After buying an investment property, you'll have to make a certain set of decisions. Among these is whether you will manage the property yourself or hire a property management company.
For newbies in the landlording world, property management is simple math. According to them, all you’d need to do is subtract the expenses from the rental income to obtain profit.
While that sum is generally true, there is a smorgasbord of certain complexities that you’ll need to consider first. That’s why, for some landlords, hiring a reliable and professional property management company makes financial sense.
In today’s blog, we’ll provide you with all the knowledge you need to make a sound decision for your rental investment.
What Responsibilities Do Landlords Have?
While anyone can own an investment property, not everyone can become a landlord. Landlording isn’t as simple as just finding a renter and collecting rent every month.
As a landlord, you have a bevy of legal responsibilities that you must fulfill. It’s important you take these responsibilities seriously as ignorance isn’t a legal defense. Certain mistakes can seriously impact both your bottom line and reputation.
The following are the common landlord responsibilities:
Rental Maintenance
Regular maintenance is key in multiple ways. For one, you are able to protect your investment’s value. Two, you’re able to keep a tenant feeling comfortable, which can help with multiple lease renewals. Three, you’re able to ensure you’re abiding by local health and safety codes.
Generally speaking, rental maintenance involves the following responsibilities:
- Inspecting the roof, gutters, and downspouts.
- Checking if smoke and carbon monoxide detectors are working.
- Responding to tenant repair requests.
- Checking the plumbing and electrical systems.
- Maintaining common areas, such as stairwells, hallways, and laundry rooms.
Filling Vacancies
Your property will fall vacant at some point; it’s inevitable. Even when you’re just starting out as a landlord, this will be among the first things you’ll need to do.
With rental vacancies, time is of the essence! You’ll need to market the property quickly to get a replacement tenant as quickly as possible. The following are some of the things you’ll need to do in this regard:
- Make your home rent-ready. This may include making any necessary repairs and renos.
- Draft a rental ad that highlights all the important aspects of your property.
- Distribute the ad to as many relevant platforms as possible for maximum reach.
- Conduct a property showing and pre-screen prospective tenants.
Screening Tenants
After you’re through with the marketing process, you’ll need to move to the next step and screen prospective tenants. This, however, will only be possible if the marketing process was successful in generating leads.
Generally, the bigger the prospective tenant pool, the higher the chances of finding a great tenant.
When it comes to tenant screening, the following are some of the things you’ll need to do:
- Require prospective tenants to fill out a rental application form.
- Conduct a thorough background check. Including, assessing their financial well-being, criminal status, and creditworthiness.
- Verify the applicant’s employment status. This may include calling the applicant’s employer and asking them to confirm their employment status and income level.
- Check the applicant’s rental background. This can include calling their prior landlords to inquire whether the tenant adhered to their responsibilities.
Collecting Rent
Collecting rent should be easy, right? All the tenant has to do is mail the check when it becomes due every month. Unfortunately, it’s not always easy. This is especially true if you didn’t conduct a meticulous screening process.
If the check doesn’t show up when it should, what should you do? You’ll have to spend valuable time doing the follow-ups.
The back and forth can prove to be a serious time-sink for you. Eventually, you may have to proceed with a tenant eviction, which can be another time-consuming and costly process.
Enforcing the Lease
As a landlord, it’s your responsibility to draft a solid lease agreement and enforce it. It should be in writing for clarity and documentation purposes. When it comes to rental agreements, the last thing you want are roadside handshake deals.
An effective lease is one that is clear and detailed (yet concise). It should be able to highlight all rights and responsibilities each party has in the lease. Including:
- Dollar amount of rent.
- Where and when rent is paid.
- When rent is due.
- Amount of security deposit.
- Repair and maintenance responsibilities for each party.
- Landlord entry rules.
When it comes to enforcement, it’ll be your responsibility to ensure fairness.
Other Duties
The list of responsibilities for landlords doesn’t end there. You’ll also have to do the following as well:
- Ensure you abide by all legal obligations. Including, warranty of habitability, security deposit rules, and fair housing laws.
- Inspect the vacant unit from time to time.
- Pay property taxes, insurance, and other operational costs.
- Handle tenant evictions in line with applicable laws.
Is Hiring a Property Management Company Worth It?
Absolutely! Property management is a profession just like all others. A good property manager will have mastered everything that entails landlording to the best of their ability.
As a landlord, you can count on them to handle everything on your behalf. From marketing a vacant unit, collecting rent, evicting a difficult tenant, and maintaining the unit, among other things.
Conclusion
Should you hire a property manager or self-manage your investment property? If you are already skilled with the information in this blog, great! Go for it by all means, especially if you have the time.
If not, then consider hiring a reliable property manager to do it on your behalf. Evolve Nevada is more than ready to take this journey with you. Our full-service property management services can provide you with peace of mind and exceptional ROI. Get in touch today!
