10 Ways to Keep Your Rentals Profitable
by Kevin and Monica Ray
Editor’s Note: This article comes to us from property management experts in Missoula, Montana. Please note that state landlord-tenant laws differ, so please see an attorney in your area for specific legal questions.
Do you own investment rental properties?
If so, here are some tips to help you keep your rental property profitable:
1. Make Sure Your Rents Reflect the Current Market Value of the Property: Do your research – you may need to increase your rents to reflect current market value. No one likes to raise rent but even a small annual increase will help you maintain the property. It will also benefit you when you sell the property since rental income is a factor buyers will look at when valuing your property.
2. Be Familiar With Fair Housing Laws: Violations of fair housing laws can be costly so stay informed about what is required of a landlord. Information on Montana fair housing is available at www.montanafairhousing.org.
3. Give Your Tenants Proper Notice BEFORE Entering: You are required to give a 24-hour notice to rental tenants in Montana prior to entering, unless there is an emergency.
4. Require an Annual Property Inspection: If you require an annual property inspection in your lease and conduct one, you will be able to identify potential problems prior to a tenant moving out such as pets, safety issues or fire hazards. An annual inspection is also a good time to change the batteries on your smoke alarms and to clean the dryer vent to the exterior of the property if applicable.
5. Properly Screen All Potential Applicants: A detailed application and screening process will save you many headaches in the end. We require a credit check, criminal background, income verification and reference check. We charge the applicant $35 to pay for the checks.
6. Keep Your Rental Property in Good Repair: Don’t defer maintenance on your rental property, it will decrease the value and also make it more difficult for you to get and keep good renters.
7. Perform a Detailed Move-In & Move-Out Checklist with Tenants: We use a detailed move-in and move-out checklist with our tenants that lists any existing issues with the property such as a small hole in the carpet, stains, etc. We also photograph the property carefully prior to move in. The tenant signs the move-in checklist so there is no question about damage when they move out.
8. Keep a Written Lease that lines out the resolution to any potential problems: We use a very detailed lease that specifically lines out the Tenant’s responsibilities and the Landlord’s Responsibilities and how any issues will be resolved. This keeps everyone on the same page and also assists you with enforcing the requirements.
9. Enforce Your Late Rent Policies: Line out late fees clearly in the lease and then enforce them. Once you waive late fees you are setting a new standard and expectation from your tenant and it is hard to go back. Submit your 3-day notices as soon as possible.
10. Handle Tenant Deposits Properly: In Montana, you must return a renter’s security deposit within 10 days if there are no deductions and within 30 days if there are deductions. Document all charges and prepare to justify your deductions if necessary.
Kevin and Monica Ray are Missoula Real Estate sales and marketing professionals for Access Realty and also own a Property Management Company – Accord Property Management, in beautiful Western Montana.
American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.org.
See our feature, Avoid this Devastating Move-In Mistake.
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