Tenant Screening

What does the tenant’s credit score really mean?

What does the Credit Score really mean

What does the Credit Score really mean

Being in the credit reporting industry for over 15 years, I’ve heard that question hundreds of times. “What does a credit score really mean?”

It’s funny because these scores determine whether we approve or are approved for some of the biggest choices in life yet most of us have no idea what the number means or how it’s calculated. Whether the scores are used to evaluate a tenant application, mortgage application or the approval for the purchase of a new car, these scores are powerful. Understanding them is critical to helping you choose the right tenants and for keeping your own credit score as high as possible.

As you already know, there are 3 credit reporting bureaus: Trans Union, Experian and Equifax. For better or worse, that’s it. All of the information that is compiled on a person’s debt, payment and collections history lives at one, two or all three of these bureaus. The data is reported to them from thousands of various creditors, collectors and public record data bases. Not just anyone can report data to the bureaus. Companies and organizations have to be validated as reliable data sources and go through an extensive accreditation process to report data to the bureaus.

That said, that doesn’t mean that all the data reported by the companies reporting to the bureaus is perfectly accurate. Most of it is, but there is an element of human error and technical mess ups in any data reporting. It’s important for everyone to take advantage of the “free credit report” each consumer is allotted annually to ensure the data on your report is accurate.

But even with its occasional errors, the credit report is still the single best tool for evaluating a person’s likelihood to pay as promised. For a property manager or a landlord, I would suggest always pulling a tenant credit report to evaluate an applicant. You’re getting a lengthy snapshot of the renter’s payment history which gives you a good idea of whether they will pay you on time, late or at all.

Let’s look at some quick key information about credit scores and how they are calculated:

 

What things affect scores, and how much?

The credit score falls in a range of 300-850 with 850 being perfect.

Picture the factors affecting a credit score as a pie chart. The areas affecting the score calculation the most take up the biggest parts of the pie and are therefore weighed more heavily.

Payment history:

This includes the timeliness of payment as reported by accounts including mortgage, credit cards, utilities, auto, etc.

The bureaus are looking at whether accounts are paid as agreed and the severity of any delinquency. They’ll focus on the time since derogatory reporting occurred. But they also evaluate the positive credit following past payment problems. In other words, it’s never too late to start building a better score. They will also weigh the amounts past due on any accounts and the number of items past due. Obviously adverse public records like bankruptcies, liens and judgments carry a lot of weight here.

Amount of credit owing:

This looks at how much money is owed or outstanding.

The amount of money owing on accounts (determined by type of account) is evaluated heavily here along with the number of accounts with balances owing. Another thing that hurts a credit score is carrying a high balance on a revolving credit account even if you have a high credit limit and are paying as agreed. It shows an accumulation of debt with a high risk since it’s not being eliminated month after month.

Length of credit history:

The score is affected by how much credit history has been established. The longer, the better.

This is a tough one for people trying to establish credit for the first time. If they don’t have a lot of time under their belts paying on accounts, it will bring down their scores initially. However, paying the accounts they have on time will build a great score over time. That said, some people open accounts they don’t intend to use just to establish a credit history, or to get that 20% discount at the store (yes, even I’ve done it). But if you never use that account, it actually hurts you. The bureaus look at the dates since last account activity to evaluate the weight and viability of the account and an unused account is seen as a negative. Do you have five store cards open that you seldom or never use? Close them. Best rule of thumb is if you don’t need it, close it or don’t open it in the first place. That 20% discount is not worth the long term hit to your credit score.

New credit:

New accounts affect the score less since the track record with these accounts is short.

This includes the number of recently opened accounts (which are those store accounts you opened for the discount) the time since account was opened and the number of recent credit inquiries. I’ll say it again, please pass up the store credit cards!

Types of credit in use:

The bureaus like to see a diverse line of credit to illustrate the subject can manage a variety of accounts such as auto, revolving credit cards, bank loans, etc.

Try to maintain a mixture of revolving & installment accounts and pay them as agreed. A good number of accounts is two to five various kinds.

With all the factors considered, it’s important to understand what affects a credit score. It will help you understand what you are looking at when you see your own score or the score of your tenant applicant.

