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Property Managers

8 Tenant Screening Red Flags for Property Managers

One of the most challenging parts of renting out a property is deciding who to choose as a tenant. We all want tenants who are clean, punctual, and who treat our property like it was their own. But it can be hard to find that person based just on an application and meeting them for a few minutes during the property tour.

Luckily, there are some solid red flags you can look out for that will help you weed out the troublesome tenants. Read on to learn what property managers to look for during the tenant screening process so you get the best renter for your property.

Negative Experiences with a Previous Property Managers

One of the biggest red flags you should look out for when trying to find good tenants is a negative experience with a previous landlord. Of course, there are two sides to every story, and it’s possible your prospective tenant wound up with one of the rare bad apples in terms of propProperty Managererty managers. But it’s much more likely that they were the source of at least some of the trouble and that those problems will continue into your relationship with them. 

Obviously, previous evictions should be a serious mark against any previous tenant unless they can show a good reason why it wasn’t their fault. And while negative landlord references can be a red flag, you should also double-check ultra-positive landlord references. Your potential tenant may have enlisted a friend to pretend to be a previous landlord and write them a glowing letter of recommendation. 

Showing Up with a Crowd in Tow

While most people prefer to bring at least one other person with them apartment hunting, be wary of people who show up with a crowd. If nothing else, this can make it hard for you to figure out who’s actually going to be living in the apartment. But it can also indicate that your potential tenant either isn’t independent or has a potentially troublesome circle of friends or family.

When a potential tenant shows up with a crowd in tow, ask who will actually be signing the lease. This will help you direct questions and discussions toward the actual tenant. You can also start to get a sense for if this potential tenant will have non-renters crashing at their place four or five nights a week or more.

Showing Up Late

As with any interview, showing up late is never a good sign for the quality of your potential tenant. You want a tenant who’s excited to rent your property and eager to prove to you that they’ll be a good renter. And, of course, punctuality will be important when it comes to paying rent and moving out on time.

If your potential tenant shows up late for your appointment, pay close attention to how they react to the situation. If they seem stressed, apologize for their tardiness, and have a good reason (even if it’s relatively vague) for being late, proceed with a cautious, but open, mind. If they seem unbothered by being late, you may want to go ahead and cross this person off your list.

Hard to Communicate With

In many ways, the application, interview, and tour process are a glimpse into what you can expect renting to this tenant to be like. You want to make sure your tenants are easy to reach when questions or problems come up with the property. This will be especially important when the tenant is moving out of your property. 

Pay attention to how easy it is to communicate with your applicants during the screening process. Do they respond to your messages promptly and with reasonable answers? If they take forever to respond or communicating with them gives you a headache, you may want to look for another tenant.

Rushing to Move In 

Another red flag to watch out for is an applicant who seems desperate to move into your property as soon as possible. Of course, they may have a perfectly legitimate reason for moving quickly – maybe they just moved to town for a new job or they’re trying to escape an abusive situation. But it may be an indication that they’re bad tenants skipping out on a previous landlord or similar.

Pay close attention to applicants who are asking to move in within a week or two. Don’t write them off completely, but take stock of the rest of the impression they give off, and look for other red or green flags. If they have a history of evictions, their reference letters are a little too good to be true, and they’re hard to communicate with, put them at the bottom of your list.

Lying on the Application

Of course, lying on the rental application is a major red flag for any tenant, and some lies are easy to spot. We’ve already discussed fake landlord recommendations, but you may run into a few other common lies from applicants. It’s a good idea to start by double-checking their references and listed employer to make sure they’re legitimate.

When the potential applicant shows up for their tour, pay attention to whether they have animal hair on their clothes. If they claimed not to have a pet on their application, ask if they live with a friend or family member who has an animal. If they say no, it could be a sign that they’re lying about other things, too.

Learn More About Tenant Screening

The tenant screening process can be tricky as you try to weed out the bad apples from the good people who are looking for a fresh start. In general, keep an eye out for people who seem dishonest, apathetic, or hard to communicate with. Previous evictions are, of course, a bad sign, and lying on the application doesn’t bode well for the future.

If you’d like to learn more about tenant screening, check out the rest of our site at RentSafe. We are the tenant screening platform that gets vacancies filled faster. Check out our solutions for property managers today and start screening tenants the easy way.

rental property costs

How to Estimate Your Rental Property Costs

As we’ve all witnessed, the real estate market has experienced an unprecedented boom in recent years. In fact, the median home price in 2021 across the United States was approximately $350,000!

Before prices continue to climb even higher, many people are looking to secure a rental property that helps them generate passive income. Many people are unsure of how to accurately estimate rental property costs, though.

Doing so is essential when it comes to getting the highest return on your investment. Let’s take a look at some of the key details you should keep in mind when calculating rental property expenses.

Property Taxes

Tax rates on rental properties can vary greatly from city to city.

In order to estimate your property taxes, you’ll need to know the assessed value of your rental home. You will need to check your local laws and regulations to determine this number. There can also be a large difference between homes located in different states.

This means that those who are looking to purchase a rental property in a different state should not assume that tax rates are similar to their home state.

Property Maintenance and Repairs

Rental homes require regular maintenance just like any other property. In order to budget for repairs, you should anticipate spending 1-2% of the rental’s value each year.

Some of the most common issues include plumbing complications and electrical problems. You may also encounter miscellaneous damages like broken windows. Put simply, you can’t assume that you will never have to pay for maintenance or repairs.

This is true even if you have stellar tenants in your home. Regardless, you should always conduct proper tenant screening to ensure that you get the best tenants possible. This will help minimize the chances of these complications occurring.

Factors to consider when screening tenants include work history, rental history, and whether or not they have a criminal record.

Home Insurance

Your rental property will always need its own home insurance policy.

