7 Tips for Landlords When It's Time to Raise Tenant Rents

One of the inevitable consequences of owning rental income property is that from time to time the landlord finds it necessary to inform tenants that their rent will be getting raised.

The issue is not a slam-dunk. Rent increase is a sensitive subject that greatly impacts real estate owners and tenants alike for their own set of reasons.

The tenant, of course, is not going to be pleased that they will have to pay more to continue occupying the unit. Perhaps they can't afford to pay more. Or maybe it means having to do away with some simple pleasures or other goods and services. Whatever, a rent increase is never what tenants want to hear.

As a result, knowing full well how a rent increase could affect their tenants, property owners are confronted with their own fears and concerns surrounding the financial aspects of the decision.

The primary fear being, of course, that otherwise good tenants might decide to move out and leave the landlord with increased vacancies. Although this might be manageable for properties having many units, an increased vacancy rate for properties consisting of just a few units can be financially devastating to real estate investors.

Fair enough.

Real estate investors, nonetheless, are running an investment business that totally relies upon rental income and sometimes having to raise rents is the only way to make it profitable - or at least profitable enough.

Okay, so let us suggest some things for you to consider when rent increases are in order that might help minimize the risk of driving out your tenants. 

•   Avoid pure greed. If all you want is to produce more money from your investment without rhyme or reason than the other suggestions might not be relative and you may have to simply take your chances.

    

•   Understand your market. If your market area is generally saturated with other rentals than you might suffer a huge turnover of tenants due to a high supply-to-demand ratio. If supply is scarce, than the opposite is true and you might not suffer any turnover.

    

•   Know your property. How do your rental property's location, condition and amenities measure up to other rentals in and around the area? Tenants are less willing to endure the stress and cost of relocating over a nominal rent increase when you provide desirable features compared to other properties.

•   Know your tenants. How does your property's unit size measure up to tenant needs? For instance, your rent increase could motivate an accountant with several assistants occupying your small office space to relocate to a larger space. Or a single occupant in your two-bedroom unit to set off in search of a one-bedroom unit.

    

•   Watch your competition. If similar-type units are available just around the corner for less rent than you're proposing, chances are good that you'll lose tenants. If your rents are reasonably in line, than probably not.

    

•   Be smart. Modest increases given over consistent intervals are more easily understood than irregular ones that surprise and undoubtedly will alienate your tenants.

    

•   Offer a trade off. Perhaps a month-to-month tenant would be willing to sign a lease to get a rent that reflects less of a increase than otherwise proposed. This allows you to bump up your rental income somewhat and at the same time guarantees that you'll have an occupied unit during the term of the lease.

Rule of Thumb

Real estate investors will always run some risk when proposing rent increases because tenant expectations vary, circumstances vary, market conditions vary, and certainly personalities vary. Nonetheless, when the investor does his or her homework and then proposes an increase that has reasonable grounds, chances are good that the fallout will be minimal.

Here's to your real estate investing success. 

Should You Post Your Rental Property Details Online?

Online advertising provides easy access to anyone, anywhere and at any time and this is true for people looking for the best rental properties too. Regardless of whether people are looking for short-term or long-term rentals, chances are that they do not have the time required to look for what they need. In the current busy lifestyle, people are looking for ways that can make the works faster and in an efficient manner. Records say that nowadays more and more people are relying on the internet for finding any information they need and this is applicable to searching for rental properties too. This is why, it is recommended by professional realtors that people having properties and are looking for the right tenants can post the details about their houses on websites providing the facility to post rental property classified ad.

As these websites provide the opportunity to even post the photos, homeowners can be benefited. As the people looking for a house will look at the photos online, they will visit to see the house only when they are impressed by the pictures. This reduces the hassles involved in visiting each and every house and the owners can be benefited as they can show their houses physically only to those, who are impressed with the photos and are showing real interest towards hiring the house. Not only photos, the owners can provide whatever details they wish to post. Like for instance, if they have completely furnished their property, they can provide the details, so that they can expect higher rent.

In addition, most of the websites offering the facility to post rental property classified ad, provide this service free of cost. Once the appropriate local portal is found and listed, the homeowners will begin to get a lot of inquiries as this means of marketing can easily reach the intended audience.

