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How to Read a Lease

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A lease is a legally binding contract that outlines the terms and conditions of a rental agreement between a landlord and a tenant. Understanding the contents of a lease is crucial for protecting your rights and responsibilities. As a family-owned business, we are dedicated to ensuring your family receives the highest quality of care available. Understanding the contents of a lease is crucial for protecting your rights and responsibilities. Here, you can find essential information on reading and understanding a lease agreement, including key clauses like rent amounts, lease duration, maintenance responsibilities, and terms for renewal or termination. Knowing these details ensures you make informed decisions that benefit you and your family.

Someday, between the time you move out of your childhood home and when buy your first residence, you’ll probably find yourself staring at a lease. A lease is a contract between someone who owns real estate (the landlord) and another person who occupies that piece of real estate (the tenant), covering the conditions under which the tenant may possess, occupy, and use the property.

Reading a lease can be befuddling, and often the first impulse is to just go ahead and sign the thing, rather than try to wade through and decipher all the legal language. However, it’s important to understand that a lease is a legally enforceable agreement, and you could find yourself in a predicament later on if you fail to abide by the terms–the very ones you agreed to by signing on the dotted line. Before you sign, take the time to read the entire document.

Here’s what to look for in a lease to rent a dwelling, be it an apartment or a house.

Key Takeaways

  • A lease is a contract between someone who owns real estate (the landlord) and another person who occupies that piece of real estate (the tenant).
  • A lease details the conditions under which the tenant may possess, occupy, and use the property.
  • Details about any deposits—such as an upfront security deposit or fees for parking or pets—should also be clearly stated in your lease, along with conditions for getting your money back.
  • In some rental arrangements, the landlord is responsible for taking care of all repairs and maintenance—whether it’s a leaky faucet or a broken air conditioner.
  • There are also agreements where the tenant is responsible for all the costs of repairs and maintenance.1
  • If you have a pet, read the lease to find out if animals are allowed, and if so, whether there are any size or breed-specific restrictions.2

Include Property Details

The lease should include basic facts and data about the property, including the physical address and the landlord’s name and contact information. It should also state the date the lease was signed; the beginning and end dates of the rental period; and options for lease renewal, including policies for rent increases. If any appliances are in the unit (such as a range, refrigerator, or washing machine), or if the unit is furnished, that should be included, too.

Define Deposit, Rent, and Fee Amounts

People tend to pay close attention to how much rent will cost each month, but there may be other costs that should be noted as well, including various deposits and fees. Details about any deposits—such as an upfront security deposit or fees for parking or pets—should also be clearly stated, along with conditions for getting your money back.

The lease should state particulars about the rent:

  • Monthly amount due
  • When it is due
  • Methods of acceptable payment
  • Any allowable grace period for late payment
  • Amount of any late fees

Moving soon? Check out our special Moving Checklist for Sellers so you don’t forget anything!

 

Utility Inclusion

The lease should indicate policies regarding utility service and billing. Be sure to find out which, if any, utilities are included as part of your monthly rent, and whether you are expected to cover any of the costs.

Some landlords, for example, pay for electric, water, and sewer services, while the tenant pays for cable and Internet.

 

Repairs and Maintenance

This is something to pay close attention to since it can end up costing a lot of money, time, and headaches. In some rental arrangements, the landlord is responsible for taking care of all repairs and maintenance—whether it’s a leaky faucet or a broken air conditioner.

In other situations, the landlord might repair or replace only major appliances but leave the tenant responsible for everything else. And then there are agreements where the tenant is responsible for all the costs of repairs and maintenance. There may also be stipulations about the maintenance of the yard or outside areas.

As you can see, it’s imperative that you read the lease to determine your landlord’s responsibilities—as well as yours—when it comes to repairs and maintenance issues. Make sure you’re clear on who pays for what, who arranges service calls, and the amount of time you and your landlord have to address any issues.3

 

Pet Policy

If you have a pet, read the lease to find out if animals are allowed, and if so, whether there are any size or breed-specific restrictions (some rental properties allow most dogs, but not pit bulls, for example).

