Owning an investment property can provide you with an extra source of revenue, but it can also come with its share of hassles and headaches. So how do you maximize the former and minimize the latter? Our Tampa HOA management team is here with some tips and tricks!
In Part 1 of this two-part article, we’ll cover prescreening your tenants and minimizing turnover. In Part 2, we will discuss choosing the best insurance, determining the ideal rent price, and enforcing late fees.
Pre-screen Your Tenants
This is definitely a topic when the old saying “a stitch in time saves nine” rings true.
You may be eager to fill your investment property and start seeing those monthly rent checks roll in. But before you surrender the keys to that condo or home, make sure you’re putting them in the right hands.
One of the worst situations a landlord can face is having to evict his or her tenants. An eviction can take a whopping three to six months and cost you over $5,000 (depending on how much rent you lose and whether the tenant inflicts malicious damage on the property).
Even if things never get bad enough for an eviction, having sub-par tenants obviously isn’t a landlord’s first choice either. Tenants who are frequently late on their rent payments, keep the place dirty, and blast loud music may not be bad enough to evict, but they will still cost you more time and money than tenants who pay their rent on time, keep a tidy house, and are respectful of their neighbors.
A solid tenant pre-screening should include:
- A credit check
- A criminal and eviction investigation
Some people even ask for the former landlord’s contact information and/or personal references.
Have you found your perfect tenants? Now it’s your turn to impress them! By providing great customer service and staying on top of maintenance, you can ensure your tenants’ satisfaction.
Sometimes turnover is inevitable, since a given tenant may move to a different city or perhaps transition from renter to homeowner. There is no way of preventing natural turnover; what you want to prevent is losing a great tenant because they had to wait a month to get their toilet fixed.
Even if you’re lucky enough to replace a great tenant with another great tenant, turnover in and of itself costs money. These costs include:
- Advertising the vacant home or apartment
- Replacing or fixing things the previous tenant would have lived with
- The vacancy itself
Having a good tenant is a bit like being in good health: something you take for granted until the situation changes. Make sure your valued tenants have reasons to stick around— and don’t forget to take your vitamins!