Archive for September, 2012

Meeting for the first time. A landlord tenant perspective.

Be Cautious about That First Meeting

Meeting with a prospective tenant is exciting, but it can also be very overwhelming. Not only do you have to review their referrals, credit history and past rental history, but you have to interview them to ensure they are a good fit for your property. Even a seemingly perfect tenant can turn into a nightmare situation, which is why it is important to exercise an amount of caution when meeting a prospective tenant for the first time.

Pets

A tenant may say they do not have a pet, but in reality they could have a cat, bird or other small animal they plan on sneaking into the new apartment. You can verify their no-pet status by contacting past landlords and inquiring about the condition of the property when the tenant left as well as if there were any complaints in regards to smells or noises that came from in-house pets.

How They Speak of their Current Landlord

Tenant and landlord suits are a common occurrence in civil court. Often tenants feel violated or are unhappy with their property and take it out on their landlord. Therefore, when you meet with a prospective tenant ask them why they are moving and their thoughts about a current landlord. If they have had multiple rentals in the past, ask them why they left and again, their feelings toward their landlords. Tenants who are overly negative can be difficult and you might just find yourself facing a lawsuit over a simple issue from a testy tenant if you go ahead and rent to them.

As a landlord, you have a little leeway when it comes to picking and choosing your tenants. Therefore, do your due diligence and exercise a little caution during that initial meeting and make sure the tenant you choose is the right fit for you and your property.

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On-Site Inspection

What is an On-Site Inspection and Why Should I Use a Service?

 

As a small landlord, using the right tenant screening service can be the difference between having a quality tenant and a not so responsible tenant. Unfortunately, the Federal Trade Commission has made it difficult for small landlords to obtain the credit and background information needed to determine whether or not a prospective tenant is a quality one. In order to comply with consumer privacy laws and guidelines, landlords must conduct on-site inspections before they can access consumer credit reports.

 

Benefits of Using an On-Site Inspection Service

Small landlords do not have the time or the funds to deal with typical registration processes. By using an on-site inspection service, small landlords can skip the hassles associated with registration since the private service will act as a screening agent for credit reporting agencies.

 

A private service will assess the credit worthiness of the potential tenant for the small landlord by looking at:

 

  • Current FICO scores
  • Payment history
  • Past rental history
  • Income
  • Current credit reports

 

From there, the private service will inform the small landlord of their decision on credit worthiness, but without disclosing the consumer’s actual credit report. Therefore, the small landlord can skip the hurdles associated with conducting a credit check on their own.

 

On-site inspections are time-consuming for small landlords, especially those with multiple properties to manage. Since small landlords typically have outside jobs or family to consider, having the inspections completely taken care of on their behalf can save them valuable money and time and unnecessary stress.

How the Housing Market Affects Your Rentals

The housing market impacts homeowners, but how does it impact you and your rental properties? Unfortunately, there is not a clean cut answer simply because the impact on your properties depends on how the housing market is doing.

 

Sellers’ Market: When Housing Prices are Up

When housing prices are up, sellers have the advantage. They can get the most money for their property – if it sells. During this time, there are many people who want houses, but most of them do not have the credit or ability to buy a house at its prime rate. Therefore, these parties turn to rentals. This means you will have more individuals interested in your property and thus less worry about your properties sitting vacant. This also means that you will be able to increase the market rent on your property to get a higher rate, which is a good return for you.

 

Buyer’s Market: When Housing Prices are Down

When the market turns in the opposite direction and housing prices go down, more buyers enter the market and take advantage of the low prices. That means you will have less interested tenants and, in some cases, tenants putting in their notices in order to move out and into a purchased home. Unfortunately, if you have to rent any vacant properties during this time, your market rent will be considerably lower than it is during a Seller’s Market phase.

 

The housing market may not impact you in the same way it does those buying/selling, but it impacts your tenant availability, rental rates and overall profits. Therefore, just like any homeowner, you need to be conscious of how the market is doing and prepare for how it will affect you.