You might be required to pay a “pet deposit” that may or may not be returned once you move out (assuming no pet damage). Sometimes the “pet fee” is nonrefundable because it is used for treating the space for fleas and deodorizing and shampooing the unit’s flooring and upholstery after you move out.

In some cases, you might also pay “pet rent,” a monthly or yearly fee tacked on to your rent to cover normal wear and tear from pets.

If the lease contains a no-pets clause and you violate it by bringing a furry friend into your unit, the landlord generally has the legal right to evict you. A no-pets clause cannot be added to a lease once it’s signed, however, so your landlord can’t change the pet policy in the middle of your lease.

 

House Rules

The lease should describe the acceptable use of the property (e.g., “The premises shall be used exclusively as a private residential dwelling for the tenant and his immediate family only”), plus any policies for things like.

  • Maximum occupancy
  • Quiet hours
  • Overnight guests
  • Parking and storage
  • Smoking
  • Landlord right of entry
  • Granting access to maintenance workers
  • Property alterations
  • Long absences (on your part)
  • Insurance requirements
  • Eviction

 

Early Termination

The lease should explain what you need to do before moving out. How much advance notice is required? What type of cleaning are you responsible for? The lease should also state your options if you have to move out before the lease expires.

Can you sublet the property, for example? If so, are you required to find the sublet tenant, or is that the landlord’s responsibility? What are the penalties for breaking the lease if you can’t find someone to sublet?

 

The Bottom Line

To make sure you understand what you’re getting into, take the time to read your lease. If there’s something you don’t understand, ask the landlord for clarification, or consult a local specialist in real estate law. Bear in mind that while many of these policies are at the landlord’s discretion, others (such as the landlord’s right of entry and eviction) may be regulated by state or city ordinances.

Once you and your landlord have signed the lease, it’s a very good idea to save a copy. This document can become important if any disagreements arise regarding the property or anything related to your tenancy.

Also, plan on doing a thorough property examination before signing the lease. Check the general condition of the property and make sure items such as appliances, faucets, plumbing, windows, and window fixtures are in good working order. Note and document any existing damage in the lease or in a provided damage assessment form, and keep a copy of this with your contract—just in case.

Ensure a smooth rental experience with our property management services. Our knowledgeable staff can help you prepare and understand your lease agreement and prevent misunderstandings. Call us today at (954) 545-3027 and follow us on Instagram @homesolutionspm.

Reference: [https://www.investopedia.com/articles/personal-finance/090315/millennials-guide-how-read-lease.asp]

5 Tips for Renting Out Your Home

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Renting out your property can be a lucrative venture, but it’s essential to approach it strategically. There are numerous factors to consider, from finding reliable tenants to managing maintenance and finances. Check our tips below and partner with Home-Solutions. With our expertise in tenant screening, property upkeep, and financial management, you can enjoy the benefits of rental income without the daily stress.

Many people mull over the idea of renting out their homes. They may want the benefit of extra income to save money or pay down debt, or they may see it as an alternative to selling during a housing slump, a way to wait things out until the economy improves.

The motives are many, but renting may become more trouble than it’s worth when appropriate considerations aren’t made. Here are five steps that will get you going in the right direction.

If you are lucky enough to live in a tourist-friendly area, like near the beach or a major city, renting out your home as a short-term or seasonal rental may be an option, too. Before you list your property on a site geared toward short-term rentals, such as Airbnb or Vrbo, find out the rules and regulations for these types of rentals in your town and city.

Key Takeaways

  • The responsibilities of landlords are vast and can often come with unexpected costs. It helps to have some cash reserves, if possible.
  • When screening a potential renter, running a deep background check is advisable. Make sure to ask for multiple references from renters you are considering.
  • Know your rights and the rights of your tenants—it’s a good idea to familiarize yourself with the Fair Housing Act.
  • During peak seasons you can rent your unit for even more, according to a study by Renthop.com. July through September appears to be the best time to locate a tenant; however, this seasonality can vary from city to city.
  • If you have a home on a lake, near a beach, or close to another seasonal venue, it may be worth it to investigate short-term rental platforms.