The current trend shows that people searching for rental properties through newspapers is reducing and more and more people are depending on the internet. Also, they will not have to pay any addition cost like purchasing newspaper as they already have an internet connection. This is beneficial for property owners as well as they need not have to pay for posting their ads like in the case of newspapers and magazines. Also, home rental classified ads online will also reach international audience apart from local people.

When the home rental classified ads reaches international audience, people looking for rental houses in another country just because of their job transfer can also be benefited.

How Are Property Inspections Done?

The importance of property inspections is now greatly considered by both a landlord and a tenant. It is to their advantage that the unit is checked before and after occupying it to know the present physical condition of it and to determine what needs to be done.

The landlord or property manager would primarily want a record of the condition of the property for reference later on while the tenant would essentially appreciate the assurance of taking on a unit that is in good condition.

It is important to establish exactly what the state of the property is and identify problem areas if there are any. An inspection is a highly technical undertaking. At times, trouble spots are not easily detected by the naked eye. Also, there are matters that need expert skill and knowledge to be handled.

Professional property inspectors have the training and experience to spot red flags and intentionally seek out potential problems. When it comes to property inspections, landlords are aware that an official report provides the credibility required. It will hold up in any legal proceeding and will provide solid support for pertinent issues that may arise in the future.

There are many aspects involved in property inspections. Most homes comprise different elements and each one bears looking into so that you could be certain that everything is in working order or in suitable condition. The scope of an inspection normally covers the importance ones such as doors and windows, heating and cooling systems, plumbing, walls, floors, electrical systems and pests. In many cases, dealings are dissolved when crucial findings involve the presence of termites, the need for a plumbing overhaul, and the discovery of a faulty wiring system.

These are serious issues that no tenant would want to take on. Landlords would be well-advised to resolve them first before they offer to lease their property out. Meanwhile, cracks, holes, and other minor problems can be dealt with prior to tenant occupancy. At times, some tenants would still be willing to move in with the understanding that they wouldn't be blamed and billed for those problems upon their exit. This can be their assurance.

And so, property inspections are really very important. Property inspections are not only recommended before and after occupancy. It serves both the landlord and the tenant well to get a unit inspected regularly. It gives the owner peace of mind as to the treatment of his property as well as a heads-up in case something needs to be repaired.

Find Property to Rent - 15 Ways for Tenants to Spot a Fake Landlord!

Recent news reports of unscrupulous people taking over someone's home and renting it out to either one or more tenants means that if you are a homeowner, a landlord or a tenant, you need to take precautions to avoid being scammed!

If you are a prospective tenant hunting for a property, then it's vital to follow our top 15 ways to spot a fake landlord BEFORE you hand over any money!

To avoid having to ask these questions altogether, only rent from an ARLA or NALS registered letting agent that is also ideally a member of The Property Ombudsman Scheme. They are responsible for agents that have joined their organisations to abide by strict codes of conduct and this means that they are more likely to ensure a property is let legally, including ensuring the landlord owns the property and has, if required, the lender's permission to rent it.

Avoid a Fake Landlord BEFORE you view a property:-

1. Check where the advert is from. If it's from sites where landlord's can advertise for free, or for less than 50, find out how the website vets the properties and landlords. If they do NO vetting be very cautious!

2. Ask for the landlord's full name and address and ideally a land line phone number. Be suspicious if they don't give these details and only give an email address/mobile.

3. Ask if the landlord is a member of any accreditation schemes eg NLA, RLA and/or a local authority scheme, check they are members.

4. Confirm your appointment with them ideally on the land line number.

5. For a small fee (around 4) check on-line at Land Registry that the landlord does own the property. Download the Title Register details which says who owns the property.

How to SPOT a Fake Landlord when viewing a property:-

6. Ask the landlord if you can see the Energy Performance Certificate. This is a document that tells you how much your utility bills will be (very important!) and is a legal requirement for most rental properties (except properties that aren't let on a 'self contained basis', such as licensed HMOs and renting a room).

7. When looking around the home ask what's happened to the previous tenants and if you can have a reference from them.

8. Ask to see the existing gas and any electrical safety certificates. If the previous tenants have just moved out, then the certificates should still be in date, or if they are just out of date, confirm with the gas/electricity company that they did the work for your landlord.

