As a new year rolls around, it may be time to adapt your leasing policies to the most profit-friendly rental property management strategies.
Here’s a look at what is likely to be trending in 2014:
1. Smoke-Free Housing. If you haven’t already banned cigarette smoking in your rental properties, 2014 is the year to do so.
The advantages are numerous:
Attract the broadest pool of qualified applicants;
Eliminate the risk of being sued for second-hand smoke illnesses;
Cut down the number of tenant complaints;
Lower the risk of fire;
Take advantage of free advertising on smoke-free housing websites;
Enjoy quicker and cheaper turnovers because properties do not require as much restoration.
If that’s not enough incentive, smoking bans are becoming law in many major cities. Smoke-free policies take time to implement, so stay ahead of the trend by adopting a smoke-free policy for all incoming tenants in 2014.
A smoking ban must be included in the new lease agreement. Existing leases can only be amended if the tenant agrees. Otherwise, you will need to wait for the new lease to change terms. Mention the policy in your rental ads, and include smoking preference in any prequalifying interviews.
2. Ready for Pets? While it is not required that landlords accept pets, the majority of tenants will ask for one. Others will bring them in after the lease is signed, forcing you to decide whether to boot an otherwise good tenant.
Some local governments are going pet-friendly, limiting landlords’ rights to enforce strict no-pets policies.
While not considered pets, companion animals have become a growing trend, and this year a number of landlords faced discrimination charges by attempting to limit access.
If you are ready to consider pets, then:
Look at ways to damage-proof flooring;
Familiarize yourself with your local rules concerning pet deposits — what limits may be in place;
When screening tenants with pets, focus on the owner’s ability to be responsible, and less on the size and breed of the pet; and,
Reserve the right to evict a tenant who won’t abide by the pet rules rather than focusing on getting rid of the pet. Chances are this owner will simply get another animal that will misbehave, because the problem may be the level of supervision.
DO NOT apply any pet policies to a tenant with a disability who has been prescribed a companion animal.
3. Prepare for Inspections. This year alone, dozens of cities across the country passed ordinances requiring rental property owners to undergo property inspections.
Budget for inspection fees. Any local ordinance that may affect your property will state the frequency of the inspections, and the basic costs — fees have been ranging between $25 and $150 per unit, with inspections annually, or up to every three years.
In addition to registration fees, landlords also must pay the costs associated with items flagged during an inspection, as well as a follow-up inspection.
A number of cities have set up websites that report landlords with code infractions. Put effort into keeping rental units up to code, so that properties do not fall onto problem property lists. Not only does that create longer vacancies, but it can make a property harder to sell.
Keep an eye on tenants throughout the term of the lease. Problem tenants who struggle to pay rent will sometimes bring in code enforcement officers in order to dodge and weave while they live rent-free. Also, landlord can be charged for damage that was caused by the tenant. Keep good records of move-in condition in order to claim reimbursement from the tenant.
4. Screen, Screen, Screen Your Tenants
Along with inspection requirements, many cities now have nuisance laws — sometimes called “three-strikes” laws — that allow officials to rescind a landlord’s rental license if a tenant commits crimes or causes disturbances on the property.
In addition to running tenant screening reports, be sure to speak with previous landlords and ask whether rental applicants under consideration have been disruptive in the past.
5. Electronic Rent Payments
Electronic banking and bill payment is more popular than ever. Many tenants prefer the online method or automatic withdrawal over sending rent checks in the mail. Bucking this trend can lead to late, lost or stolen checks. Electronic payment methods, including automatic withdrawal, electronic checks and credit card payments can keep cash flow running smoothly.
6. Go Online
There is nothing wrong with a rental sign and a cell phone when it comes to filling vacancies. But if you find that you need to advertise, consider the fact that most apartment searchers are using the Internet to choose their next rental home.
While a few of these listing services remain free of charge for landlords, for tenants, they are all free. The service a tenant chooses is the one that offers the best tenant incentives, like cash-back when they rent.
Also, free services may not be attracting the right number of qualified tenants. Be willing to look at several different services and see which is best for your location and property. Paying for an ad is cost-effective if you are quickly finding qualified applicants.
Along with online rental ads, landlords now are finding themselves subject to tenant reviews. Managing your online presence is likely to continue to be an issue in 2014, given the strong preferences tenants show towards websites that allow such reviews.
Take the time to search the Internet for entries regarding you, your business or the address of the property. Attempt to quell disputes with tenants, and if that fails, respond to the review or rating showing a positive way that such an issue would be resolved.
7. Bedbugs Haven’t Gone Away
Unfortunately, this epidemic continues to plague landlords and tenants alike, particularly in metro areas. Some states and local governments have passed rules regarding how bedbug infestations are to be handled, splitting responsibilities between tenants and landlords. Review your policies on pests, and consider whether new bedbug laws require that you update your rental application or lease agreement.
In any event, encourage tenants to report infestations as soon as suspected to avoid an all-out seige of your property by these surprisingly resilient pests.
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.