1. Understand the Responsibility Involved

First, you must determine whether being a landlord is an obligation you can even handle. The benefits of renting are numerous, such as the ability to deter the vandalism that often plagues an empty home, the ease of tax breaks, and the ability to generate income that covers the bills and possibly even creates a profit.

However, being a landlord is also one more responsibility you’ll need to fit into your life, and it’s safe to assume that things will sometimes fail to run smoothly. You’ll need to stay on top of repairs and maintenance, collect rent, dole out more for your homeowners insurance policy, and try to avoid wear and tear on your property by keeping an eye on your tenant’s housekeeping skills.

It’s important to note that the Internal Revenue Service (IRS) typically requires that landlords report rental income on their tax returns. However, the IRS has a Minimal Rental Use rule, which states that if a dwelling unit is used as a residence, meaning your home, and was rented for fewer than 15 days, the rental income does not need to be reported. However, if rented for fewer than 15 days, the landlord does not get the tax benefits of deducting expenses, such as utilities, which would normally reduce taxable income.

2. Prepare Your Home for Renters

In a down market, you probably won’t be able to get away with renting out the home as is. Tenants are more attentive and choosy at such times, because of the increased availability of rental homes, and their expectations are much higher.

Prepare for the new tenant by thoroughly cleaning your home and making sure appliances are working and are in good condition. If you’ve decided that you are renting out a room or area within your house, make sure that you can secure that area from the rest of your home.

3. Market Your Home

Once the house has been straightened out, develop a list describing what makes it appealing so you can put it on the market. Take note of those commonly desirable features such as a washer and a dryer, air conditioning, and a garage. Use rental terms to help “sell” the property.

Words that’ll help you get a renter include: “granite,” “stainless steel,” “vaulted ceilings,” “maple,” and “hardwood floors.” Be sure to use all of the terms that apply to your home.

Next, post an advertisement for the home on reputable websites and in local newspapers. In addition, some real estate agents will work with owners to help rent out their homes, although the agent will take a commission if they find you a renter.

You can also hire a property management company to handle the legwork of renting out your house, but you will have to pay them. The cost varies by company but it is often between 8% to 12% of the monthly rent, and there may be other fees involved.

4. Hire Professionals to Help You Navigate the Financials

Turning your home into a residential rental property may seem like a simple task, but it’s important to talk with real estate attorneys and accountants to make sure you are abiding by tax laws, zoning ordinances, and local property rules.

You may qualify for tax deductions, but it’s important to know which exact expenses are deductible. Plus, there are limits on how much you can deduct each year, and the amount you are able to deduct may differ from the rental activity reported on your tax return.

An attorney can also help you navigate landlord-tenant regulations, which vary from state to state, and help you understand your community’s rules governing rental properties. You can also seek help drafting the lease, making sure that it follows local laws. Finally, talking with an attorney can help you determine suitable house rules and emergency contacts.

Set the cost of the rent by learning what other rental properties are going for in your neighborhood and community. Remember, potential tenants will be scouting around for deals, so set the rent at a competitive price and make sure you highlight all the most valuable aspects of your home.

5. Screen Tenants Carefully

Start looking for a tenant as soon as your property is ready to be shown. Then, choose your tenant very, very carefully. 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. Also, if the person is someone you may be cohabitating with, learn their habits so you won’t run into any nasty surprises.

Don’t forget to gather references for potential tenants and check their credit histories. You should also take safety precautions when screening a tenant⁠—after all, this person is a stranger. Once you’ve found the right tenant, ask for a reasonable security deposit and arrange an appropriate payment schedule.

 

Should I Run a Credit Check on a Tenant?

It’s always a good idea to run a credit check on a potential tenant. The information contained in a credit report can tell you a lot about how financially responsible a prospective tenant is, and it can help you predict if they have the ability to pay rent on time. You can pull the tenant’s credit report directly from one of the three main credit bureaus (Experian, TransUnion, and Equifax) or use a specialized agency to gather the information you need.

What’s a Common Mistake Landords Make?