The cost of this policy will depend on the size and value of your rental, as well as your deductible amount. It’s also worth noting that you will have to purchase private mortgage insurance if you own less than 20% equity in your rental property.

To help put this into context, let’s assume that you purchase a home for $500,000.

A down payment that is 20% of this total amount would be $50,000. If you only put for the down payment of $25,000, you will need to purchase private mortgage insurance. This is simply done to protect the lender from borrowers who may not be able to make their mortgage payments over time.

The good news is that you no longer need private mortgage insurance once you reach 20% equity. This can allow you to generate higher profits in the future.

Management Fees

If you’re not going to be managing the rental property yourself, you’ll need to budget for management fees. These fees will vary depending on the property managers you work with.

More often than not, they are negligible compared to the amount of work you would need to do if you handled your property on your own. Hiring a reputable rental property management company will ensure that you make the most money while minimizing your burden.

This is one of the key elements that you need to consider when looking to accurately estimate expenses for rental properties — be sure you don’t overlook it.

Vacancy Rates and Losses

All rental properties experience vacancies at some point. In order to account for this, you should assume that your rental will be vacant for at least 10% of the year.

This means that you will need to cover all costs during this period, such as your mortgage payment and utility fees.

Ongoing vacancies can quickly eat into your profits. In fact, it’s often a rental property owner’s worst nightmare to have a vacancy that lasts for months. So, it’s in your best interest to do all that you can to minimize them.

As previously mentioned, working with a property manager can help you do so. They achieve this by marketing your property and securing tenants as quickly as possible.

It’s not uncommon for top-tier property management companies to find tenants within a month of a vacancy occurring. In some cases, you might find that you never deal with a vacancy longer than 30 days throughout the entire year.

Keep the 50% Rule in Mind

So, what is the 50% rule? In essence, it’s a helpful guideline to use when estimating rental property costs.

This rule suggests that your annual mortgage and interest payments, as well as insurance and property taxes, should not exceed 50% of your rental income.

In order to estimate your rental’s monthly operating expenses, you’ll need to factor in vacancy rates, repairs, management fees, and utilities. Once you have all of these numbers, add them up and divide by 12 to get your monthly estimate.

Having a rental property with expenses that exceed 50% of your income often isn’t worth the investment. Even if minor contingencies arise, you might find yourself barely breaking even. So, it’s in your best interest to minimize expenses as much as possible.

Estimating Accurate Rental Property Costs Is Essential

By following these tips, you can ensure that you’re calculating rental property costs accurately and making the most prudent financial decisions for your investment. From here, you will be able to maximize your returns and minimize your risks.

Want to learn more about what we have to offer? Feel free to get in touch with us at Rent Safe today and see how we can help with your tenant screening needs.

Is hiring property managers worth the cost?

Hiring Property Managers: Cost-Benefit Analysis & Breakdown

For those who are looking to increase their wealth, owning real estate, and renting out your properties, is one of the best ways to do so. However, it’s often impractical for people to manage their own rental units.

Obligations related to your job, family, and social life often get in the way, so the need to hire outside help often arises. But, are property managers worth hiring to run your rental property? Let’s take a look at what you should know about the costs you can expect hiring a property management firm.

Setup Fees

Under most circumstances, property managers will charge their clients a setup fee. This allows them to cover the costs involved with getting your property ready for rent.

These often include initial inspections, welcome materials for your tenants, and the labor associated with setting up your account with the property management company. You should be wary of property management companies that charge exorbitant setup fees. In general, this expense shouldn’t be more than a few hundred dollars.

If you find that a property manager attempts to charge you well over this amount, they are highly likely a predatory company that you should avoid at all costs. 

When searching for one to work with, you should consider the past reviews the property management company has. This will provide insight into the type and quality of service that you can expect from them.

Management Fees

The ongoing management fees property managers charge will vary depending on the size and scope of your property.

Generally, they’ll take a percentage of your rent revenue in exchange for managing everything from finding tenants to handling monthly bookkeeping. This fee will vary depending on who you work with, making it imperative that you take the time to screen multiple property management companies.

Finding the right company can save you a great deal of money in the long run, and you can then reinvest this money into your property to make it more valuable.

Marketing and Advertising Fees

As you might guess, you won’t get very far when it comes to renting out your property if you don’t let people know that this space is available. In order to find the best tenants for your property, many property managers will charge a marketing and advertising fee.

This covers all of the costs associated with putting your property on websites, in print publications, and even sending mailers out to potential renters. This could also involve hiring a real estate agent. Many rental property management firms also leverage online advertising to help find tenants as quickly as possible.

This also goes a long way toward minimizing (or even eliminating) vacancies. Again, this expense can vary widely depending on the company you work with, making it important that you compare rates before making a decision.

budgeting for leasing fees

Leasing Fees

Renting out your property is not as easy as simply showing it to prospective tenants. You need to ensure that their information (including credit scores, proof of income, rental history, and employment status) checks out before you have them sign an agreement. If a tenant decides to break his or her lease early for any reason, you’ll need to find someone else who’s willing to take over the space immediately.

This process will often involve advertising fees once again along with the administrative costs associated with re-renting your property quickly. Vacancies can cause a large number of additional headaches, and they often lead to significant losses for property owners.

Having the capability to minimize tenant churn rate is something that simply cannot be overlooked.

Maintenance Costs

In addition to the fees mentioned above, you can also expect to pay for things like repairs and maintenance.

Many property managers have preferred vendors they work with when it comes to these services. It’s important that you ask your property manager about this before anything goes wrong with your property. Otherwise, you could be on the hook for a hefty repair bill.

This is a situation you want to avoid, as home repairs are often notably expensive. This is particularly true involving issues related to wiring or plumbing.

Property maintenance is a necessary component that comes with owning rental property. However, hiring a property manager can take some of this burden off your shoulders.

