Tenant Screening

How to Screen a Potential Landlord

How to Screen a Potential Landlord

How to Screen a Potential Landlord

Landlords always screen potential tenants. They often require things such as references, pay stubs and a social security number for running background checks. With that said, why can’t you check your landlord?

Landlord screening can and should be performed on all potential landlords because a bad landlord makes for a terrible living situation. Peace of mind is worth a little research. There are many ways you can check your landlord before signing that lease.

Background Check
Public records checks become your new best friend when landlord screening. Whether your landlord is an individual or corporation, you can research things such as the bankruptcy, criminal records, liens on their properties, lawsuits or past foreclosures. Any of these create potential red flags against a potential landlord.

Check with the Better Business Bureau
The Better Business Bureau is a nonprofit organization that allows consumers to submit complaints about businesses. The Better Business Bureau also assigns A – F ratings for businesses. You can check your landlord on the Better Business Bureau for any complaints as well as their rating.

Talk to Current Tenants
After checking out an apartment or house to rent, check with other tenants in the building or potential neighbors. These individuals provide a wealth of knowledge on the potential landlord. Ask questions about how long it takes to get things fixed or how often rent increases. If the landlord’s tenants seem disgruntled, this indicates serious red flags for renting from this individual or company.

Check for Damage
When you tour your potential new home, keep a vigilante eye for problems. Look for things outside of normal wear and tear such as evidence of pests, mold or rotting around the doors and windows. Remember, any signs of disrepair should be a red flag.

Check Local Internet Forums
Check local forums for people complaining about your potential landlord. Many times these forums are a great source for learning about the rental market in your area. A bad landlord gains a bad reputation, and someone will eventually complain about them.

Do not rush into signing a lease before doing due diligence on your potential landlord. Follow these tips and you will be well on your way to finding a nice home with a great landlord.

7 Tips on How to Rent Your House

7 Tips on How to Rent Your House

7 Tips on How to Rent Your House

After weighing the pros and cons of selling your home or renting it out, you may have decided that renting is the most profitable solution in your situation. If that’s the case, these tips can offer some great suggestions for getting started and what you should consider before renting.

Preparing the Property

Home Inspection

Inspect the home for repair and safety issues. Check for plumbing leaks, the condition of the roof, clogged gutters and driveway safety concerns.

Cleaning

Clean the home from top to bottom. Mop floors, shampoo carpeting, clean windows and window treatments.

Repairs

Make needed repairs throughout the home and replace faulty appliances. Repaint the interior, so the home looks well cared for and is ready for renters.

Management Decisions

You’ll need to decide whether you have the time and energy to manage your rental yourself or whether you prefer to hire property management services.

Property management companies are usually responsible for screening tenants, collecting rent, making repairs and dealing with evictions. Services of this type may run anywhere from 4 percent to 12 percent of monthly rental charges.

Professional Resources

Keep a list of names and numbers for contractors, plumbers and handymen in the event of problems or emergencies.

Legal Considerations

• Contact the city and state departments to learn about the requirements for rentals in your city. Some cities may require rental property inspections and licensing.

• Always draw up a written lease to protect your rights as well as tenants.

• Learn how evictions are handled according to your state’s termination statutes.

• Notify your mortgage company that you’re renting your home. Some banks may have specific landlord requirements that must be met.

• Let your insurance agency know that the home is now a rental, and make the necessary coverage changes to landlord insurance.

• Become familiar with landlord-tenant laws in your state, especially when drafting a lease.

Tenant Verification Screening

Screening tenants may be a lengthy process, but the benefits of finding qualified renters out way troublesome renters, skipped rent payments and broken leases.

The Lease

Make sure potential renters view a copy of the lease with the terms for monthly payments, deposits and the length of the contract before applying. This can save time and eliminate potential renters who wouldn’t qualify or can’t afford the rent.

Rental Application

Have potential renters fill out a copy of your rental application with their full name, Social Security number, current address, date of birth, income, employment history, rental history and a few personal references.

Credit Check on the Tenant Applicant

After verifying the information on the rental application checks out okay, you should run a credit check on the tenant. Contact one or more of the main credit bureaus to request a copy of the applicant’s credit history. Review the history to determine if the applicant pays their bills on time or has a poor credit history.

Background Check

As part of the tenant verification screening process, if you have doubts about the applicant, you might want to consider paying for a criminal background check on a prospective tenant.