Again, I believe pulling a credit report to screen tenant applicants is a very smart move for landlords and property managers alike, one that can give you insight into the applicant’s payment patterns. It’s better to know upfront than to find out the hard and expensive way. I hope this article was helpful to you. Let us know!

Happy renting!

Renting your property

Renting your Property

Renting your Property

If you’re thinking about renting out your property, it’s important to set a rent that will cover your costs, earn you a profit, minimize vacancies and provide value to your tenants.

The key factor in determining your home’s rental price is its assessed value. Ask at least 1.1 percent of your home’s value up to $100,000, 1.0 percent for the next $25,000, and less than 1.0 percent for the remainder. This factors in such variables as usage and wear, as well as the length of time that your property goes empty in between renters.

The value of the premium you charge for additional amenities or grounds is a judgment call that reflects both the added value you are providing to renters and the extra costs you bear as a resulting of maintaining, repairing and replacing the extra perks. If you rent your home fully furnished, you can ask a considerably higher rent, about double what you would ask for an empty property–and even more if you have high-quality furniture and expensive decorations. In the event your property has the opposite of amenities, such as dysfunctional plumbing or a shabby lawn, the same logic applies in reverse: Ask a lower rent to offset these unappealing features.

You have to adjust your rent to reflect the local rental economy. If rental properties in your neighborhood are going unoccupied, then it makes sense for you to adjust your rent downward so as to be more likely to attract a tenant. If rental housing is in short supply, you can ask for a higher rent. Generally, in a low-demand economy you may have to reduce your rent by one-third to one-half as compared to a high-demand economy.

The desirability of a location is tricky to estimate. One renter might place a premium on a location near bus lines, coffee houses and museums, while another might place a premium on a secluded, quiet property with no commerce nearby. You can spin your advertisement so as to appeal to people who will be more likely to place a premium on the location of your property. Some factors are unspinnable: If your property is next to railroad tracks or a sewage treatment plant, you will need to ask a lower rent in order to remain competitive.

You can expect to collect a premium for shorter rental durations. This reflects two purposes. First, it reflects the fact that your own costs are increased because of having to clean and prepare the property more often. Likewise, it reflects the cost of a greater frequency of vacancy. Second, it reflects the different nature of short-term versus long-term housing. People who are renting for the short term are usually doing so for some special occasion, in addition to their underlying need for living space. That makes the rental worth more, to the tune of 10 to 50 percent depending on the length of the rental, as compared to a long-term rental of six months or more.

Tenant Screening 411 – What Info Should I Really Check?

Tenant Screening 411

Tenant Screening 411

With more rental property on the market than ever before, property managers are at their busiest. From showing properties to handling maintenance issues, you’ve got your hands full. The last thing you need is troublesome tenants on top of your daily stresses. Screening tenants thoroughly not only helps you make the best business decisions possible, it also creates a safer, happier living experience for everyone in the property’s community.

As the owner of StarPoint Tenant Screening, I’ve seen a lot of different information products over the last 15 years. It can get confusing for busy property managers to weed through it all. Here we’ll take a quick walk through the basics of the tenant screening process and give you some tips to help you save time, money and energy.

The Tenant Application

Whether you have an online application on your website or a standard form, make it as thorough as possible. This is a situation where more is definitely better. I’ve had many property managers that have had to waste time (which equals money) to track down applicants for additional information so the proper background screening information can be completed. Attached is a thorough application sample that includes all the items below.

Critical data:

First, middle and last name. Get that middle name! It can be a critical factor in returning the correct criminal information on an applicant. Surprisingly criminal and correctional records rarely contain a social security number for the offender. They typically have a fist name, middle name or initial, last name and the date of birth listed. By submitting both the middle name and data of birth, you ensure you’ll get the most accurate records back on your applicant.

Date of Birth. Like the middle name, providing the date of birth will keep you from getting inaccurate results on your criminal record searches.