Eviction Charges

One of the last situations you want to be able to address as a property owner is evicting a problem tenant. It can be a stressful and expensive process under most circumstances.

In some instances, you may be required to evict a tenant who doesn’t pay his or her rent. If this happens, your property manager will handle the labor associated with the eviction.

This is a key part of their service, as this obligation can be complex and potentially overwhelming for those who attempt to manage their own properties. 

In many cases, your property manager will also be responsible for finding a new tenant to take over the space. This is something that is handled under advertising and leasing costs, though, so you likely won’t encounter unexpected expenses.

So, Are Property Managers Worth It?

Under the vast majority of circumstances, yes.

Property managers will allow you to simultaneously alleviate stress and handle your property more efficiently. This, in turn, can lead to increased profits and a more relaxed lifestyle. Make sure you compare rates before making your choice. It will likely be one of the best decisions that you make as a property owner.

Want to learn more about what we have to offer? Feel free to get in touch with RentSafe today and see how we can help.

Property Management 101

Property Management 101: Tips and Tricks for Success

The property management industry alone amasses a whopping $88.4 billion each year. If you want to contribute to this overall revenue, it’s essential you learn some valuable tips to improve your property management skills.

Whether you’re a first-time landlord or an experienced property owner, it’s important to understand all the basics of property management. From tenant selection and maintenance to marketing and record keeping, there are many components that make up successful property management. Here are some tips and tricks to help you get started on the right foot. Educating yourself is the first step to becoming the best property manager you want to be.

Read on for these must-know tricks to increase your success.

Goals as a Landlord

Before doing anything else, it’s important to determine your goals as a landlord. Do you want to focus on long-term tenants or short-term rentals? Are you looking for a steady stream of income or a one-time rental payment? Answering these questions early on can help you set realistic expectations and develop a plan that works for you. 

Have a Deep Understanding of the Law

Once you have your goals in place, start by understanding your legal obligations as a property manager. You’ll need to familiarize yourself with local zoning laws, Fair Housing laws, landlord/tenant regulations, tax requirements, safety codes, etc. Make sure all your paperwork is in order and keep accurate records of any agreements made with tenants or contractors. 

Being ignorant of the law is not an excuse when any laws are breached. As a property manager, you need to have a deep understanding of the laws in your area.

This is to ensure you, landlords, and tenants are aware of the guidelines everyone must remain within.

There are several laws that cover everything you will handle as a landlord. This includes maintenance repairs and the methods you use to resolve issues with your properties.

From time to time, you need to refresh yourself on any new changes that will affect tenancy contracts or the process of eviction.

If you outsource certain parts of your property, such as maintenance, to an outside contractor, take the extra steps to check for licensing. Without the proper licensing and insurance, if a mistake is made, you will face the consequences as the property manager.

It’s because it’s your job to screen everyone before hiring them to perform any type of job at your property sites.

Selecting & Screening Your Tenants

Next comes tenant selection – arguably the most important aspect of any successful rental property management strategy. Screening applicants is key; look for renters who have good credit scores, no criminal background checks, sufficient earnings capacity (i.e., at least three times the monthly rent), verifiable references from past landlords/employers, etc. A clear lease agreement should also be established outlining rules regarding issues such as late payments or pet policies before signing anyone on as a tenant. 

Evicting a tenant from your property can cost on average $10,000. This is precisely why you need to take the time to screen tenants and find the right ones to lease each property.

Finding the right tenant will help to set you up for success, because it means you won’t have to deal with issues like:

  • Unpaid rent
  • Property damage

Before you approve a person to move into your property, take time to check their previous renter history thoroughly. When you screen a potential tenant, you’ll find information on their standings with previous landlords.

This includes any missing or late payments and any other concerning disputes between themselves and the landlord.

You should also require the potential tenant to provide a deposit you can use to conduct a thorough background screening. Your screening process should also assess the tenant’s credit history.

After all, if the tenant isn’t able to pay their rent, you don’t want to rent your property to them because it will leave you without a source of income.

property management tip

Be Ready For Repairs

When it comes to maintaining the rental unit itself, having reliable contractors that can serve as 24/7 emergency repairs is essential. You’ll also need to manage regular upkeep tasks such as mowing lawns and cleaning gutters; develop a schedule that works best for both tenants and yourself so everyone knows what should be done when and how often it needs to be completed. Not only will this ensure your investment is well protected but also helps build trust between tenants and yourself which makes it easier if any problems arise down the line. 

Rental Property Marketing

Marketing your rental units effectively so they attract quality tenants quickly is essential. There are plenty of ways to do this such as placing ads online (like Craigslist), creating flyers or postcards targeting potential renters in nearby neighborhoods, joining local real estate groups/forums online – just be sure whatever method(s) you choose fit within your budget constraints while still reaching out far enough into the public sphere so people know about available vacancies in their area! Additionally take good photos of each unit showing off its best features – this will make them more appealing visually too! 

Be Personable

As you market your properties and work with potential landlords, you must be personable yet professional. The last thing people looking for a place to rent want to deal with is someone who doesn’t know how to provide quality customer service.

Whenever you contact someone concerning your rental property, be confident in the information you’re sharing. And always show respect to the person you’re speaking to.

If you’ve hired a landlord, be a good boss and determine their needs before having them.

If they have issues with the screening software needed to fill the properties, upgrade your current package. Or find one that makes the overall screening process more manageable.

If tenants have issues with the property because things are breaking, ensure you take the necessary steps to upgrade each property.

In the long run, doing these things will help you remain successful and keep people occupying your properties year-round.

Know Your Stuff

Real property management means doing more than sitting behind a desk and answering the phones. You’ve got to be willing to get your hands dirty and jump in to help whenever it’s needed.

