How to Manage a Rental Property

It’s easier than you may realize to manage a rental property. Many people believe that they need to be a trained professional, real estate expert,  etc. in order to properly manage a rental. Luckily, that’s not true! However, it does take time, energy, and attention to detail.

What are a Landlord’s Responsibilities? 

The benefits of becoming a landlord can make it worth all the effort. However, it is important to note that there is a significant amount of effort involved. It’s important to understand some of the landlord responsibilities that you can expect to deal with if you want to manage a rental property.

Finding a Good Tenant

You will need to find a tenant for the property. There is a stark difference between a good tenant and a bad tenant. There are plenty of bad tenants that don’t pay rent on time, damage the rental property, won’t leave the rental, bother neighbors (if any), discreetly sublet the property, dishonor the lease, etc. The list goes on and on! That is why it is important to find a good tenant that pays their rent, doesn’t bother the neighbors, communicates, and respects the property.

Finding Applicants

There are plenty of ways to find a good tenant. You just need to know where to start looking! The first place will be with online listings. You will want to upload property details about the rental on a variety of rental platforms. Once you have uploaded your rental property online, you can begin calling local real estate agents. You can make them aware that you are going to set up an open house date. They can keep this in mind when assisting their clients find a place to live. If there is currently a resident in the rental property then you will need to figure out a date that works for them to schedule the open house. It is still their home.

Screening for a Good Tenant

A proper screening process is an important step in finding a good tenant. Platforms like Zillow Rental Manager make it easy to screen tenants for landlords. When your tenant submits their rental application, you will need to comply with any and all fair housing laws. These laws prohibit discrimination based on age, sex, nationality, color, race, family status, etc. Once you receive the application, you will need to run a background check to look at the applicant’s rental and criminal history. There will also need to be a credit check. These factors can indicate if the applicant is responsible in handling a rental property.

Finalizing the Process

Once you screened your applicants and picked a good tenant, it is time to finalize the process. You will need to sign a lease agreement with your tenant. You are in charge of creating your lease. That is why it must be reviewed by a legal advisor to ensure that it is a proper rental agreement. Once you have the final version of the lease agreement, you will need to go over it with your tenant. Your tenant will then review, sign, and date the lease. It is important to give your tenant a copy of the lease, while you keep the original stored securely.

Know When to Notify Your Tenant

There are plenty of rules around properly managing a tenant. However, one key component is knowing when to notify the tenant. You will need to have a proper notice to the tenant if you ever need to enter the property, start the eviction process, or give notice to renters insurance deadlines. Some states have their own specifications about the minimum amount of time required for these types of tenant notifications. Check with local law to ensure you do what is within your rights as a landlord.

Proper Management of the Tenant

Properly taking care of a tenant is important. It requires a decent amount of time and energy to ensure basic tenant management. Some of these obligations include:

  • Being easily accessible to the tenant(s)
  • Responding quickly to repair requests
  • Providing rent reminders upon request
  • Ensuring the Condition of Your Rental Property

Being Easily Accessible to Tenants

It is important to have a clear and open line of communication with your tenants. If there are questions about the lease, the property, or any minor issues then a good response time is attractive to tenants. You want to try to keep all communications written so that there can be proof of inquiries, statements, requests, etc. However, it is important to be accessible over the phone as well.

Responding Quickly to Repair Requests

While it is your obligation to handle repair requests, it’s especially important to do so in a timely manner. Fixing issues when they are manageable repairs is much easier than holding off until they are a full-scale repair with extensive damage. These small fixes could prevent these problems down the line and save money in the long run.

Providing Rent Reminders Upon Request

Some tenants are very good at functioning by themselves with no reminders. Other tenants appreciate a monthly reminder for rent and request that the person managing the property gives notice. You can ask the tenant whether or not they would benefit from a reminder. You can send these reminders using a platform like Zillow Rental Manager or by yourself either manually or through automated emails.

Ensuring the Condition of Your Rental Property

It is extremely important to make sure the rental property is kept in good condition. It is also good to provide safety reminders. For example, if you are located in Florida, you can send a safety notice to the tenant about good practices during hurricane season.