Determining Rental Charges

Use the Internet and classifieds to compare what other similar rental properties in the area are charging. Make sure you take into account your monthly mortgage amount, taxes, insurance and property maintenance costs to get a realistic amount.

Advertising for Tenants

Advertise the rental in the local newspaper, and place rental signs in the yard. Utilize Internet classifieds to advertise and make sure you highlight the best features of the home, rent and location.

Before renting your home, tend to all the legal considerations, and take the time to screen potential renters carefully.

 

Should You Rent or Buy a Home

rent or buy

Should you Rent a Home or Buy a Home

At some point, events in your life may dictate that you move into a larger space. Whether you need more room for a growing family or because you want a proper office to run your business from, moving into a home may best meet your needs. If you do move into a home, is it better to buy or rent that property?

Reasons to Rent a Home

Renting a home is a lot like leasing a car. You make monthly payments for the right to use the space much like you would if you own it. Once the lease period ends, you are free to seek out other housing options or renew the lease if your landlord allows it. Renting is ideal for those who may only be in the area for a year or two on business or who plan on buying a home of their own in the short-term.

By renting a home, you don’t have to worry about any of the maintenance. If the toilet leaks or the water heater goes out, the landlord is responsible for fixing that issue. The landlord may also be responsible for paying someone to mow your lawn or remove snow from the driveway. For those who are not handy or have a disability of any kind, having someone else take care of the maintenance may be the best reason to rent as opposed to buying.

Renting is also ideal if you don’t qualify for a mortgage or can’t get a loan to live in a preferred area. When you rent, you can send your kids to a better school district or live in a nicer property than you may be able to if you buy. It is important to keep in mind that you will have to go through a tenant screening process prior to renting to ensure that you will pay your rent and use the property in an appropriate manner.

Reasons to Buy a Home

When you buy a home, you are responsible for all the maintenance and upkeep. This means that you mow the lawn or shovel the driveway or pay someone to do it for you. You are also on the hook if the toilet fails or the roof needs to be replaced. However, there are many benefits to buying a house.

Each payment that you make helps you build equity in your property in two ways. First, the loan balance goes down every month when you pay your lender. Second, the home will appreciate in value over time, which means it will be worth more when you sell compared to what it was worth when you bought it. When you are ready to sell, this equity can be used to upgrade your current house or as a down payment for your next home.

As long as you do your due diligence during the tenant screening process, you could rent your home or a portion of your home to a tenant. Buying a duplex or turning your basement into a rental suite could allow you to offset some or all of your mortgage while living in the house full-time. Paying down your mortgage faster may allow you to buy more properties that can help generate a consistent revenue stream for yourself both now an in the future.

Whether you decide to rent or buy a home depends on your unique circumstances. If you aren’t ready to commit to a property or to a specific area, you should rent. If you are ready to put down roots and build wealth, buying is the way to go.

 

The Best Ways for Landlords to Use Their Tax Refund

The Best Ways for Landlords to Use Their Tax Refund

The Best Ways for Landlords to Use Their Tax Refund

Tax time can be a stressful time of year, but it can be nice if you receive a refund. For landlords it’s important not to let your refund go to waste. Landlords, especially, should take advantage of the lump sum to invest in certain things that will ensure their income properties continue to bring in value. By taking your refund and investing in your own rental properties, you can make your money work for you in the most profitable way possible. We’ve outlined a few specific areas you can use your refund that will improve your overall earning potential.

Repairs

Fixing something might be the most common problem a landlord could have to deal with, and having money on hand to make those repairs is nice. The best thing to do is make repairs before they cause damage and become more expensive. You’ll typically spend less money fixing something that is only partially broken or malfunctioning.

Renovations

If you have renters in a home that needs renovation, they will most certainly appreciate it when you give their rental home the upgrades and expansion it needs. This can be as simple as replacing a wall or major appliance, or it could include the addition of an entirely new room in the home. Renovations will directly increase the value of a home as well, meaning landlords can charge more per month when the house goes on the rental market again.

Upgrades

With the way modern technology advances, new equipment could be purchased nearly every year, although that’s quite unnecessary. However, upgrading the stove, dishwasher, refrigerator, AC unit, water heater, or any number of major household appliances will not only prevent the need for expensive maintenance on an old unit, but it will most likely save energy compared to the outdated tech in the older machine. Not only are upgrades economically smart, but they increase the appeal for potential tenants.