9. Ask the landlord how much deposit they take, how it will be paid (eg cash/cheque/BACs) and which Tenancy Deposit Scheme it will be held in. It should be held in one of three schemes: My Deposits (custodial and safest scheme); Tenancy Dispute Service or My Deposits.

(These are insurance schemes, so if your landlord/agent goes bust, runs off with the money as long as you have evidence it was paid to them you can get your money back.)

Check on-line that they are a member of the scheme they say they are!

10. Ask for a copy of the contract that you will need to sign on move in day, so you can get it checked beforehand.

If the landlord can't supply all or any of the paperwork mentioned above - DO NOT RENT FROM THEM!

Avoid a Fake Landlord on Check in Day:-

1. Never hand over any cash or wire the money until you have received the keys.

2. Unless you are letting through a high street letting agent that is a member of NALS or ARLA (and the Property Ombudsman), don't hand over your deposit unless you have actually gained access to the property.

3. Make sure the landlord has done a full inventory. This is a document that lists all the things that are in the property and describes the quality of the decor. For example it might say 'stain on the living room carpet, near the fireplace' and ideally this statement would be backed up by a photograph. If there is no inventory, be very wary of renting the property without doing one yourself and taking lots of photos. If you don't when it comes to asking for your deposit back, there might be a dispute as the landlord might take money off for a new carpet in the living room because of a stain that was there before you moved in!

4. If there is no contract to sign and this contract has no mention of a tenancy deposit scheme where your deposit will be protected, do not sign! Check it with a specialist lettings legal company first.

5. Check that the gas and electrical safety certificates are real and up to date.

However much you 'fall in love' with a property, or however desperate you are to rent one, don't cut the corners described above. If you do try to rent too quickly, you might miss that the place is freezing cold, despite having all the radiators on, a fake landlord might put you under pressure to secure the property via a deposit.

Should You Sell, Buy Or Rent Out an Inherited Property?

It is tough when you've lost a loved one and then have to work out what to do with the home they leave behind. Should you sell the property? Buy it yourself? Rent it out for a while or the long term?

To help, the first thing to do is not to rush into a decision. Give yourself a few weeks to adjust to the situation before you do anything - take some time to grieve if you need. The next step is to sort out everything left in the home. Ideally don't strip the place bare as it's easier to sell a property with some furniture in and it's safer too. Depending on how long you are likely to leave the property empty for, make sure you follow our Empty Homes tips

Are you Inheriting the Property with others? The next step is to start to work out what your options are. Of course the property you are inheriting may be shared between other family members. If there is a surviving spouse, for example, you may all decide it's easier if they stay in the home from a familiarity perspective. Alternatively you might decide that it's better the parent sells up and moves closer to you.

Top Tip: Draw up your will! Don't forget that ideally before you officially inherit the property, it's important to have your own will drawn up (and potentially put the property in a trust if you have children of your own) to ensure that if anything happens to you, your wishes are carried out.

Next, it's important to chat to other family members that have inherited the property with you and try and gain a consensus of what to do.

Options on What to do when you have Inherited Property Sometimes it's as easy to buy the property yourself if it's the size you want and in the location that you want to live in. This can be straightforward if you are a lone child and require some tricky negotiations if you have brothers and sisters!

Option One: A Family Member Buys the Property

Ideally you need to get an agreement drawn up between you which includes how the property will be valued and how other siblings will be compensated (if required) for their share of the property. Your legal company should be able to guide you through this process at the same time they are carrying out probate.

Option Two: You Decide to Sell the Property

If you aren't the only sibling selling the property may well be the best option, especially if there is any disagreement on who should own the property or how to move forward. This way everyone can take their share and do what they want with it.

The important thing to do is to decide who's going to manage the sale of the property and agree the minimum that you will all accept. If it helps, even get this in writing between you so no-one can change their mind latter on. If necessary, your legal company will look after the sale, but they will charge you for it.

If for any reason you need a 'quick sale' then you can turn to private buying companies such as:-

ARC Property Group
Quick Move Properties
Move With Us

However, they will a discount of up to 15% off the market value of the property. So if they value your property at £200,000, they will only pay around £170,000. The advantage is that they will be able to do this within a matter of weeks, so it takes the uncertainty out of selling the property.