Not screening tenants thoroughly is one of the most common mistakes new landlords make. This, unfortunately, can lead to problems in the future, like late payments, issues with neighbors, and damage to the property.5 Even if a prospective tenant can move immediately and offers to pay a deposit, landlords should take the time to check out the person’s background. A standard rental application form can provide you with the information you need to obtain a credit report, and you also should contact employers and former landlords.

Is It a Good Idea to Hire a Property Management Company?

It can be a good idea if you are renting out your property but you don’t have the time or experience to handle the business. Keep in mind, though, that the property management company you hire will take a percentage of the rental profits. Most property management companies charge a monthly fee of between 8% and 12% of the monthly rent collected.

The Bottom Line

Renting out a home can be beneficial for both owners and tenants⁠, but only if you take the time to address and prevent potential pitfalls. The chance to make some money, particularly in a tough housing market, is appealing, but don’t cut corners when finding and screening the tenant. After, all it’s still your house.

Unlock the potential of your property. Our expert property management team can help you navigate the rental market with ease. From tenant screening to financial management, we’ve got you covered. Call us today at (954) 545-3027 and follow us on Instagram @homesolutionspm.

Reference: [https://www.investopedia.com/articles/mortgages-real-estate/10/renting-out-home.asp]

How to Increase Your Home’s Value

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Title: How to Increase Your Home’s Value

Whether you’re preparing to sell your house or rent it out, maximizing its value is key.  Strategic improvements can significantly enhance its appeal to potential buyers or tenants. Let’s explore the secrets to transforming your house into a highly sought-after haven!

Even in a seller’s market, where inventory is scarce and bidding wars are common, it still pays to invest some time and energy in positioning your home to sell for top dollar. This can involve a variety of steps, from working with a real estate agent who truly understands your local market to spending some money to make sure your home looks its best for buyers. Here are 10 tips for selling your home that Realtors say will separate you from the competition — and help you bring in a higher price.

1. Find a real estate agent

Working with a skilled local real estate agent who knows your area inside and out can help you sell your home more quickly, and often, for more money. In fact, data from the National Association of Realtors shows that between July 2022 and June 2023, homes listed without the assistance of a Realtor sold for a median price of $310,000, while those sold with one fetched a median of $405,000. Interview several candidates before you commit to one agent — the better you get along, the smoother the process is likely to be.

2. Invest in value-adding improvements

Determining which home improvements to invest in can be daunting, and the costs can add up quickly. The key is to spend your money on projects that will provide the most return on your investment.

Minor kitchen upgrades are typically a wise choice, says San Diego–area Realtor Jade Lee-Duffy. “The heart of the home is the kitchen, and many buyers will judge a property by its kitchen,” she says. Just don’t go overboard: “While a complete overhaul of this space can run into the tens of thousands, a minor update is where you can gain the greatest return,” she says. “Think about resurfacing cabinets, replacing countertops, a fresh coat of paint or updating the fixtures and hardware.”

Updating a bathroom is another smart investment, says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida, and author of “The Brilliant Home Buyer.” “Renovated kitchens and baths are the ‘money rooms’ — those that add the most value to a home,” she says.

3. Up your curb appeal

As the saying goes, you don’t get a second chance to make a first impression. “Make sure your front yard is free of debris, the bushes are pruned and the grass has been cut,” says Lee-Duffy. “Also, add some bright potted plants by the front door to make buyers feel welcome.”

Some other easy updates that can improve curb appeal include:

  • Touching up exterior paint
  • Adding window flower boxes
  • Installing a new mailbox
  • Adding new mulch around shrubs and trees

4. Get a pre-listing inspection

Investing in a home inspection before putting your property on the market is another step to consider. “You don’t want any unexpected surprises,” says Lee-Duffy. “It’s best to find out beforehand if there are any issues that you can fix, before buyers find out on their own.” That would give them negotiating power for a lower price or, worst case scenario, a reason to back out of the deal. So it may be worth a few hundred dollars for the peace of mind.

There is, however, a downside to a pre-listing inspection: “Beware, because once a seller becomes aware of an existing defect and does not correct it prior to listing, they are obligated to disclose it to a buyer,” says Severance. “Defects that a buyer learns were known but not disclosed, prior to accepting an offer, can kill the deal.”

