With a lot of thought and some help from a few pals in property management, here is my top-10, best pieces of advice that I can give YOU about owning investment property in 2024. I’ve even included some links to other helpful blogs in case you really wanted to “nerd it up” and make a day of it! 🤓
#1Â Tenant Selection: The single most important decision you will make. Â
Selecting the best qualified tenant will determine your success (or failure) during the lease term. Use facts and data, never feelings or “gut.” Prepare your rental requirements in advance of advertising your home and do not make exceptions for anyone. List rental requirements in all ads. Keep the same standards for everyone and be cognizant of Fair Housing laws – national and state. Â
If a tenant is unqualified for your home, tell them so and wish them well. It is better to have vacancy loss than to take someone that has poor credit or rental history, even those that “seemed so nice.”
#2 Marketing your home – It’s all about the photos and the showings!
Prepare your home for advertising photos and showings, like the King of England is coming to visit. Take awesome photos with a wide-angle lens at complimentary angles in landscape mode, not portrait. Consider staging! Store your full-resolution photos for future use to rent the home during the next tenancy, so you can avoid vacancy loss. Â
If your photos ROCK and still no one is calling, it’s likely a pricing issue that needs a tweakin’!
#3 Pet Acceptance – You’ll make more $$$ by being “open” to pets.
Seriously consider accepting pets for well-qualified applicants. Excluding pet owners in your advertisements will exclude a good portion (50-75%) of the shopping public, resulting in slower rentals at lower prices. By vetting and accepting well-qualified applicants who just so happen to also own pets, you are probably going to be just fine, but always collect a deposit for each pet accepted just in case, have a Pet Addendum that lays out the rules for the pets at the home and perform occupied inspections on a regular basis.
#4 CYA in all things – That starts with putting together a solid lease!
Be ready to vet the credit and rental history of prospective tenants to confirm that they meet your qualifications. Once approved, have a solid lease ready for them to sign. Make sure your lease is appropriate for the state that you live in and that there are no terms in there that violate landlord/tenant laws in your area. Collect applicable deposits upon approval. If all terms of the lease are met, you must refund all deposits in a timely manner after move-out.
#5 Prepare for move-in day UNTIL move-in day, and always leave a gift!
You must deliver the home to your tenant to the standard of the lease that you had them sign, so make it a HIGH standard. Delivering your home at a high standard sets tenants up to be successful, to take pride in your home and feel good about caring for it and making it their own – hopefully for a good long while. Â Tenants are more likely to take great care of the home and return it to you in-kind when you delivered it to them thusly. Â
Leave a move-in gift at your home to welcome your tenant. Them “liking” you is kind of important to a successful relationship and will encourage them be patient with you when things break or there are other inconveniences which there will be.
#6 Discover your inner photographer, you may be showing those photos to a judge one day!
Prior to a tenant moving in, take hundreds of date-stamped photos of all rooms and systems to not only document the condition of the home, but also its cleanliness. Zoom in and out on surfaces. Document perfections and imperfections. Save preparation receipts for things like carpet cleaning, fireplace inspection, housekeeping expenses, etc. Â
At move out, you MUST have records to support charges to your tenant’s deposit. If you don’t have your ducks in a row, you run the risk of looking really bad in front of a judge, and you could end up owing your tenant instead of the other way around. Â
#7 $ock away money! It’s an “investment” property, after all.
Have a credit card, savings account, home equity line of credit, or even a rich uncle, but be ready to handle things in a timely manner. Remember that most operating costs are tax deductible. Never pay current mortgage payments with current rent payments, just in case. ALWAY$ expect that several big-ticket items could go out at the same time, because that’s how life works, isn’t it?
#8 Maintenance is not just addressing a repair request.
Remember things break and that is normal. Avoid the repair-only-on-request approach to home maintenance. Keeping your home in good condition helps it market best to prospective tenants and encourages current tenants to also perform the tenant-required maintenance as well, such as landscaping and filter changes. If you aren’t doing your part, why on earth would they do theirs? I highly discourage home warranties for a plethora of reasons; it’s best to use vetted and insured vendors like a good property manager does.
Seasonal Maintenance:
- Have your HVAC systems cleaned/inspected no less than bi-yearly. Â
- Protect your woodwork with appropriate protectants to avoid costly wood replacements –usually about every 2 years on decks and anytime you see chipping paint. Â
- Keep trees cut back from the house and roof. Clean the roof regularly of any growth.
#9 Inspect your rental home regularly, but don’t be a creeper.
Not monthly or anything weird, twice a year should be sufficient if you have placed well-qualified tenants in your home. Remember that you are not checking their housekeeping so much as you are looking to ensure tenants are maintaining the house in their capacity, complying with the terms of the lease, and so you can plan for repairs and maintenance needs.
#10 If you hire a pro, let them do their job for Pete’s sake!
Consider hiring a property manager, cause at some point, you are going to wish you didn’t have to deal with things that aren’t on this list. An experienced property manager will reduce your liability. Â
I get calls regularly from DIY landlords in distress. Recently, a gentleman called me about hiring our team to manage his home. He was fresh out of court, where he was forced to return his tenant’s entire deposit back, even though she owed him rent and left lots of damage at the home that far exceeded her deposit funds, simply because he did not provide to her a written accounting of the charges to the deposit in the timeframe required by Virginia law. A rookie mistake, but what a bummer! He was still not convinced he needed a to hire a professional property manager, because he was “fine most of the time” he told me.
This guy was still on the fence about “paying” a property manager. He said “I can do most of it myself…” Â
Just for fun, I asked him how he found this tenant in the first place, to see what his application process was. As I mentioned above, it’s the single most important decision you make. As it turned out, he had no formal application. He actually told me that he requested that she let him come over and see her current home so he could “see how she lived.”
The sheer stupidity of that statement blew me away. For one thing, he had clearly not chosen well, so how she kept her current home was irrelevant as. My thought was immediately, “how could you decline someone housing because they failed the “how she lived” test? Yikes! Had he declined her housing, she could have sued him under any number of Fair Housing laws for denying her a home after seeing “how she lived.” Whether housing discrimination had occurred or not, there would be no way for the gentleman to defend himself in court, because that is not a measure of qualifications.
Court awards can be astronomical. It makes the small cost of a full-time professional advisor pale in comparison. As it turns out, he did not hire our services and I like to think that WE dodged a bullet on that guy.
Always, if you have questions, we’ve got answers! Mary K. @ Stephanie Clark Property Management
Tags: Landord Advice, Leasing, Rental Property Management, Single Family Homes