Adding New Technology

Perhaps you own rental properties that are older and can use a technology upgrade. Older homes may not have a programmable thermostat, energy efficient appliances, keyless entry, and other home automation systems. Adding new technology to your rental properties will make them safer, more valuable, and easier to rent.

Extra Loan Payments

If you happen to be lucky enough that your property doesn’t need any upgrades or repairs, you might consider making an additional payment on the mortgage. Landlords who make early payments cut down on interest.

Emergency Preparedness

Even with the most comprehensive insurance imaginable, you’ll probably end up having an emergency situation at some point. Perhaps you’ll come across an issue that isn’t covered by insurance, or you’ll go longer than you’d like without a tenant in certain properties. Having a small emergency fund can help landlords drastically protect their finances during the drought periods, and a tax refund is an excellent base fund for such emergencies.

Landscaping

Taking care of the landscaping is paramount to keeping curb appeal high. If you use some of your tax refund to revamp the exterior of your rental properties, you’ll most likely see a sharp increase in interest from potential tenants.

If you are smart enough to reinvest your tax refund in your own property, it really doesn’t matter where you focus the money.

 

Can I use Social Media to Screen Tenants

Can I use Social Media to Screen Tenants

Can I use Social Media to Screen Tenants

Landlords have tools to use for tenant screening, namely background checks into credit, criminal and employment histories. Another avenue for information is social media. Viewing these public accounts can give landlords insight into a prospective tenant’s personal habits. While this information is valuable, it cannot be legally used to judge a tenant.

Social Media Information
When screening a tenant, social media can provide information on pets that were not disclosed on the application, partying habits that might result in excessive noise or damage and how well the prospective tenant is taking care of a current rental property.

Discrimination Laws and the Fair Housing Act
While social media can be a informative tool for tenant screening, some landlords choose not to use it to avoid discrimination lawsuits. It is best practice to utilize the legally available methods when considering an application. The federal Fair Housing Act prohibits discrimination based on race, religion, color, gender, disability or family status and requires that reasonable accommodation be made for persons who are physically challenged. Landlords must also follow all state anti-discrimination laws as well.

Social Media Laws
A number of states have passed laws that protect email and social media accounts from being scrutinized by colleges and employers. Public profiles are not protected, but landlords should stay current on all laws or amendments that apply to social media and privacy while conducting tenant screening.

Screening Tips
Landlords who do check social media accounts should keep the following tips in mind:

• Equality. If one prospective tenant is checked through tenant screening, then all applicants should be checked the same way.

• Facts. Not all information presented on social media is accurate. It is possible to link online data to someone else with the same name.

• Legality. Landlords should not discriminate against protected classes of people or break federal and state laws regarding social media during the screening process.

• Document. Keep detailed records of information found online.

Using traditional tenant screening methods will keep landlords and property managers out of legal trouble.

 

You Need A Property Management Agreement

Property Management Agreements

Property Management Agreements are Necessary

Whether you are an investor with multiple rental properties who hires a property manager or a homeowner who decides to have a friend manager their property, you need you need to have a management agreement.

While this can be a positive move, many times it can set the stage for a disaster waiting to happen–if there is no adequately signed rental agreement, better known legally as a property management agreement.

Our article below covers various methods to protect yourself by using a signed rental agreement and it will lessen the chances that anything goes wrong as a property owner or property manager.

What Things Can Go Wrong?

Virtually, anything.

  • Late rent payments
  • Injury on the property
  • Foreclosure
  • Fire
  • Unauthorized repairs or modifications

How Can These Situations Be Avoided?

Many of these scenarios can easily be avoided by stipulating a manager’s job description along with their responsibilities–mutually signed by the property owner and the manager both.

What Should A Property Management Agreement Include

  • Duties performed by Management
  • Services and Fees
  • Dealing with Fees
  • Equal Housing Opportunity
  • Liability
  • Manager’s Legal Liability
  • Owner’s Responsibilities
  • Term of Contract and Grounds for Termination
  • Handling Eviction Proceedings

Property management rental agreements are not expensive nor difficult to write. However, statutes vary from state-to-state. If you have trouble writing one, then an attorney or someone well-versed in real estate matters may help you. For a free example visit: https://www.rocketlawyer.com/document/property-manager-agreement.rl

 

How Does a Credit Inquiry Affect Your Credit Report?

credit inquiry

How Does a Credit Inquiry Affect Your Credit Report?

