Renting for success
Earn recurring income from your property.
HOW MUCH SHOULD YOU CHARGE PER MONTH?
FINDING A PROPERTY MANAGER
DETERMINING MONTHLY RENT
If you're buying an investment property, you should know beforehand whether you plan to flip or rent it. You should also have calculated how much you plan to charge for rent when calculating how much you can spend on your investment. Your potential for recurring income should be a factor in whether you choose a certain property.
LOOK AT COMPS
Check the rental prices for similar properties in your neighborhood. You want to be competitive with other landlords and offer reasonable rates that local tenants will expect.
Setting your rent too high will limit your tenant selection. You want to be able to select your tenants to find out who will be a good resident and stay in your property long-term. Turnover is expensive and gives you a bad name as a landlord. Like in any other industry, it is much easier and cheaper to keep a customer than to find new ones.
ADVERTISING YOUR PROPERTY
Social media networks are becoming an increasingly influential means of disseminating information. Share your vacancies on Facebook and Twitter, and monitor and join conversations amongst those seeking apartments.
Professional signage in front of the property catches the eye of local residents who may be looking to move. Aesthetics are important. Pay a professional to make a rider outside of the property with your contact information. A sloppy, handmade sign may give the impression of a cheap landlord who won't even spring a couple bucks for a decent sign.
LISTING WEB SITES
Craig's List offers free listings for apartments and is an extremely popular tool amongst potential renters. You may also want to post your listings on sites like rentals.com. However, in our experience at Jason Cohen Pittsburgh, usually Craig's List is all you need. Be specific in your listing — include photos, floor plans, rental cost, and any rules like pets or tenant limits that may filter out many potential residents.
SCREENING POTENTIAL RESIDENTS
You have to make sure that a potential tenant is able to afford the apartment. At Jason Cohen Pittsburgh, we often require a tenant to take home at least three times the rental amount per month to qualify. Credit checks are the easiest way to assure that a resident can afford the unit, and that they don't have a spotty financial history that may call into question their likelihood to pay rent on time. There are several cost-effective credit check services online for landlords, like Equifax and Experian.
If your potential resident passes the credit check and can afford the property, you want to make sure that his or her character is desirable. Ask for previous landlords as references and call them to get a good understanding of whether you want this applicant as a resident. An ideal tenant is proactive and will tell you if something is wrong in the property, but not the high-maintenance type that will panic over everything. Responsible tenants pay rent on time, which is desirable because odds are you're using the rent to pay off your mortgage. Eviction is expensive and takes substantial work — it's better to have good tenants.
Always collect a security deposit. If you allow pets in your property, collect an additional pet deposit. These provide extra insurance against damage. At Jason Cohen Pittsburgh, we generally collect the security deposit (the cost of a month's rent) and the first month's rental payment prior to the tenant's move-in date.
If you need help writing a lease, don't worry, the Internet is filled with templates and samples that you can work from. The important aspect of writing the lease is thoroughness. The lease is a legal document, so it should be air-tight with no clauses subject to interpretation. If you're having trouble, consult a lawyer. It's better to be overly cautious when crafting a binding agreement.
Late rent policy
Move-in and move-out dates
Expected responsibilities of the resident (taking out trash, etc)
Items that are not covered (utilities, cable, Internet, water — you may choose to have these included in the rent or separate)
Security deposit policy
Maximum duration of guest stay
Limit of occupants
PROPERTY MANAGER OR GO IT ALONE?
Depending on how much time you can devote tor your property and how many properties you own, you may want to look into hiring a property manager. If you only own one property with a couple of residents, you could probably handle it yourself. However, if you plan on expanding to more units, a property manager can be a huge asset. This will let you focus on finding your next investment while someone else handles day-to-day operations.
At Jason Cohen Pittsburgh, we've had tremendous success with our hired property management companies — we simply could not keep our properties up to our standards without them. If you're going to hire a property manager, make sure you know exactly what you're looking for, and that the company can do its job.
If you are only planning on owning one or two rental properties as a passive source of income (like for retirement savings), you could likely manage the properties by yourself. If you choose to go this route, make sure that you have solid contacts for any potential repairs that may be needed. Knowing local plumbers and handymen is essential if you are acting as your own property manager.