Take some time to learn different trades in areas such as maintenance or sales. This way, you can monitor your assets and spot when someone’s trying to take advantage of you.

Becoming a jack of all trades will also help you reduce some costs because you can jump in and complete tasks rather than calling someone to do it for you.

Set the Policies & Stick to Them

If you change your policy for one tenant or property employee, you’ll have to make the change for everyone. Before you begin onboarding people and accepting property tenants, create policies and procedures you expect to follow and abide by.

For example, if a tenant has something in their apartment break, they need to know the process of submitting a maintenance request and the timeframe it will take to have their message answered. With a procedure like this in place, it reduces the number of calls to the office, which can deter the repairs from being completed in a timely manner.

You should also have routines for things like paying rent. Instead of speaking with each tenant to collect their rent payments, find ways to streamline the process.

For example, you can provide an online payment system for tenants to submit their rent and set up an account to send notifications before rent is due.

As the commercial property management provider, this is another way to foster the relationships between yourself and the tenants.

Property Management 101: Setting Property Management Companies Up for Success

When you work in property management, it’s crucial that everything you do helps to improve your property standings. With the tips and tricks we’ve provided, you’ll increase your occupancy rate by taking the time to understand the property laws in your area and find the right tenants.

Speaking of finding the right tenants, do you have a screening process yet? There’s no need to worry, contact RentSafe and let us help you find the right tenant every time.

How to calculate rent fees for your property

How Much to Charge for Rent? Let’s Calculate

It’s no secret that real estate markets across the entire country have dramatically increased in value over the past two years. This means that property owners who are looking to rent out their buildings to tenants can make more money than ever before.

However, you’ll need to know how much to charge for rent in order to make the most of this opportunity. Let’s explore some of the key factors that you should consider while moving forward.

Look at Properties in the Nearby Area

For those who need guidance on setting rental rates, checking out similar properties in the nearby area is one of the best ways to start.

More often than not, other property owners will have already conducted the necessary amount of research to charge the appropriate amount in rent. This will make it much easier for you to appeal to someone who is renting a room in your city. It’s also worth considering that property in your area may be worth a higher or lower amount compared to the greater surrounding market.

Without the proper research, you could end up charging far more or far less than you should.

Consider the Quality of the Property

You can’t expect to charge a large amount in rent if your property has numerous issues that you have yet to resolve. 

For example, let’s assume that you are looking to rent out a house that is located near a busy downtown district but there are issues with the home’s HVAC system and plumbing. It wouldn’t be practical to show the house to potential tenants and then list your rent at the upper end of the local market’s range.

This also applies to any other type of issue the homemade has, such as structural damage. Instead, it’s in your best interest to make the necessary repairs before you list the home as being available for rent.

This will go a long way in terms of helping you get the most passive income out of this endeavor.

Take Seasonality Into Account

Certain regions of the country will have varying rental rates depending on the season.

For instance, property owners in Florida typically charge more in rent during the colder months of the year. This is directly due to Florida’s tropical climate, making it a state where many Northerners look to escape to during winter. The inverse is true for property up north.

During the warmer months of the year, people from the South might choose to relocate to places like New Hampshire, Michigan, Virginia, etc., making rent in these regions more expensive during summer.

When taking seasonality into account, you should also understand that you might need to adjust the rates as the year goes on. Although you may have been able to charge a premium for your Florida beach home during winter, this rate might not be competitive during summer. Keeping this information in mind can help minimize vacancies.

You May Need to Adjust the 1% Rule

For those who are unaware, there is a saying within the real estate industry that you should charge 1% of the value of your home in rent each month. So, if a home is worth $400,000, you should charge your tenants $4000 per month. However, this might not always be the ideal number depending on other factors.

As previously mentioned, property damage could deter tenants from paying the maximum accepted rental price in your region. You may also discover that your local market is growing in popularity. As a result, tenants may be willing to pay significantly more than 1% of your home’s total value in rental payments each month.

So, don’t accept the 1% rule is something that cannot be modified.

take apartment amenities into account when calculating rental rates

Amenities Also Have an Impact

On paper, two homes may sound fairly identical based on data like square footage, the number of bedrooms/bathrooms, etc.

However, amenities can go a long way when it comes to affecting what you charge for rent. Some of the key attributes to consider include parking spaces, security, local attractions, and walkability. To elaborate on this last point, people often prioritize homes that are located within walking distance of parks, pools, restaurants, and public transportation.

In terms of structural amenities, a home with a built-in theater will likely be worth much more to tenants than a home that simply has a spare bedroom for guests.

Don't Be Afraid to Go With the Flow of the Market

Some landlords are hesitant to increase the rent as time goes on. Although rent is adjusted each year to help account for inflation, you might need to raise your rates higher than normal.

If your local market is continuing to grow in popularity or development, what would normally be a 2% increase could end up being an 8% increase. When increasing rent, though, it’s essential that you provide your tenants with plenty of notice.

You should also convey this occurrence to them as respectfully as possible.

Knowing How Much to Charge For Rent Can Seem Complicated at First

The good news is that it is not nearly as complex as most people believe. When you know how much to charge for rent, you can make sure that you establish a fair rate while still maximizing your income.

This can mean the difference between whether or not you reach your financial goals. Want to learn more about what we have to offer? Contact RentSafe today to discuss your tenant screening process needs.

7 tips to help self-manage your property

7 Tips to Help Self Manage Your Property

Investing in real estate is one of the most efficient ways to exponentially grow your finances. In fact, people often purchase property solely to take advantage of this opportunity.

A great way to generate passive income is to rent your property out to tenants. However, self management as a landlord isn’t always straightforward.

Let’s explore the strategies you can use to make handling your rental properties easier in the future.

1. Familiarize Yourself With the Role

As you might expect, it’s in your best interest to research this role as much as you can. Interestingly, many people choose to invest in rental properties without fully understanding what a landlord is responsible for.

