repairs, and property improvements. By comparing income to expenses, it’s easier to see how rent price affects your monthly revenue.
There’s no point in setting the right rent price if you have tenants who don’t pay on time, which is why the next tip is critical.
CREATE AND FOLLOW A TENANT SCREENING PROCESS
The main goal of tenant screening is to help find quality tenants who will pay rent on time and take care of your property as if it were their own. To select responsible tenants, it’s important to filter out good potential tenants from the numerous applications you might receive.
You should look for a tenant who can pay in full each month, doesn’t have a criminal history, and has a good rental background.
REQUIRE PROSPECTIVE TENANTS FILL OUT A RENTAL FORM
A good rental application form will give you quick information about your prospective tenant: name, current address, reason for their move, employer information, income, and landlord references. It’s important to ask the right type of questions so you have all of the information you need to make a smart decision about who will live in your property.
HAVE A WRITTEN RENTAL AGREEMENT
Having a written rental agreement is the best way to communicate your expectations and protect yourself in legal situations. While oral agreement are legal in some cases, they’re less effective than a written document signed by both parties. Without a written document, it may be difficult to prove what was agreed upon prior to tenant move-in.
All of your rules and clauses must adhere to state specific laws. The KingsCourts Realtors’ lawyer-reviewed rental agreement makes this easy for you. It is state-specific, meaning your rental agreement will automatically comply with your state laws.
A good rental agreement is also specific. You should thoroughly think through what rules you want to include: Do you allow pets? Will there be a late rent fee? Are there guest parking rules? What is the specific security deposit amount and how does the tenant receive it back in full? If something breaks, who pays for the repairs? Do you want a noise restriction rule? Make sure your rental agreement is customized for you.
A clearly written rental application can forge a strong landlord-tenant relationship. It can provide timeline stipulations and set up a process for your response to residents that have property issues.
For example, should tenants expect a 24-hour maximum wait time when there’s a pressing issue? Will you be available during the entire day, or only from nine to five pm? Make sure these answers are clear and concise, and ensure your timeline follows local, state, and federal laws. Having a rental agreement that is specific to your rules and expectations can help to make communication with your tenant easier. If everything is mapped out in the rental agreement, there is likely to be less confusion down the road.
ENFORCE AND FOLLOW THE RULES
You need to enforce the rules in your rental agreement, otherwise your agreement loses its importance. Tenants will notice if you do not enforce rules and may take advantage of your leniency. The most important rule to enforce is your late rent fee. You can allow a grace period, but after that, you should make sure your tenant pays his or her late fee.
Tenants are more likely to follow rules if you do too. An example of a rule you should follow is the Notice of Entry rule, which typically requires 24-hour notice before the landlord can enter the tenant’s unit (whether for repairs, inspection, etc). It’s best to be respectful of the rules. Tenants appreciate this, too.
COLLECT RENT PAYMENTS ONLINE
Online rent payments (via bank transfer, etc) are more convenient and more secure. Research show that millennials pay 61% of their bills online, and older generations pay 42% of their bills online. The easier it is to pay rent, the more likely your tenant will pay. Tenants can even set up scheduled payments/standing orders so their rent is automatically taken out of their account. Tenants love the convenience that online payments offer, and you will love getting your payments on time every month.
Collecting rent online also provides clarity. You can immediately know when a tenant schedules a payment, what day it withdraws from his or her account, and when it will be deposited in your account.
With added convenience and security, paying rent online is the best way to make sure you get paid every month on time.
KEEP DIGITAL RECORDS OF EVERYTHING
As a landlord, you should keep records of everything: deposit receipts, rent receipts, maintenance receipts, and a record of all landlord-tenant communication. Digital records can be securely organized without creating paper clutter.
Holding onto receipts and communication records is a good idea in case legal issues emerge. If you have records of transactions and communications, then you are more likely to prove you’re right in court. Having evidence to support your claims is always a good idea.
Professionally manage your business by keeping good records. Storing records digitally is the most organized, up-to-date way to do it.
After spending time finding tenants, screening tenants, and signing a rental agreement, you don’t want all of that effort to go to waste. Constantly repeating this process can be exhausting, so the best way to preserve your time and money is to keep good tenants.
If you have a tenant who pays rent on time and takes good care of your property, then you should ask him or her to renew their rental agreement about 90 days before it expires. Renewals will help you avoid a vacancy and save you time by not having to search for new tenants.
From managing your rental property business, finding and screening tenants, and collecting rent, every step along the way matters. We want you to manage a top-notch rental business without sacrificing unnecessary amounts of time, money, and stress. KingsCourt Realtors provides an end-to-end service that is designed for the busy, independent landlord.
Give us a call and try us out today!