Make Sure Your Property is in Good Condition

It is your responsibility as a landlord to provide a safe, and liveable home for your tenant. That means you need to make sure:

  • Smoke and carbon monoxide detectors work
  • Hot water is available at the property
  • Safety equipment is available in the property
  • Locks have been updated since the last tenant
  • There are no insects like roaches or bed bugs at the property
  • There are no rodents like mice at the property
  • No mold is detectable at the property

There are plenty of benefits of up to date property management. When you regularly maintain the property you:

  • Increase or stabilize the value of the property
  • Reduce the rate of tenant turnover
  • Reduce the amount of emergency repairs
  • Improve the life of fixtures, flooring, and appliances

It’s also important to have the property inspected once a year to ensure it is up to code. Some regular maintenance that you can expect to handle on a month by month basis can be:

  • Pest detection
  • Smoke and carbon monoxide detector checks
  • Safety equipment confirmation

Some seasonal regular maintenance can include:

  • Water damage inspection (after rainy season)
  • Roof inspection (after seasons of heavy snow, hail, and/or rain)
  • Gutter cleaning (after autumn)
  • Tree trimming

Some annual routine maintenance can include:

  • Shower caulking
  • Tile grout inspection
  • Air filter changes
  • Flushing the water heater

It is Important to Handle Emergency Repairs

The level of urgency is based on the type of repair. Sometimes a repair will need to be handled immediately. Some examples of these emergency repairs are:

  • Electrical issues
  • A broken furnace or heater
  • Gas leaks
  • Water leaks
  • Clogged drains

Some repairs are too much to handle on your own and require the help of a professional. If you hire a professional, it is very important to monitor them while they are fixing the property. It doesn’t matter the type of professional either. Whether they are a contractor, vendor, electrician, plumber, maintenance worker, inspector, etc. they should be supervised while conducting the job.

Rental Accounting 

This is one of the most important pieces of properly managing a rental property. The reason that this is so important is because accounting handles all of the financial details. The first piece of rental accounting is collecting rent.

Collecting Rent 

You have a variety of options when it comes to collecting rent. However, the easiest way to manage this process is to keep it all online. Your tenants would likely prefer that as well. In fact, 79% of tenants prefer to pay rent online. Rent collection also includes potential penalties for late payments or rent increases if applicable. Not only do you have to collect rent, but it is important to manage security deposits.

Manage Security Deposits

If you collect a security deposit, this must be properly recorded. In order to best manage a your security deposit you can:

  • Secure the funds that you receive in a safe spot while the tenant is completing their lease term.
  • Make sure you are aware and compliant of state security deposit rules and regulations.
  • Store the security deposit documentation in a safe area.
  • Take into consideration any pet damage that you may need to deal with.

Tax Season

It is extremely important that you file your taxes correctly when dealing with your rental property. That is why it may be beneficial to actually hire an accountant. There are a lot of expenses and income to consider so it can be difficult to handle on your own. It can help to have organized bookkeeping of your rental documents to best prepare for the upcoming tax season.

Proper Bookkeeping of Your Rental

There are both tenant responsibilities and personal responsibilities. It is important that you properly keep track of records for your rental as a personal responsibility. You need to store documents in a safe and secure location. It can benefit you to plan for the worse and have backups saved in another location or digitally. Proper bookkeeping can act as a security blanket to avoid liabilities and facilitate tax season. You should keep track of any and all rental documents. Some of these documents include:

Proof of Property and Landlord Insurance

Want to protect your rental property and financial assets from unexpected incidents like a liability claim, fire, severe weather, etc.? Then make sure to have proof of property and landlord insurance (as well as your normal homeowners insurance). These documents can protect the home from:

  • Types of damage caused by the tenants to the property
  • Legal costs associated with the rental property
  • Medical expenses in cases of an accident on the property
  • Loss of rental income in certain circumstances

Rental Applications

There actually may be local state laws that you must abide by in regards to the rental applications. Regardless of the legality, it’s still important to keep track of. A good rule of thumb is to keep a copy of any and all applications from at least the past four years. These documents can help during discrimination lawsuits, and tenant emergency (if you need to get in touch with an emergency contact). Since it is recommended to keep a copy of the applications, it may benefit to have only online applications. They are easier to file and print if needed.

Rental Lease Agreements

This is one of the most important pieces of documentation to properly bookkeep. The reason this documentation is important is because they are what hold both you and the tenant accountable. This means that during dispute settlements, these can be a key piece of information. They offer:

  • Protection as the landlord
  • Clarity on the rules of the property that must be followed by the renter and landlord
  • Protection as the tenant
  • Assistance in eviction proceedings

Any Rent Receipts

Local laws may require rental managers to provide a rent receipt upon request. Again, regardless of legality, it is still recommended to keep rent receipts because they show proof of payment, improve the rental property bookkeeping process, and can reduce the amount of payment disputes.

Rental Walkthrough Checklists (and Responses)

During both move in and move out, the property should have an inspection with the landlord and the tenant. Any issues should be documented during these walkthroughs. It’s also important to document the responses to any issues. For example if during move-in, there is a broken window noticed by the tenant, then the issue, the repair that you responded with, and the confirmed updated status should be documented.

A proper walkthrough should include a thorough inspection of each area of the home. Documentation should include notes on what needs to be repaired, painted, or cleaned. Once the checklist is completed with the responses documented as well, both the landlord and the tenant should sign off.