The good news is that it won’t take long for you to get up to speed. If you happen to know anyone in the industry, it’s recommended that you reach out to them for landlord advice. Even a simple conversation can go a long way when you are first getting started as your own property manager.

2. Establish Clear Channels For Communication

One of the most important landlord tips to keep in mind is the fact that you need to be able to clearly communicate with your tenants. However, they should also feel like they are able to easily communicate with you.

For example, let’s assume that a landlord is not very personable and doesn’t go out of the way to provide their tenants with contact information. If an issue arises within the home, the tenant may not know how to get in touch with their landlord. Similarly, they may feel compelled to resolve it on their own even though it’s an obligation that the landlord should handle.

In general, it’s best to provide multiple ways for your tenants to contact you in order to instill a positive and lasting landlord-tenant relationship.

catering to tenant service tickets and needs

3. Don't Neglect Tenant Needs

There will inevitably be times where your tenant needs your help. One of the most common scenarios involves home maintenance, such as if an HVAC system begins to exhibit issues.

One of the worst things that you can do as a landlord is put these issues on the back burner. Although you have other obligations in your life and may even own multiple properties, there is no excuse for not being proactive. Failure to do so could earn you a poor reputation as a landlord and make it harder to find tenants in the future.

Additionally, you may encounter legal issues if you do not take the appropriate action within a reasonable amount of time.

4. Always Perform Background Checks

It is your duty to keep the community around your home safe.

If you rent to someone who is liable to cause property damage, assault/intimidate others, etc., you could be setting yourself up for consequences in the future.

Instead, it’s essential that you run a company that has a background check on every potential tenant that you encounter. This includes checking criteria like credit history, criminal history, and past rental history. All of these factors are important to consider.

Although a tenant may have stellar credit and have no criminal record, you could be at risk if they have had multiple evictions in the past.

5. Avoid Vacancies at All Costs

When a home is vacant, you are responsible for paying all of the ongoing costs.

Between your mortgage and utilities, extended vacancies can quickly add up to be thousand dollars. So, you’ll want to have a plan to minimize the number of vacancies that you experience.

In the event that your tenant has chosen not to renew their lease, you should begin taking action to advertise the property. For this reason, it’s common for landlords to require written notice ahead of time from a tenant that they are planning to leave. This will allow you to make the necessary arrangements.

Increase rent annually

6. Increase Your Rent Annually

Some landlords are very accommodating, which is not a negative attribute. However, this sometimes means that they do not wish to increase rental rates each year.

Unfortunately, forgoing this opportunity will actually cause you to lose money due to inflation. Marginally increasing your rental rates each year will ensure that you protect yourself financially. Of course, you should not be predatory when you choose to increase rent for your tenants.

Additionally, you should let them know ahead of time that you plan to do so rather than surprise them with a new bill.

7. Enforce the Rules That You Set

When you lay down rules as a landlord, it’s imperative that you enforce them. It’s not uncommon for landlords to accommodate tenants that do not have the best interests in mind.

To clarify, let’s assume that a tenant is consistently late with their rental payments. A landlord who does not hold the tenant accountable will likely experience financial hardship. Allowing this behavior to continue will only convey that it is acceptable.

Enforcing rules does not mean that you have to be unreasonable, though. Use your best judgment when deciding whether or not to take action against your tenant in a specific scenario.

Self Management as a Landlord Can Seem Difficult

Under many circumstances, though, it will be much easier than you expect. Be sure that you keep this in mind when moving forward so that you can take advantage of all the opportunities that self management brings.

Want to learn more about what we have to offer? Contact RentSafe today to see how we can help make your role easier.

long distance landlords

7 Property Management Tips for Long-Distance Landlords

Property management can be incredibly rewarding. At the same time, it can also pose its own set of challenges. This is especially the case if you’re acting as a long-distance landlord.

It can be difficult to stay on top of issues when you’re managing a property that isn’t in your direct locale. However, with proper planning, you can make it work. 

Today, we’re sharing seven long-distance property management tips that can help you succeed.

1. Partner With Local Vendors

When you don’t live nearby, you may not be able to run over at a moment’s notice to fix your tenant’s pipes or take care of their yard work. However, that doesn’t mean that these chores don’t need to be done. 

Long-distance landlords can’t work alone. Rather, you’ll need a qualified team of trusted vendors by your side. This may include plumbers, HVAC technicians, and electricians, as well as other service providers, such as:

  • Cleaning crews
  • Painters
  • Roof repair specialists
  • Landscapers
  • Attorneys and accountants (for legal and administrative matters)

Take the time to research these local experts, using reviews and recommendations to guide your search. If it’s feasible, then travel to meet them in person. Otherwise, schedule phone interviews so you can explain your situation and the types of services that you might need.

choose the right tenants

2. Choose the Right Tenants

When you’re renting out a long-distance property, you need to be confident that your renters will take great care of it. Before allowing just anyone to live in the space, take the time to thoroughly vet them, first.

Our online tenant screening platform makes this step easier than ever. With our software, you can share customized application links with all of your prospective renters. Once they apply online, you’ll get the results in real-time, with their responses displayed on a user-friendly dashboard. 

This way, you can easily identify the renters who meet your qualifications, as well as the ones who don’t. This can help you avoid unwelcome surprises down the road, and give you peace of mind when you’re far away.

3. Consider Automated Rental Collection

If you live in the same city or county as your tenants, then you may be able to schedule times to collect their monthly rent in person. However, this convenience isn’t exactly available when you live in a long-distance location. 

While you can arrange mailed payments, those may not always arrive at the same time. Plus, there are additional risks involved with sending checks through the mail

Some property management software features automated rent collection tools that allow you to simplify this process and make it more secure. With these tools, tenants can pay their rent via credit card or debit card, and you’ll receive the funds in your account. You can also track their payments in real-time, so you always know when to expect them.