Social Security Number. If you want to pull a credit report, employment verification or ID verification on an applicant, the social is a must. The credit bureaus cannot supply any data regarding your applicant’s credit history without this 9 digit number. Also, most employers will not verify any employment information without it nor can you verify identity with a social security database which can be valuable in some cases. Be sure that you can make out the numbers on a hand written application. I’ve seen too many property managers input wrong numbers from deciphering handwriting and then they get no data back on the reports.

Current Address. The credit bureaus require a current address be submitted with a request for a credit report. This is also necessary to verify the applicant’s history with the previous landlord.

Previous Landlord Information. One of the best sources for information on what kind of tenant you might have is the previous landlord. In processing these reports landlords have told me everything from “They paid early and made property improvements” to “their pet ruined the property and I would never rent to them again”.

Employment Information. This is critical if you want to verify the applicant’s current employment and salary. It’s also just good data to have in your data base if you choose to rent to them and need to contact them at work.

Signed Release/Disclosure. It is legally necessary to include a release/disclosure statement on your tenant application or as a separate document and the statement must be acknowledged with the tenant’s signature and date. It is a violation of the FCRA to request a consumer report without their consent. A consumer report can be a credit report or any prepared background or reference report.

Now Which Screening Reports do I Run and How?

My company like others offers a wide variety of tenant screening reports and searches. We pride ourselves in not overselling our clients. We want you to get what you need without ordering unnecessary data and increasing your costs. You’ve got a business to run. Here I’ll explain and recommend various reports.

Credit Report. I tell all my clients to start here. There is no better way to get an accurate indicator of an applicant’s probability to pay rent on time than the credit report. You’ll instantly get their entire credit history including their monthly payment obligations, number of collection accounts, amount of past due accounts and any liens of judgments on their file such as bankruptcies, etc. Evictions can show up on the credit report as a public record judgment, but it’s rare. The Eviction Report is your best bet to catch a filing but frankly I think the Previous Landlord Verification is more valuable. We’ll talk more about that below.

Criminal Searches. The criminal search can be the most important report to run next to the credit report. It’s a smart choice to do your due diligence when placing a tenant. These reports are instant, inexpensive and the data is abundant. You get an instant snap shot of an applicant’s criminal history from felonies and misdemeanors, to traffic violations and sex offender data. The draw back? As I mentioned earlier surprisingly criminal and correctional records rarely contain a social security number for the offender. This creates a problem on applicant searches for common names like John Smith. You can get a flood of records that match the name. By entering the middle name and data of birth, you can ensure you’ll get the most accurate records back on your applicant. The screening system my company provides also allows you to filter the data returned. You can view all data, or just records less than 10 years old plus you can view supplemental data for the offenses such as sentencing dates, prosecutor information and arrest dates.

Eviction Reports. The eviction report searches court records for eviction filings and reports them whether the tenant was judged or not. Again, this report is searched by name and date of birth only as social security numbers are not entered on the eviction filing.

Previous Landlord Verifications. I personally think the previous landlord verification is more useful than the eviction report. With this verification, the tenant’s landlord is personally contact by a company like mine and asked to verify lease dates, rent amount, if there were any late payments or returned checks, whether they would rent to the tenant again and more. We see that most landlord complaints are not severe enough for them to evict the tenant, but they are negative enough for them to never rent to the tenant again.

Employment Verification. This is a very important report which verifies the tenant has the salary they stated on their application and can meet your income to rent ratio criteria. The employer is personally contacted by a company like mine and asked to verify the applicant’s hire date, current status and salary.

ID Verification/SSN Verification. I would not run this report if you are also running a credit report as the social security number is verified by the credit bureaus. However if you are not running a credit report it can be useful to determine the applicant is who they claim to be.

All of the reports above can be ordered conveniently online with most vendors, including my company, StarPoint Tenant Screening. A very thorough screening can easily be done inexpensively and quickly helping you make sound decisions quickly. Making good tenant selections makes for a more profitable bottom line and a lot less headaches. We wish you happy leasing!

Questions? E-mail me at kgontarski@starpointscreening.com

How to Comply with the Fair Credit Reporting Act

Fair Credit Reporting Act Compliance

Fair Credit Reporting Act Compliance

If you’re a landlord, you can use consumer credit reports as part of your tenant screening process to evaluate rental applications – as long as you follow the provisions of the Fair Credit Reporting Act (FCRA).

