Tips for landlords
August 16, 2022
Did you know that 35% of households live in rental properties? Just like a regular home, rental properties need to be insured as well. At WebFirst Insurance, LLC, we want to provide some tips for landlords, and what to keep in mind when shopping around for insurance.
Three common landlord mistakes to avoid
For most landlords, managing your property is not your full time job. However, with all of the tasks that go into being a landlord, such as screening tenants, maintaining the property, doing renovations, and making sure paperwork is in order, it’s easy to rush through the small steps that may seem insignificant at first, but could end up costing you down the road. Here are some helpful tips to keep in mind when starting out as a landlord.
Research the rental price before listing.
Decide your rental price and how much profit you want to make off the apartment before you list for tenants. It’ll help determine what kind of tenants you’ll be getting, as well as how quickly you’re able to rent out the place. Don’t make the mistake of recycling your rental price year after year. Keep these things in mind every year when determining the price of your rental property:
- Study the rental market. Do a quick search of other units on the market and see how they’re priced. Only compare your price to the price of units in your neighborhood since location is one of the biggest drivers of rent prices. Compare units that provide similar value, such as how updated the appliances are and if they provide similar amenities.
- Anticipate maintenance and repairs. Make sure the rent amount allows for occasional maintenance costs like plumbing or electrical issues, and takes into consideration more long-term items like appliance and roof replacement or structural repairs.
Perfect the rental agreement.
Your rental agreement is your guide to how your rental property will be lived in and managed. It’s your opportunity to set rules. A common landlord mistake is not modifying the rental agreement to reflect your own rules. Landlord’s should research landlord tenant laws to ensure you’re following state and local laws. Consider meeting with a lawyer for legal counsel on the matter as well. Good rental agreements are specific, so be specific with your rules.
Enforce (and follow) the rules.
Letting rules slide is a common landlord error. This only reinforces bad behavior and decreases the validity of your rental agreement. Late fees are the most important rule to follow. They’re designed to motivate your tenants to pay on time. Tenants are more likely to forget to pay rent if there’s no retribution for forgetting. Be firm about your late fee rule. It’s also important for the landlord to follow rules on their end. There are several rules in place to hold the landlord to proper protocols as well. For example, the notice of entry clause specifies how far in advance you should warn tenants when you’ll be entering the rental unit. Make sure you’re also familiar with the Fair Housing Act.
Conducting tenant background checks
Before allowing a tenant to sign a contract and move into your rental property, make sure to conduct a proper background check on them. This includes running a credit check, a check on previous history of living in an apartment, and a check for previous eviction notices. Here are some tips for conducting a proper tenant background check:
- Let your tenant(s) know that you’ll be running a background check before they apply.This will help increase credibility and trust between you and the tenant.
- Provide the tenant an opportunity to apply either online or on paper. This way you can gather the information you need to run the background check.
- Run the credit check. Use an online service to check the credit of your prospective tenant. Once you enter the email address of your prospective tenant, they will be asked to enter their social security number. From there, you can view their credit score, red flags, account summaries, and tradelines. Some examples of credit report websites you can use are TurboTenant and Experian.
- Red flags are typically indications of potential fraud, and this information is gathered based on a tenant’s residence history and employer info.
- Account summaries is your tenant’s current monthly balances organized by account type and their current debt load.
- Lastly, you’ll view a tradeline of each open account complete with payment status, so you know whether they have a history of making payments on time.
- You can also run tenant background checks and view eviction reports. This shows you how your prospective tenant treats society and their neighbors, as well as viewing how many times they’ve been evicted, as well as the reason for eviction.
Requiring Rental Insurance from Your Tenants
It is important for a landlord to require renter’s insurance in the contract, because you are protecting both yourself and your tenants. Here are some benefits of requiring renter’s insurance:
- It mitigates the threat of a lawsuit
- It reduces the responsibility of the landlord
- It will help you find more responsible tenants
- It covers your deductible
- It gives you peace of mind
We know that there’s a lot that goes into managing your rental property. Sometimes, purchasing insurance for your rental property ends up on the backburner because there’s so many other things to worry about. Let WebFirst Insurance, LLC, give you the peace of mind you deserve with affordable rental property coverage that fits your needs.