4. Enlist Local Eyes

You need someone to keep an eye on your property when you can’t be there to check it yourself. This might mean enlisting a neighbor or someone you know to simply survey it every once in a while and inform you about potential issues, such as vandalism.

This is especially the case if the property you own is part of a larger, shared dwelling. For instance, you might own an apartment or condo that’s part of a bigger building, and any issues that occur will affect more than your immediate tenants. 

Left unchecked, bad renters could drive someone to report your unit to the board of directors in charge of the property. In turn, this could put your space in jeopardy. If you want to continue to rent it out in the future, then you’ll need someone who can keep you updated on minor issues so they don’t snowball into bigger ones.

set clear lease terms

5. Set Clear Lease Terms

Your tenants might (incorrectly) think that because you don’t live nearby, you won’t be as strict about your lease terms. Again, this goes back to accepting the right tenants in the first place. Responsible renters won’t try to take advantage of the situation by bending the rules in their favor.

Still, it’s critical to be crystal clear about what you will allow at your property, as well as anything that’s off-limits. For instance, you might have a strict no-smoking policy or a one-pet limit. Regardless of your specific regulations, make them transparent and obvious in your lease agreement and require tenant signatures before proceeding.

6. Obtain Proper Insurance

Before you rent out a long-distance property, familiarize yourself with the type of insurance that you’ll need. In many cases, a standard homeowner’s insurance policy doesn’t extend to any renters that use your space. This means that if they cause any type of property damage, then you could still be held liable. 

Most insurance companies will offer policies designed specifically for landlords. Depending on the type of coverage you want, this can include provisions to protect your property against:

  • Flooding
  • Thefts
  • Fire
  • Equipment failures

You can also ask your insurance agent about liability insurance or security deposit insurance, which can protect you in the event that someone experiences a personal injury while on your rental property.

7. Visit the Property When Possible

It may not be feasible or economical to visit your property every weekend. However, it’s important to carve out some time to check out the space yourself. At the very least, try to make the trip at least one time per year.

If the costs to do so seem prohibitive, then keep in mind that you can write most of your travel expenses off on your taxes, as they will be considered part of your rental business. If this step still seems too far out of reach, then consider hiring a property manager who can oversee your rental for you.

While this service will come with a cost, it can save you a ton of stress down the road. If you don’t live near your property and can’t visit it, then sometimes third-party property management is the most viable solution.

Apply These Long Distance Property Management Tips

Long-distance landlords can have the best of all worlds. You’re making money from your rental property, but you’re also able to enjoy your own personal space. 

With these property management tips, you can stay on top of your rental and address any issues before they occur. By securing local surveillance, setting clear terms, and levering the right technology, you’ll create a firm foundation for success.

Interested in learning more about how our software can connect you with the best tenants? Contact RentSafe today to discuss your screening process needs.

how to maximize tenant retention using tenant screening software

A Guide To Maximize Tenant Retention

Is tenant turnover a problem your property is facing? If so, welcome to the club; you’re not the only landlord with this problem, but you’ve taken a huge first step in seeking help to persuade tenants to renew a lease.

We’re going to offer you some landlord tips that will improve your tenant retention rates starting today!

Why Does Tenant Retention Matter?

If you’re looking to improve your bottom line as a landlord, one of the main ways to do this is to retain tenants. By securing lease renewals, you can save money used for marketing materials to get tenants into your building and improve your overall budget.

Marketing isn’t the only reason that tenant retention matters. It also matters because the cost of tenant turnovers is considerably high and will only continue to climb in the years to come.

Improving your tenant retention will ensure you make the most of the limited time you have. Instead of spending an excess of time showing your properties or screening new tenants, you’ll dedicate time to other business tasks that need to be completed.

Keep this in mind when a tenant is happy; it increases the chances of them continuing to call your property their home. With this information, it’s time to check out some tips that will help you improve your tenant retention rates.

screen your tenants

Screen Your Tenants

Screening your tenants is an essential part of tenant retention. If you stop to think about it, tenant retention is at the bottom of the list when it comes to the issues you’ll run into with your tenants.

When you screen tenants, you’ll receive critical information about tenant:

  • Criminal history
  • Proof of income
  • Past landlord references

It’s essential to screen your tenants to ensure you make a note of red flags in the tenant’s past. This reduces the chances of dealing with tenants that will cause damages to your property or are late paying their rent each month.

Ensure you have questions ready to ask as you check their references. Speaking with the tenant’s references will give you considerable insight into whether this tenant is the right tenant for your property.

Put Customer Service First

58% of consumers state they will change companies purely based on customer service interactions with staff members. It doesn’t matter how great your property is if you don’t put customer service first.

Your staff should be trained on the proper way to provide customer service to tenants. Examples of excellent customer service include:

  • Providing helpful information when tenants call the property office
  • Attending to maintenance requests promptly
  • Offer an easy screening process for potential tenants

It would be best if you used every interaction with your tenants as a way to improve upon your initial impression. A little customer service goes a long way and enhances the tenant experience.

Offering quality customer service will also ensure that you continue to create and nurture the relationships you’ve made within your community.

Offer an Incentive

Everyone loves an incentive and the same goes for tenants you want to live in your properties. When leases come to an end, it’s an important time for property management because it’s the time when tenants decide whether or not to renew their lease.

There are several types of incentives you could consider, including offering rent discounts. As you market this incentive, you’ll let tenants know that for a limited time, only they’re able to renew their lease and receive a lower rental price or a type of discount for renewing.

Another incentive you can focus on when marketing to tenants is the amenities your property has. By doing this, you’ll pique people’s interest to come and check out the rest of the property.