The FCRA is designed to protect the privacy of consumer report information and to guarantee that the information supplied by consumer reporting agencies (CRAs) is as accurate as possible. The FCRA requires landlords who deny a lease based on information in the applicant’s consumer report to provide the applicant with an “adverse action notice.”

What is a Consumer Report?

A consumer report contains information about a person’s credit characteristics, character, general reputation, and lifestyle. A report also may include information about someone’s rental history, such as information from previous landlords or from public records like housing court or eviction files. To be covered by the FCRA, a report must be prepared by a CRA – a business that assembles such reports for other businesses. The most common type of CRA is the credit bureau.

Landlords often use consumer credit reports to help them evaluate rental applications. These reports include:

  • A credit report from a credit bureau, such as Trans Union, Experian, and Equifax or an affiliate company;
  • A report from a tenant-screening service that describes the applicant’s rental history based on reports from previous landlords or housing court records;
  • A report from a tenant-screening service that describes the applicant’s rental history, and also includes a credit report the service got from a credit bureau;
  • A report from a tenant-screening service that is limited to a credit report the service got from a credit bureau; and
  • A report from a reference-checking service that contacts previous landlords or other parties listed on the rental application on behalf of the rental property owner.

Landlords often ask applicants to give personal, employment and previous landlord references on their rental applications. Whether verifying such references is covered by the FCRA depends on who does the verification. A reference verified by the landlord’s employee is not covered by the Act; a reference verified by an agency hired by the landlord to do the verification is covered.

What is an Adverse Action?

An adverse action is any action by a landlord that is unfavorable to the interests of a rental applicant. Common adverse actions by landlords include:

  • Denying the application;
  • Requiring a co-signer on the lease;
  • Requiring a deposit that would not be required for another applicant;
  • Requiring a larger deposit than might be required for another applicant; and
  • Raising the rent to a higher amount than for another applicant.

The Adverse Action Notice

When an adverse action is taken that is based solely or partly on information in a consumer report, the FCRA requires you to provide a notice of the adverse action to the consumer. The notice must include:

  • The name, address and telephone number of the CRA that supplied the consumer report, including a toll-free telephone number for CRAs that maintain files nationwide;
  • A statement that the CRA that supplied the report did not make the decision to take the adverse action and cannot give the specific reasons for it; and
  • A notice of the individual’s right to dispute the accuracy or completeness of any information the CRA furnished, and the consumer’s right to a free report from the CRA upon request within 60 days.

Disclosure of this information is important because some consumer reports contain errors.

The adverse action notice is required even if information in the consumer credit report was not the main reason for the denial, the increase in security deposit or rent or other adverse action. In fact, even if the information in the report plays only a small part in the overall decision, the applicant still must be notified.

While oral adverse action notices are allowed, written notices provide proof of FCRA compliance.

Non-Compliance with the FCRA

Landlords who fail to provide required disclosure notices face legal consequences. The FCRA allows individuals to sue landlords for damages in federal court. A person who successfully sues is entitled to recover court costs and reasonable legal fees. The law also allows individuals to seek punitive damages for deliberate violations of the FCRA. In addition, the Federal Trade Commission (FTC), other federal agencies and the states may sue landlords for non-compliance and get civil penalties.

However, a landlord who inadvertently fails to provide a required notice in an isolated case has legal protections, so long as he or she can demonstrate “that at the time of the . . . violation he maintained reasonable procedures to assure compliance” with the FCRA.

8 Questionable Rental Fees to Avoid Charging

rental fees

Questionable Rental Fees

Not all fees are created equal. In fact, some stretch the law.

 1. Excessive late-rent fee
The Landlord Protection Agency, a website that provides advice for landlords, has this to say about late-rent fees: “Late charges should hurt. … It should be a painful enough fee that the tenant will not want to pay again. Ever.”

Although the site says its forms are legally credible, this free advice may have bypassed such review. Lawyers in any state will tell you that late-rent fees are not to be used as punishment or deterrent.

