Investing in real estate may be profitable or expensive. Therefore, landlords must take measures to protect themselves financially and personally.
Landlord Self-Protection and Investment Protection, but some things can be expected rather than anticipated. These instances are what will be discussed here.
Protecting the Dwelling and Your Pocketbook
Numerous catastrophic occurrences can happen to homes and property. Fires, water damage, wind and hail, theft, vandalism, earthquakes, hurricanes, floods, tidal waves and lightning strikes are just a few. Not many can afford the luxury of rebuilding their home or rental dwellings without the assistance of payment from the insurance company. First and foremost, before placing the residence for rent and interviewing prospective tenants, the owner must take steps to protect himself and his property first by purchasing Landlord Insurance.
Landlord Insurance, also referred to as Dwelling Coverage, provides financial security to landlords and protection of their rental dwellings against occurrences that may prove financially detrimental to them, such as loss of the structure caused by a fire or tornado. Furthermore, it defends the insured against claims brought against him due to negligence or liability issues related to the covered property. Coverage is subject to the policy conditions and exclusions outlined in the policy.
Finding the Right Tenant
Finding and keeping a suitable tenant is probably the most challenging process to complete. After accepting numerous rental applications and interviewing the most qualified, many landlords become frustrated and let their guard down. At this point, the landlord may be pressed for time due to an upcoming mortgage payment looming in the not too distant future and grudgingly selects a tenant whom he would not have considered initially. That one careless decision may have negative ramifications in the long run.
A proper and unhurried method of screening prospective tenants must be done to alleviate potential problems. But, of course, there are no foolproof ways to guarantee the perfect tenant will be found in all instances. It is just a guideline to alleviate future landlord-related headaches potentially.
- Have a prospective tenant thoroughly complete a written rental application. It is a crucial step. It will provide the current and previous employers and landlords, which will assist in the decision-making process. Thoroughly review the provided information and call the employer, the references and previous landlords.
- Have the applicant sign a credit check authorization form which will allow the landlord to obtain a credit report about the applicant. The tenant’s spending habits and debt to credit ratio will reveal whether or not the applicant may have financial difficulties.
- Provide a written rental agreement, so all rules and expectations are clear. Many landlord-tenant disputes end up in court because there isn’t enough communication, and people don’t understand each other very well.
- After selecting the right tenant, make sure to obtain at least the first month’s rent and a deposit of equal value. The warranty is to be kept in a fiduciary account and be returned to the tenant at the end of the lease period. Remember that any damages caused by the tenant, fewer issues relating to wear and tear, maintenance and deterioration, can be deducted from the refundable deposit.
- Before the tenant moves in, complete a thorough walk-through with the tenant. A walk-through form is a checklist that identifies any damages or concerns to the rental before moving in.
By taking these steps and putting forth the efforts of thoroughly screening tenants, future problems may be alleviated.