Stay Consistent With Your Rental Prices

Tenants don’t like it when their rent increases without warning each year. If you want to ensure they continue to live on your property, it’s essential to keep your rental rates consistent.

Understandably, you’re focused on increasing your profit, but constantly increasing the rent for tenants is an overly aggressive way to do this. We recommend you take time to research the area you live in and make a note of the rental prices in other areas.

This will ensure you’re not increasing your rates too frequently and are staying just under your competitors, attracting more tenants to your property. As you continue to monitor the market prices in the area, you should also think about the upgrades other properties are making.

The last thing you want is your property amenities to be outdated and more expensive than newer properties in the area.

Provide Surveys for tenants

Provide Tenants With Exit Surveys

If there’s something wrong with the way you’re managing your properties, how will you know if you don’t conduct an exit survey? Your survey should have several questions that will help you get to the bottom of why tenants aren’t renewing their leases.

Is there anything you and your staff could’ve done differently to retain the tenant? Was the tenant satisfied with the property they were living in?

Equipped with these questions, you can ensure you make the necessary changes to retain future tenants.

Ways to Get Tenants to Renew a Lease

There are several ways to get a tenant to renew a lease, including offering incentives and ensuring you always provide the best customer service possible. The thing you need to remember is that tenant retention begins with the screening process.

If you’re looking for a way to streamline the screening process, contact us here at RentSafe. We want to help you find the right tenants for your properties every time!

Corner of a black calculator and notebooks next to black paper with white writing saying “Proof of Funds,” illustrating this guide to getting renters’ proof of income.

What Landlords Should Know About Getting Proof of Income (Even for Self-Employed Applicants)

There is a lot to enjoy about being a landlord, with perks such as extra income, tax deductions, and being your own boss. It’s also one of the few careers where it’s OK to ask how much money someone makes. It’s a prerequisite, in fact.

Verifying income information is one of the many jobs of a landlord, although not usually one of the top five favorites. It can be tedious and cumbersome, but it’s necessary to ensure the applicants can pay the rent each month and avoid the time-consuming and expensive eviction process.

Pay stubs are the easiest and most reliable way to verify an applicant’s income, but they aren’t always options. Many people work as independent contractors or freelancers and don’t have pay stubs to prove their income.  This guide will explain proof of income, how a landlord can verify it, and ways to spot a fake.

Proof of Income, Explained

Several documents can serve as proof of income by detailing where, when, and how an applicant makes their money. The most common type is a paycheck stub, but there are numerous others. 
It’s a general practice to require more than one document to ensure validity. A potential tenant should make roughly three times their rent as a general rule of thumb. Proof of income can come in many forms, including:
  • Pay stubs
  • W2
  • Bank statements
  • 1099 Form
  • Profit and Loss Statement (Schedule C)
  • Social Security benefits statement
  • Letter from an employer
  • Tax returns
  • Court-ordered agreement
Many landlords consider bonuses, holiday pay, overtime pay, and seasonal pay when verifying income for a potential tenant, but it isn’t always advisable. They should only consider base income, and they should only include inconsistent earnings such as overtime when the applicant is on the cusp of qualification.

Documents to Check for Income Verification

The methods a landlord uses to verify income depend upon their needs and preferences. Some may find it fits their management style best to manually check each document, while others may find a tenant screening service more applicable.
Manually checking proof of income requires calling banks, previous landlords, employers, and government agencies to personally verify each claim, as well as assessing each document for validity. Tenant screening services take care of all the legwork and provide the landlord with the required information.
Some landlords combine techniques, putting in their own efforts along with a screening service. Here’s what you need to know about these common types of proof of income:

W-2 Tax Form

A W-2 tax form provides information about the applicant’s income from the previous year. It’s a good indicator of what the person could accomplish financially – last year. Many people change jobs every year or a few times a year, so using a W-2 alone won’t give a landlord a complete picture of the applicant’s current financial status.
w2 form
Many people who use a W-2 as proof of income are freelancers, gig or contract workers, or entrepreneurs who may have enough income to rent but don’t have pay stubs from an employer to prove it. A W-2 form used in conjunction with other tax documents, such as 1099s and tax returns, can better depict a person’s financial capabilities.

1099 Tax Forms

Income from a source other than employment, such as interest, dividends, and government payments, are reported with a 1099 form. This IRS form shows landlords how and when an applicant receives income.

Tax Returns

A tax return is a form for taxpayers to list their annual income and personal circumstances. The IRS uses this form to assess the taxpayer’s liability for taxation. Some people receive money back from the government at the end of a tax year, but others owe money.

Bank Statements

Bank statements are typically released once a month and contain a summary of a person’s financial transactions during the previous month. Landlords can see how potential tenants use their money by gauging the deposits, withdrawals, and other listed transactions.

Income Statements

Income statements serve the same purpose as pay stubs, except they aren’t from an employer. Income statements are from wherever the person is receiving their income, such as:
  • Workers Compensation
  • Unemployment
  • Social Security
  • Disability
  • Trust funds
An income statement can effectively verify a steady income from anywhere a potential tenant receives it.

Landlords must verify every document for authenticity to ensure the tenant is suitable for the property. Tenant screening services verify these types of documents for landlords and property managers. 

Landlords who have only one rental property might choose to do the work themselves. One of the biggest concerns of manual verification, though, is spotting fakes.

How to Spot Fraudulent Documents

Potential tenants who don’t have what it takes to obtain a rental might submit forged and fraudulent documents to qualify for a lease. Verifying a tenant’s income is also an efficient way to weed out counterfeit documents and unscrupulous tenants before it’s too late. Here are a few tips to help spot the fakes.

1. Require a Form 4506

Require all applicants to sign a Form 4506 along with their application to streamline the process. Form 4506 is a request for a transcript of someone’s federal income tax documents from the IRS. Official transcripts are received directly from the IRS and have an official seal, making them difficult to replicate fraudulently.