“The purpose of the late fee is an attempt to try and compensate the landlord for the inconvenience or cost associated with a late payment,” says Steven R. Kellman, director of the Tenants Legal Center of San Diego. “It is not meant to be a bully stick waved at the tenant. The idea that I’m going to whip you each day you don’t pay, that’s not the intent of the law.”

2. Overnight guest fee
Here’s another fee that doesn’t pass the test.

Plenty of landlord notices lay out a $25 charge for a tenant’s overnight guest, for example, or a $50 rent increase for an additional occupant.

There’s just one obstacle: federal law, says Kellman, who sees plenty of unenforceable lease provisions that naive landlords pull from the Web.

A landlord can limit total occupancy at a point set by law — typically two people per bedroom plus two — to protect his unit. He can also require that a permanent occupant pass a criminal background check. But he can’t tack on arbitrary charges, Kellman says.

“That’s illegal, because it’s discrimination under familial status,” he says. “If you want to have a relative move in or have a baby, that’s your right.”

If landlords are concerned about the extra cost of water or electricity, “then they need to get separate meters and you pay for what you use,” he says.

3. Unnecessary application fee
It’s OK for a landlord to pass along the cost he must incur to run credit and security checks. But some states limit the amount per tenant. And in all cases it is illegal for the landlord to take the fee and not run the check.

4. Repair fees
If you pay to rent an apartment, part of the deal is that the landlord keeps the property in working order. In fact, he is legally responsible for maintaining a fit and habitable dwelling. He cannot charge tenants for repairs.

The exception would be if a tenant broke something through blatant negligence. In that case, the tenant would have to fix it.

If landlords were allowed to charge for upkeep or make tenants do it, some might allow units to fall into disrepair, leaving tenants in substandard housing. Legislators passed laws to prevent that.

“It’s the same reason that we require people who make Cheerios to have clean factories, and why we don’t allow Pintos to have exploding gas tanks,” says Janet Portman, a housing lawyer with Nolo, a publisher of legal guides. “It just comes down to a legal principle that you just can’t do that.”

5. Redecorating or cleaning fee
This is essentially to pay for the extra fix-ups landlords do between tenants, maybe a deep carpet shampoo or repainting the walls. But this is not the tenant’s responsibility. The tenant has covered his own damage through the security deposit. Any scuffing or fading that’s the result of normal wear and tear should not come out of the tenant’s pocket.

This onerous fee might also be called an automatic damage fee, a refurbishing fee or a move-in fee.

“If a landlord generally cleans a unit after one tenant leaves and another tenant moves in, that’s not typically a fee a landlord can assess a tenant,” says Peter Iskin, a lawyer with the Legal Aid Society of Cleveland.

6. Administrative or processing fee
It costs money to advertise a unit, and some managers want to pass this cost along to tenants, although they’re often vague about just what this $50 to $300 is for.

Sometimes it’s used only in lieu of a credit-check fee; other times it’s applied toward advertising, staff and even printing-paper costs.

“There are an immense number of fees being added that 10 years ago we didn’t get from people,” said Del Walmsley, a landlord with multiunit buildings. And this one “is just garbage, a way to get upfront money from people.”

In some states, the law agrees. Massachusetts and California, for example, have strict regulations that prevent landlords from passing along basic overhead costs. Staff and office supplies dressed up as administrative fees? Those won’t get by a judge. Late fees that exceed the reasonable costs incurred by the landlord for that extra trip to the bank? Those also won’t fly.

 

7. Any fee called “a nonrefundable deposit”
A deposit, by definition, is returned when certain conditions are met. A security deposit, for example, is returned to the tenant if the unit is left in good condition. If it won’t be returned, it’s a fee, not a deposit.

If someone asks you for a “nonrefundable cleaning deposit,” for example, tell them that you’ve already given them a security deposit.

8. Finder’s fee or holding fee
This is a fee the tenant pays to supposedly hold the unit, but in many places they’re illegal, lawyers say.

Also, such fees don’t provide the tenant a legal guarantee that he will get the apartment. Landlords can also be harmed, by taking units off the market only to have a tenant change his mind.

