Buying a rental property seems like an easy way to make some extra cash; just sit back and let the checks roll in, right?
While it is a great investment, it is not quite as simple as some would like to think. That hasn’t stopped many people, though. Purchasing an investment property is a trend that is currently booming.
The percentage of homes purchased in recent years that are intended by the owner to be used as a rental property is way up, helped in part by television shows that have capitalized on the trend. Viewers see an opportunity, and they want to get a piece of it.
As a landlord, there are many times when it is unwise to take shortcuts. When it comes to running background checks on potential tenants, insuring your property, and using a detailed lease, you shouldn’t cut any corners. These can be expensive mistakes.
However, there is one place where you can definitely take a shortcut – you can rely on the advice of experienced landlords who have already learned their lessons the hard way.
Learning from Others’ Mistakes
“Some landlords have learned the hard way that you should never accept a version of a credit report that has been provided to you by the applicant/potential renter. “
Always insist on running the credit report personally or through your management company. Otherwise, the applicant can doctor the report to make it look like they have a stellar credit rating when they actually don’t.
We know one such landlord who made this mistake, only for the applicant’s deposit check to bounce. By the time he discovered the situation, the tenant had already damaged his rental property.
Between rental fees, repairs to the unit, and legal fees for eviction proceedings, this mistake ended up costing the landlord over $20,000.
The lesson is simple: always run your own background and credit check. You can charge applicants a fee to cover the cost of the screening, so it doesn’t cost you anything.
You should also carefully research any information that is provided to you by a seller when you are considering purchasing a rental property.
Don’t rely on the seller’s statements in terms of expenses related to the property. Find out for yourself exactly what expenses you will incur, including taxes, insurance, utilities, lawn care service, and garbage pickup.
Ask for Landlord References
“Most rental applications ask for references, but there are two major problems with this.“
The first problem is that just about anyone can find someone who will give them a good reference, regardless of whether the reference has any knowledge of the applicant’s rental habits or even whether the information they are providing is true.
The second problem is that landlords fail to actually call the references and follow up on them. The solution to this problem is to require the applicant to provide landlord references. This way, you can call their previous landlords and find out whether they paid their rent on time and kept the property in good condition.
Ask for at least two landlord references. The applicant’s current landlord may be less than completely honest if he is desperate to get rid of that renter, so call the previous landlord, too.
If you own a rental property or are considering purchasing one, Get in touch with McMath Realty.
We offer a variety of services to assist you in maintaining your property, including investment consulting,property management,rental management,property inspections, and home maintenance services.
We manage rental properties in Chandler, Mesa, Gilbert, Scottsdale, Phoenix, Glendale, and all areas of Maricopa County.
We advertise your property in the MLS listing, on multiple websites, and on our own website. We also use signage to attract potential renters who are out driving around and looking for rental opportunities. We will assess your property, recommend improvements, and help you price your unit appropriately.
Contact McMath Realty at https://mcmathrealty.com//contact.php to learn more about how we can help you keep your rental property in great shape and handle daily maintenance!