If you’re wondering how to protect your rental property investment in an uncertain scenario like this, this guide is for you.
Real estate offers incredibly lucrative investment opportunities, but that doesn’t mean there aren’t any risks involved. Properties remain under constant threat of water, fire, and mold damage. Theft and vandalism are also common for unoccupied or insecure properties. If you choose to rent out your property, you may come across troublesome tenants who might delay or refuse to pay rent.
Here are some ways to play safely in the real estate sector:
1. Educate Yourself about Fair Housing Laws
First things first: Before you even begin looking for tenants for your rental property, make sure you understand the fair housing laws. From screening applicants to dealing with tenants during the lease term to evicting problematic tenants, you must ensure compliance.
If you don’t treat prospective tenants equally or violate the law in other ways, you may have to face legal actions and end up paying a hefty fine to compensate a party for damages.
One great strategy is to develop a tenant selection policy in writing and hand over a copy to each applicant. Most importantly, do not reject applicants for illegitimate reasons.
2. Get Rental Property Insurance
When you think of property insurance, the first thing that pops up in your mind is homeowners’ insurance. It’s important to know that homeowners’ insurance is designed to secure owner-occupied properties, not rental ones. Search for and choose the right rental property insurance, which is specifically tailored to address the particular risks landlords are faced with. It will offer robust security not only for your property and your financial investment.
3. Run Background Checks
One of the biggest mistakes landlords make is not to determine the credibility of prospects applying for tenancy. Keep in mind that your income will depend on the reliability of the people occupying your property. No matter what the applicant says about their financial health or how attractive their LinkedIn profile is, be sure to run thorough background checks for each and every applicant.
Check their credit score from the Equifax platform and research the company they’re employed in to obtain an idea about how reliable their source of income is. Also, be sure to confirm that they don’t have a criminal history. You can do this by checking running a search for the person on the state’s criminal conviction databases. Also, check country-wide databases to confirm that they have a clean criminal record all over the US.
4. Hire a Property Manager
If you have a busy schedule and/or have multiple rental properties, keeping a watchful eye on your unoccupied properties can be difficult. Hiring a property management company means your property manager will regularly visit your property during day time so that potential burglars know that the owner is active. On top of that, your property manager will take care of routine and emergency maintenance for each of your properties, as well as assist you in each of the points discussed above.
Now that you know how to protect your rental property investment, you’re all set to take risks in real estate. To stay compliant with Fair Housing Laws, find reliable tenants, and enjoy trouble-free tenancy, contact Sensible Home Management. We are here to offer exceptional property management services for all your rental properties.