“Making these types of agreements that are not clearly legal creates complex situations that very often cause a problem,” says Michael Kelley, director of rental housing resources for the city of Boston.

Only a licensed broker may charge a fee, and that’s for additional assistance in locating an apartment.

Check your state laws
See what fees are legal in your state by checking with the consumer-affairs division. The city, or a university housing office, may also list fees that landlords may legally charge tenants in your area.

“If it’s not listed as a legal fee, then it’s in fact an illegal fee — even if it’s not listed that way,” Kelley says

When to ask for help making rental improvements

rental_improvements

Help with your Rental Improvements

As a property investor, you may have your eye finely focused on your bottom line. You understand that maximizing your net income is directly related to how well your property is maintained as well as to how well you are able to control expenses. With this in mind, you may want to make as many rental improvements as possible on your property through your own efforts. However, it is not always feasible, practical or cost-effective to complete all required work on your rental home on your own.

Understanding what work to do on your rental home on your own and determining when to call a contractor for assistance are important to your overall success as an investor. Property improvements that you complete on your own should be commensurate with your skills and expertise. If you are not comfortable doing woodworking activities or working with a table saw, for example, property improvements related to building a deck or replacing the trim throughout the home should be contracted out. In addition, you should also consider the amount of time and effort that the project will take to complete. Ideally, you want complete the project in a minimal amount of time. You do not want to disrupt your tenants’ lives if the property is occupied. If the property is vacant, you may need to complete the project quickly so that a new tenant can move in.

Rental improvements can help you to maintain or improve property condition and value, and you certainly want to do what you can to keep costs as low as possible. However, in some cases, it can be a detriment to complete a project on your own, and it may be better overall to have a professional do the work for you. Before you move forward with your next project, you can review the skills that are required and estimate the amount of time and effort required. If you are not comfortable with any aspect of the project or if you believe that it would take you a long time to complete it, it may be best to request professional services with a contractor.

Purchasing Rental Property with Family or a Friend

Purchasing Rental Property with Family or a Friend

Purchasing Rental Property with Family or a Friend

Purchasing rental property can be a way to invest in real estate, and doing so with friends or relatives may seem like a good arrangement. However, a rental property investment carries a lot of risk, and there are some things you should consider before going into business with people with whom you have a personal relationship.

Perks
There are definitely some advantages to purchasing rental property along with family members and friends. If you have always wanted to start a family business, investing in rental properties could be a good start. And a partnership with a parent or sibling could allow you to spend more time together. You also might have an easier time convincing someone who knows you to enter a business relationships with you. If the venture is successful, it can be a good way to earn money and keep it in the family.

Pitfalls
Whenever you go into business with someone, there are always potential problems, and those potential problems can be magnified when your business partner is a family member. If the rental property is not successful, it can be difficult to end the business relationship and still have a personal relationship.

One thing you definitely have to avoid when purchasing rental property with a friend or relative is taking advantage or allowing yourself to take advantage of your personal relationship. Don’t make handshake deals; put everything in writing. That includes who owns how much of what, how profits will be distributed and under what circumstances the business can be dissolved. You also need to have official tenant screening procedures in place and not allow friends and family members to live in the property without going through tenant screening.

Keep in mind, too, that once you put your name on a mortgage, you can’t get out of it unless the other partners are willing to refinance and buy you out.

Ultimately, when purchasing rental property with friends or family members, you should treat it like any other business arrangement, do your due diligence and put everything in writing.

 

Earn Extra Cash by Renting your House During Events

Earn MoneyIf you have a vacant property, then there is a way that you can get some use of out it in the short term. By renting out your property when events like festivals and fairs are in progress, you can make your property work for you and gain you some much-needed income. Hotels, cabins, and campgrounds often fill up ahead of large events, so there are always people looking to find a place to stay who were not lucky enough to book accommodations in advance. If you advertise your property for rent during large local events, then you can cash in on some of the money that travelers already plan to spend in your area.

Experts recommend that if you own a rental property that you always screen your guests, even if they are only staying for a short period. The reason behind the advice is that screening temporary tenants helps prevent costly damages and repairs. It is always important to make sure that any renter is a responsible group instead of a possible threat to your rental property.