Alternatively you can prepare the property for sale and then put the property on the market. Make sure however you chose your agent very carefully as you need to be able to trust them to enter and exit an empty property.

Option Three: Keep and Rent out the Property

To rent a property out, you need really to commit to doing this for six months or more. It's important to be aware that renting a property isn't just about finding a tenant, taking deposit and sitting back and banking the rent.

You also need to make sure that you all own the property correctly from a legal perspective, so you MUST discuss this option with your legal company prior to making any decisions.

Over the last five years, that have been major changes to the law and most of these legal changes are in favour of the tenant, not you, the landlord. If you don't abide by these laws, then the tenant in some cases can even sue you for £3,000!

Ideally, if you are renting a property out for the first time, use a letting agent. Make sure this is a letting specialist as opposed to a company that does sales and rentals as many estate agents don't know how to run a lettings business properly.

If you want to manage the tenant on-going, then instead of full management, you can choose a 'Let Only' option where the letting agent finds the tenant and moves them in legally, with an inventory done, and even collect the first month's rent. After that you can manage it. However if you don't want calls at 1am in the morning to say there is a problem with the property - go for full management!

To be sure you are legal from marketing stage, make sure the property has:

1. Energy Performance Certificate

2. Gas Safety Certificate

3. Electrical Safety Certificate OR self certifying that the electrics are safe

Once you have found a tenant, you will need:-

1. An up to date tenancy agreement.

2. To protect deposits in a tenancy deposit scheme.

3. To carry out credit checks on the tenant.

Finally remember that any excess rental income versus allowable costs you receive could be taxable, so you'll need to check this out too!

The Successful Landlord: Analyzing a Rental Application to Choose the Best Renter

While your prospective renter is filling out the application, take a look at their driver's license when they pull it out to write down the number. You want to verify positive identification.

If it's a married couple applying, one application is sufficient. If they are roommates, or relatives, have each person fill out an application so that you can perform independent background checks. Make each person older than 18 sign the lease application.

Review the application while they prospective renter is still there for completeness of information and to identify anything that you might have a question about. The critical information you need is their social security number, birth date, current address with zip code, and permission for a reference and credit check.

You'll need the name and phone number of the current landlord. And it's useful to get the name and phone number of the previous landlord, too. Sometimes a current landlord will give a false-good reference just to get them out of the place! The prior landlord will have no such motivation and will give you an accurate reference.

Make sure that all applicants sign the application. You need this permission to do the background check.

Look for things like more cars than the parking of your home can handle, and so forth.

Do not make any statements that indicate that they can rent the property from you. This is strictly an application. You still have to select the best renter for you.

THE MOST IMPORTANT QUESTION TO ASK

The most important question to ask your prospective renters is, "For what reason are you leaving the home you're in now?"

You'll get lots of answers, some of which are valid, and others will raise a warning flag. I asked one applicant why they were moving. They replied, "We're being evicted."

"Why?"

"Our three-year old kept going to the bathroom out the bedroom window."

INSTANTLY TELL HOW THEY'LL TREAT YOUR PROPERTY

After they've filled out the application, walk them out to the car, and shake their hand as you say good-bye.

Look at their car. You can tell lots about how people will treat your property by how they treat their property.

If their car is well-kept and neat inside, they are very likely to make good renters. If there is trash all over the inside of the car, it's missing hub caps, and so forth, that indicates the condition your house will probably be in when they move out.

Being a Successful Landlord: Three Secrets to Profitably Renting Your House to the Right Tenants

It's not easy being a landlord. You have to get your house ready to rent. You have to advertise to get perspective renters. You have to select the right renters. And then you have to be at their beck and call in the case that they have a problem with the house. And then you have to collect the rent when they're late or evict them when they don't keep their promise to you. What a headache!

Or you can learn the secrets to being successful landlord and put all those headaches behind you. Here are three secrets to successfully renting out your house.

SECRET ONE: SCOPE OUT THE COMPETING PROPERTIES

To find out what you need to do to maximize your success, tour competing properties in your immediate area, acting as if you are prospective renter. You can find out how the other landlords treat their prospects and steal their best methods and make them your own.