When looking for a new home or apartment to rent, you will likely encounter some tenant screening. You may be asked to provide a completed application, employment verification, and references from previous landlords. Your new landlord may even want to check the tenant credit score, something also known as an inquiry on your credit report. There are two types of inquiries, and it is important to understand the differences between them, how they are used in the tenant screening process, and how and how long they can affect your credit score.

A soft inquiry is an inquiry that occurs when a person or company checks your credit report as a background check, like when a credit card company preapproves you for a loan. Soft inquiries can occur without your permission, but don’t worry – they won’t affect your credit in any way. When you pull your own credit report for your personal use, it is also considered a soft inquiry.

A hard inquiry, on the other hand, will provide your potential landlord or property manager with your credit (FICO) score and your credit history. This credit check is similar to the one a lender would complete prior to offering you a loan, and it can have a negative impact on your credit score. According to myFICO (www.myfico.com), a single inquiry usually has a minimal impact of just a few points. This could be higher, however, if you have a sparse or short credit history. After several hard inquiries on your credit report (apartments, insurance companies, utilities, new loans, etc.), those small impacts could add up. Hard inquiries appear on your credit report for two years and can impact your credit score for up to 12 months.

How can I get rid of hard inquiries I didn’t approve?
You can simply call or write the creditor and explain to them you did not authorize the inquiry and ask them to remove it. You can also dispute an inquiry directly with each of the credit bureaus.
For most apartment hunters, there is little need to be concerned about a credit check during the tenant screening process. Most inquiries will have little or no impact on your credit score, and even if they do have a small negative impact it will shrink over time and be gone within the year. Monitor your credit regularly, and good luck on your search to find a new home!

 

Steps to Ending a Lease With Your Tenant

End a Lease

Steps to End a Lease

If you are a landlord, there are many reasons why you may want to end a lease with a renter as the end of the term approaches. If you want to do so, it is important that you take certain steps in order to make certain you are better able to legally protect yourself. You’ll also want to do so in a way that provides your renter enough time to secure other housing so that you part on good terms.

Reasons Why Landlords Sometimes Want to End Leases

Besides a tenant who violates the terms of their lease, there are other situations that may arise that make you wish to choose nonrenewal at the end of a lease. In some cases, a landlord may want to complete significant renovations and updates to improve the value of the home. They may also want to place the house on the market free from a tenancy so that a purchasing family can move into it. In other cases, a landlord may have fallen behind on their home mortgage payments for the rental property and have a need to make certain it is empty due to an impending foreclosure or short sale. Whatever the reason may be, it is important to clearly communicate your intention to terminate the lease when it expires with your tenant well in advance of that date.

Ways to Legally Protect Yourself When Not Renewing a Lease

Before a lease ever begins, it is important that you have a move-in checklist for the renter to complete with you while you do the initial walkthrough. It may also be smart for you to have date-stamped photographs or video clearly showing the condition of the property before the tenancy begins. If the lessee later does damage when you terminate the lease, you can use both the move-in and move-out checklists along with your video and photographic evidence to support your withholding a sufficient amount from their security deposit to complete needed repairs.

Most states also require landlords to provide lessees with written notice letting them know that you do not intend to renew their leases when they expire. While some states only require a 30-day notice, others require 60 days. Even if you are in a state that requires just a 30-day notice, it’s still a good idea to give your renter at least 60 days of notice that you will not be renewing the lease. This notice should always be in letter form, and it may also be smart to mail it by certified mail. This will give them more time to find other housing and reduce the chance they will stay after the lease ends. It is also a good idea to provide letters of reference and let your lessee know that you will be happy to provide a rental reference for them.

Taking the proper steps to make certain that you are legally protected when you want to terminate a lease with your lessee is smart. Doing so can help you to prevent a host of problems and a potential need to go through a court eviction procedure for a holdover tenant.