Some of the most popular events that people look to attend include air shows, trade exhibitions, and large festivals like Strawberry Festivals and popular music events. When a large event is happening in your town, you can do a quick background check online for the intended renters and ask for a deposit that is refunded when the property is left clean and undamaged. Offering cleaning services, use of appliances, extra beds like cots and roll-out beds are excellent ways to entice people to rent your property when they come to town.

When you offer services that other businesses do not have like complimentary breakfasts, hot tub access, or garage access, it helps make your rental property more appealing. The better appeal makes people want to come back the next time a large event is in town, and you can begin booking people in advance. Some renters may even ask to book for the next years event, so they never have to worry about finding a place to stay at the last minute again.

5 Tips for Purchasing a Rental Property

Female real estate agent giving house keys to a man

5 Tips for Purchasing Rental Property

Buying at the Right Price

Finding the right price is of paramount concern when it comes to closing the deal on an investment property. Properties that offer greater value will ensure that owners are better able to withstand fluctuations within the market that might otherwise result in diminishing returns. While larger properties that have the potential to provide superior rental income may be an attractive option, taking advantage of purchase costs that offer greater value means that even smaller properties can provide the best investment opportunities.

Selecting the Best Neighborhoods and Locations

Ensuring that neighbors will be more accepting of your rental property is not a concern that should escape notice. Residents of working-class neighborhoods and those found in lower income areas are often more understanding of neighbors who choose to rent their home rather than owning their property outright. The right location is also a key concern when it comes to attracting renters.

Selecting Properties That Offer Ample Parking

Growing families often require plenty of parking in order to accommodate their household. Unlike other issues and limitations may be easily addressed through renovation projects or upgrades, limited parking can be very difficult to address. A garage, driveway or ample curbside parking can make a world in ensuring the needs of tenants can be met.

Quality Construction and Simple Design

Lavish homes and locations that showcase sophisticated construction and design can be a nightmare in terms of maintenance and upkeep. Owners may find themselves faced with considerable expense should they elect to invest in a rental property that is not easily maintained. A simple layout and proven construction quality are never considerations that should go overlooked when selecting a rental property that can be maintained with a minimum of effort and expense.

Purchasing a Rental Property Close to Home

Meeting the needs of your tenants is far more difficult for those who purchase a rental property too far from home. The additional costs needed to employ a property management service or contractor will be easier to avoid for owners who can more easily and conveniently provide maintenance services and make themselves available to tenants.

 

Using Smart Home Technology in Your Rental Property

Using-Smart-Home-TechnologySmart home technology has advanced to a degree that makes it functional, reliable, and affordable. Many homeowners now expect homes to be ready for smart home tech integration. When it comes to rental properties however, many homeowners are missing out on an incredible opportunity to increase the visibility and value of their rental property.

Rental home technology immediately gives your home an advantage in rental listings since many rental properties do not feature smart home technology. Even a mediocre looking property can look sophisticated and modern with smart home technology featured prominently in the listing. For vacation property rentals, every feature and perk can bump your rental property up in value and visibility.

Rental home technology also provides property owners greater control, ease of access, and management tools. With rental home technology your tenants can download an app and you give them access to everything from lights, locks and a/c to television and stereo controls. For example, your tenants left the heat on in your winter cottage? What would normally require a visit can now be easily remedied directly from your smart phone. Tenants locked themselves out? You can open the door for them remotely from your phone. Smart home technology also allows your tenants to have greater control and comfort in the property itself. Many tenants spend lots of time looking for light switches, remotes, or calling you to solve small problems like turning on the TV or watching a DVD. Smart home technology can supplant all of these problems easily and quickly, making your property much more valuable and a place to which your tenants will return over and over. In a highly competitive rental property market, a small perk can make the difference between a tenant choosing your rental property or someone else’s.

Smart home technology can increase the ease of management, make your property more appealing, and increase the value of your property. With so many options of smart home technology integration at an extremely reasonable cost, it makes all the sense in the world to invest in smart home technology.