Make sure that you pick up copies of their marketing material-that is what they give prospective renters to take away to remind them of what they saw.

Ask for a rental application to see what kind of things they're looking for. Ask if they have a sample lease agreement that you can review. Not every landlord will make this available to you, but it's worth asking for. (Look at my other articles for a free rental lease that you can use as an example.)

If you want to have the complete experience, fill out a rental application and see how you're treated. You can just say that you found some other place or changed your mind if they pick you to rent the house.

If you do this with half a dozen properties, you'll get a great idea of property conditions, rent ranges, and terms and conditions that are common in your area. If you're new landlord, this experience can teach you a lot in very short time.

With this information it will be easy to see if it's worth it for you to rent your home, or if you want to let somebody else manage it, or if you want to put on the market to sell.

SECRET TWO: MAKE YOUR HOUSE VERY DESIRABLE

If your house is just like every other house on the block or like every other apartment in the building, it will be difficult to attract a great renter that will take care of your house and pay the rent on time.

On the other hand, a clearly superior home will attract better renters and allow you to command a higher rent. The kind of people who you want as good tenants will be embarrassed by a dingy and worn-out home. They won't want to bring their friends and family into that environment.

This means you need to invest a little extra in the house to make it look great. With the information you gathered from Secret One, above, you can decide how to put minor upgrades into your home that really stand out from the competition.

I do simple things like upgrade light fixtures, install new flooring and carpeting, replace the kitchen sink, replace the bathroom sink, and replace the drip pans on the stove so it looks fresh and clean.

Consider fresh paint or carefully touch up the walls so everything looks clean and tidy.

I also make sure that the property is absolutely spotless, with clean windows, clean entryway, and professionally cleaned carpets. I also replaced all the light bulbs with maximum wattage bulbs so that the house is as bright as possible. A dark house doesn't show well but a bright house moves fast.

SECRET THREE: SET YOUR RENT AT LEAST 10 PERCENT HIGHER

A slightly higher rent then the competing properties won't scare away the type of renters you're looking for, but will move along the cheap skates that you don't need in your house. And besides, it will be worth it to your renters because your house looks so much better since you've followed Secret Two, above.

To make your higher rent stick, create a marketing page that calls out all the valuable capabilities and features of your home.

Being a Successful Landlord: When You Shouldn't Rent Your Home

In this article, I want you to learn two important things about being a successful landlord: a change in attitude toward you home, and when you SHOULDN'T rent your home.

THE MOST IMPORTANT SECRET TO SUCCESSFULLY RENTING

If you're going to have a worry-free landlord experience, you can't be emotionally attached to your home.

If you're like most homeowners that I know, you're proud of your home. And rightly so. It's the results of your hard work and sweat. You've put your soul into your home.

The sad news is that your renters won't have the same pride or take the same care that you do.
Your home will get scratched and dented. It will deteriorate and you'll see it. When you make an inspection a year later, you'll see the wear and tear that you'd ignore if you were living in the house. Don't let it bother you or you'll go nuts.

Change your viewpoint from that it's your home, to it's their home, and you're collecting money for the privilege of letting them live there and for the wear and tear that's going to happen. Virtually all damage can be repaired, and that's why you collect a damage deposit.

WHEN YOU SHOULDN'T RENT YOUR HOME

There are several situations when I suggest that you not rent your home yourself. Instead consider either selling it or having a property management company deal with renters for you.

* IT'S FARTHER AWAY THAN YOU WANT TO DRIVE

If your rental house is too far away to drive to show it to one person, it's too far away to rent. I think that anything over a half-hour drive is stretching it and asking for headaches. You decide for yourself.

* YOU'RE REAL PICKY ABOUT YOUR PROPERTY

If you are fussy about what people do in your house, you're setting yourself up for an unbelievable nightmare.

So what happens when you find out your renter is rebuilding his motorcycle in the living room? Does this thought drive you nuts? You're better off not being a landlord.

By the way, when you select renters using the methods I'll write about later, this won't happen. And if it does, so what? You'll either clean the carpet or replace it at your renter's expense. No big deal.