The best way to operate your rental property: Before you e..

The best way to operate your rental property:

Before you even buy a property you must learn how to rent it. Because this is really the key to being successful in rental property

Number 1: RENT TO THE RIGHT PERSON

So many things to avoid feeling sorry people tenants, believe in them. When you rent a property to someone your letting this person in your life. Some will try to pay you a years advance and make that experience bad, you don’t need that.

You need an application for them to fill out and get a copy of their drivers license, to make sure the information on the drivers license matches the application. You can sign up with a tenant screening company they’ll pay the cost of screening them. This is to verify the information they’re providing is correct. If they say they work somewhere you call that employer up and verify they really work there or get a paystub to make sure. Just make sure they got the money to pay you your rent.

You definitely want to run credit, if they don’t care about their own credit they will be somewhat a risk for your investment. For their income you want to make sure they make 2.5 times the minimum. For instance if your rent is $1,000 you need to make sure they’re making $2,500 - $3,000 a month. This is the most important that they can ACTUALLY afford the property, also that they haven’t been evicted before, they’re working, and also do a criminal background check.


Number 2: Security Deposit

This is a security deposit of money the landlord ensure that rent will be paid and other responsibilities of the lease performed. You can get the first month the last month and a security deposit. So if they tear the place up, they don’t pay the rent you need that money to protect yourself and you need a good lease too. Again screen your tenants because these people are now a part of your life. Find strong independent people that are going to pay you your rent take care of the property and not give you no headaches. You need to be able to depend on this person not only to pay the rent on time but also to keep your home in good condition

Number 3: Short Term

Everyone situation is different. Some might want to rent the property for 6 months. If your property is really easy to rent, you can be picky who you choose to rent to. Renting a property on a short-term basis, for most owners, is intended to OFFSET the mortgage costs or other costs of ownership. Even if you are ‘cash flow’ break-even or ‘cash flow’ positive you may deduct depreciation “EXPENSE” that can put you in a loss position for income taxes.

Number 4: Rent to Own

You can rent it out for people to then sell it. You put it on the market but it ain’t selling. You lease it to somebody, and a portion of that lease payment goes towards the down payment on purchasing the house.

Number 5: Maintenance

Depending on the terms of the contract, you may be responsible for maintaining the property and paying for repairs. You can only charge the tenant for damage. If it’s normal wear and tear you can’t charge the tenant. Anything they damage like the wall, carpet, the floor basically anything you need to replace or clean you can charge the tenant. If they have pets you can also charge a pet fee.

Number 6: Emergency

Make sure whenever you rent to somebody you have emergency contact. Things happen everyday so you need to know if something happens to this person. If they get sick, go to the hospital or die. You need to make sure that you have people that you could go to if there’s a problem with your tenant.

Number 7: Tenant Protection

To the tenant that you’re renting too it’ll be ideal that they should get renters insurance. If there’s an accident that happens there, they have their own insurance to collect. It’s better for them to collect from insurance than collect from you.

These are some important tips that you should definitely take into consideration because when you move someone in a property you own, you’re responsible of the property. You want everything to go a smooth as possible while you have your tenant living at your place so you can be able to have cash flow and passive income that will help you keep growing in life.

Remember reach out to a real estate attorney and accountants to make sure you are abiding by tax laws. Renting out a home can be beneficial for both owners and tenants you just have to make sure you are getting cash flow from this investment!