 

Top Cities to Rent in 2016

Sunset over City of Seattle

Sunset Over City of Seattle

  1. New York City, NY:
    If you want to buy a home in New York City, you will need a lot of money to spend. The average mortgage in Manhattan is about $1.3M. A property manager or landlord can help you find the right place to rent instead that won’t break your budget.
    2. San Diego, CA:
    San Diego is a great place to live but the average mortgage is about $477,000. Rent in San Diego is about $2,300 per month. If you want to enjoy the sunshine in this incredible city, considering renting your next new home.3. Washington D.C:
    The difference between owning and renting a home in Washington D.C. is pretty dramatic. A mortgage in the nation’s capital averages $359,700 while rent averages $1,098. Talk to a property manager and see what the city has to offer in rental property amenities and benefits.

    4. Los Angeles, CA:
    Los Angeles may be the City of Angels, but it cost money to live there. A typical mortgage will average $536,000 while rental housing averages about $2,500 per month. It has a lot of benefits and great attractions as well as many rental homes.

    5. Seattle, WA:
    The Emerald city is a very desirable location for jobs and lifestyle, but the average mortgage is $450,000 while rental housing can average about $1,200 per month. Talk to a local landlord and you might just find there are a number of benefits to renting.

    6. San Francisco, CA:
    The City by the Bay is a picture perfect location, but be ready to spend heavily to own a home. The average mortgage is $800,000 while rental housing is around $3,000 per month. The city has a lot to offer and rentals can help.

    7. Memphis, TN:
    Although not considered a major metropolitan city, The city of Memphis is more rental housing friendly. The average mortgage in Memphis averages $150,000 while the average rent will run approximately $750. This is a great place to live, but rental housing can help you go farther.

    8. Fort Worth, TX:
    If you have ever considered living in Texas, take a look at the rental housing in the city. The average mortgage in Fort Worth is $175,000 while a typical rent will average about $800. There are a number of rental homes available in Fort Worth.

    9. Portland, OR:
    The City of Roses is a beautiful place to live with lots of recreation and culture, but you will have to pay out to own a home in the city. The average mortgage in Portland is $250,000 while rental housing averages about $1,200 per month.

    10.Albuquerque, NM:
    If the southwest has always intrigued you, you can find lots to be excited about. But when it comes to cost of living, the average mortgage in Albuquerque will run about $150,000 while the average rent is roughly $600 per month. Contact a property manager for details.

 

How to Handle Bothersome Tenants

How to deal with Bothersome Tenants

How to deal with Bothersome Tenants

Unfortunately, almost every long-term landlord is going to deal with bothersome tenants at some point. While proper screening should help you weed out some of the worst offenders, it is vital that you understand all landlord laws and how they could affect you in the coming years. Here is a closer look at some tips that you can use to deal with bothersome tenants and what tenant laws you should know about before renting.

Keep Your Emotions Out of It
Due to the nature of the rental industry, it is quite easy to allow emotions to take over when dealing with a tenant. Those that leave their emotions out of it, however, might never have to rely on tenant and landlord laws at all. If you ever feel as if one party is becoming angry over a particular issue, then you should try to take a step back and approach the situation from a different angle. This might include taking a day off to collect your thoughts or carrying out the interactions through emails.

Document Everything
No matter what type of communication method you decide on, it is vital that you document all requests. This includes any requests that do not fall within tenant laws and will not be fulfilled. For many landlords, the easiest way to document these requests is to have them submitted by email. This will not only provide you with a permanent copy of the request, but it will also give you the date and time that the request was submitted.

Lead by Example
Another way to make this process as stress-free as possible is to lead by example. This includes sticking to your word and following through with any home repairs or replacements that you have agreed to. Issues such as failing to complete the work, showing up late, or not showing up at all will set the tone for all future interactions. Sticking to your word will also provide you with an additional layer of legal protection should these issues turn into a civil case.

Determining Legality
Completely ignoring these requests is not only a bad business practice, but it can also be illegal. Landlords are required by law to provide a tenant with a safe and functioning living space. That being said, you are not required to fulfill every request that is made. As a general rule, a landlord must maintain a home and make replacements or repairs after typical wear and tear. If the tenants damage your property, however, then they will be responsible for repairs or replacements.

Handling Invalid Requests
Even if you do not plan on fulfilling a request, it is important that you respond to the tenant. The best way to go about this is to clearly state that you will not be fulfilling the request and then directing them to your lease agreement, rental agreement, or the pertinent law. You should also keep a copy of the official request for as long as they remain a tenant. Verbal requests must be avoided at all costs, and landlords should ask their tenants to write down the information, sign it, and date the document.