2. Research the Applicant’s Business

Do your research. Find the business name on their application and search online for the company or business that the applicant claims to be affiliated with. There’s a good chance the income documents are fake if there’s no registered business.

3. Calculate Ongoing Balances

Proof of income documents such as bank statements and pay stubs have an ongoing total. Spot a fake by calculating the total deposits and payments. Fake documents typically have incorrect ongoing balances and totaled sums.

Counterfeit documents are not difficult to spot in most instances. The trick is to stay vigilant and remember to double-check every document.

Rent Safe Can Help Make Tenant Screening Easy

Don’t let the tedious parts of landlord life get you down. Ready to eliminate the risk of low-quality tenants? Want to protect your properties and your bottom line? Then you need to check out Rent Safe. Our digital platform helps renters easy-submit their applications for rentals, and landlords can streamline the steps it takes to screen potential tenants.

Rent Safe lets you easily create a tenant application and screening process. Your applicants can add co-signers, share references, upload documents, and more, and the customized dashboard provides convenient access to all the information you need. To learn more, contact us today. 

A criminal background check form sits with a pen on a wooden surface, ready for the rental applicant to fill out.

A Landlord’s Guide to Using Criminal Background Checks

Landlords need to proceed cautiously when they’re reviewing applicants with criminal histories. A criminal record does not necessarily indicate someone won’t be a responsible tenant, but you need to be sure to make choices that protect your property, other tenants, and the surrounding community.

This issue can be complicated, and you need to strike the right balance between not being discriminatory and not putting yourself, others, or your property at risk. This guide helps you decide what to do if a criminal background check indicates that an applicant has a criminal history.

What to Consider When Assessing the Results of a Criminal Background Check

A criminal background check can show an applicant’s felonies, misdemeanors, history of incarceration, and pending criminal cases, and if you find out that a prospective tenant has a criminal background, you should consider the following when deciding whether to rent to them.

Convictions

Make sure that you only consider convictions for crimes, which means the applicant was found guilty in a court of law. An arrest, on the other hand, does not prove that they committed a crime.

Nature of the Crime

You should consider the type of crime when deciding how to approach the results of their criminal background check. An applicant guilty of murder or sexual assault, of course, is guilty of a crime much more severe than something like shoplifting.

Risk for the Property

Think about any potential risk to the property that the potential applicant may pose. Writing a bad check may not seem like a serious crime compared to violent assault, for example, but you probably don’t want to rent to someone with a history of financial crimes. A record of arson or vandalism may also signify a threat to your property.

Risk for Other Tenants

Consider potential risks to your tenants or neighbors as well. A rental applicant with a history of violent crimes may pose a danger to others, especially if the crimes were perpetrated on strangers.

Time of the Offense

People can change, and you don’t necessarily want to hold someone responsible for their past mistakes if they’ve already paid their debt to society and rehabilitated themselves. Consider the timing of the offense. You probably don’t have to worry about a crime that happened a decade ago from someone who doesn’t exhibit a history of that behavior.

You have the right to choose your tenants, but you need to ensure that you don’t accidentally discriminate against people with criminal records. The Department of Housing and Urban Development (HUD) bans landlords from having blanket bans against people with criminal histories, and it requires landlords to assess each applicant on a case-by-case basis.

How to Deal With Applicants With Criminal Histories

a criminal rental applicant that is handcuffed

It’s wise to balance a strong sense of fairness against your desire to protect your property and your tenants. You should keep the following elements in mind as you create policies and review rental applications:

Reasonable Protections Are Not Discriminatory

You cannot have a policy to never rent to anyone with a criminal record, but you can implement reasonable policies to protect yourself and your property. Not renting to someone who recently committed a violent crime, for instance, is an example of a reasonable decision.

Local and State Laws Vary

Consider consulting with a lawyer well versed in housing laws to ensure your policies align with state and local laws. These laws often go beyond the requirements outlined in federal housing laws like the Fair Housing Act.

You Need to Have Consistent Policies

Try to be as consistent as possible when dealing with applicants who have criminal histories. You put yourself at risk of facing a discrimination charge if you refuse to rent to multiple applicants who have drug distribution charges but then accept a renter guilty of the same crime, especially if that applicant is of a different race. A history of consistency can be essential if you’re trying to make a case against a discrimination charge.

You May Be Liable for Your Tenants’ Safety

Landlords who knowingly rent to someone who poses a significant risk to their tenants may be found liable if the renter hurts one of their tenants. You need to find a way to minimize your liability risk while also ensuring you don’t act in a discriminatory manner.

Being a landlord often requires you to balance several different elements, and this balancing act comes into play when you’re deciding how to deal with a prospective tenant with a criminal background. The right screening tools, and the advice of a lawyer, can be essential.

Mistakes to Avoid When Renting to Tenants With Criminal Histories

A former criminal may prove to be the best tenant you’ve ever had, or renting to them could be a mistake you’ll regret. The stakes are high, and you should be careful about avoiding these common mistakes:

  • Don’t ban everyone with a criminal record
  • Don’t forget to do a criminal background check
  • Don’t assume that local anti-discrimination laws are the same as federal laws

Making the right decision can be challenging, but the process is always easier if you know as much as possible about your tenants. Don’t go into the situation in the dark — always make sure you perform adequate background checks on your client.

Contact Rent Safe to Improve Your Applicant Review Process

Reviewing rental applications can be challenging, whether the applicants have criminal histories or not. You need to know as much about your prospective tenants as possible to be an effective landlord.

Rent Safe facilitates this process by allowing you to easily do credit checks, criminal background checks, and more on prospective tenants. Contact us at Rent Safe today to learn more about how our platform can help improve your rental property business.

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