5. Highlight the positive with professional photos

Spending a bit of money on high-quality photography can go a long way toward helping your home sell for a higher price. “The majority of people search for properties online,” says Lee-Duffy. “If the photos pop, it can translate into a higher sale price — and sell faster, too.”

It’s OK to leave some things to the imagination when it comes to your home’s online listing, though. “I advise against photographing every square foot of the home,” says Severance. “The goal of photographs is not to give all the goodies away online; it’s to make a buyer want to see more — to whet their whistle enough to entice them to see it in person. If they don’t come see the house, they probably aren’t making an offer.”

6. Stage your home

When it comes to home staging, says Severance, there are two rules of thumb: less is more and keep it neutral. “It’s very important to capture buyers’ interest from the front door,” she says. “Pay extra attention to the entry: Repaint; place flowers; buy a new area rug, an impressive mirror or a dramatic piece of art.”

Remove objects and clutter that visually shrink a room, such as large ottomans or too many plants, and remove everything from the kitchen counters except for one or two new-looking appliances. “And don’t forget to stage the deck or patio, because that is an extension of the house that can make a small home feel much larger than it is,” Severance adds.

You can do the staging work on your own or up the ante by hiring a professional stager.  A pro will average around $1,800, according to HomeAdvisor.

7. Set the right asking price

Identifying the best price for your home can be critical to your success. “Setting the price too high can be detrimental and prevent buyers from walking through your front door,” says Lee-Duffy.

How do you find that sweet spot of pricing for profit but not overpricing? The expertise of your agent can be truly valuable here. A knowledgeable agent will understand fair market value in your area, how much your house is worth and how much you might reasonably expect to get for it in the current market.

“Good pricing requires the expertise to thread the needle,” says Severance. “List at a number that is lower than comparable properties, in order to draw attention to it, but not so low that you will be disappointed if you only get one offer right at list price.” If enough buyers are enticed, you might even set the stage for a bidding war.

8. Remove personal items

“The goal of any showing is for the buyer to envision their own belongings in the space,” says Severance. So, while family photos and other knickknacks might seem like they have no bearing on how much money your home commands, they really do matter — especially if you are still living in the home while you’re trying to sell it.

If buyers are distracted by personal items, then chances are they won’t be able to see themselves in the space, and will not end up making an offer. “Buyers are thinking of their own furniture, where it will go and how it will fit. It’s the house they came to see, not the items inside of it,” she says.

9. Be ready to move fast

Once your property is listed on the market, things can happen quickly. It’s important to be well prepared ahead of time so that you can be as responsive as possible to potential offers. “Fill out all the necessary documents, such as any seller disclosures, and have paperwork for recent repair work, home renovation costs and utility bills on-hand for any buyer requests that come in,” says Lee-Duffy.

Sellers who are slow in reaction time or unresponsive can lose buyers, adds Severance. “If the buyer feels that they are not being dealt with fairly, they are very likely to walk away,” she says.

10. Use your head, not your heart

Finally, try to remove emotion from the equation and see the process as a simple transaction — your home is no longer “home” but a product for sale. It’s not unusual for prospective buyers to request credits or repairs, and it’s easy as a seller to take offense, so try to have a clear understanding of what issues and items you may be willing to make concessions on.

“It’s important to take emotion out of it and remember that the buyer usually doesn’t expect to get everything they ask for,” says Severance. “Take a closer look at which requests are valid and fair, and offer something. The cost to you is not in giving the concession — it’s the expense of losing the buyer, putting the property back on the market, starting all over again and getting a potentially lower offer.”

Maximize your rental income! Our team of professionals will help you prepare your property for the rental market, set the right rental price, and find qualified tenants. Call us today at (954) 545-3027 and follow us on Instagram @homesolutionspm.

Reference: [https://www.bankrate.com/real-estate/tips-for-selling-home/#fast]

10 Tips to Selling Your Home

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Are you excited to embark on a new chapter? Our tips below are your roadmap to a stress-free and successful sale. Unlock the secrets to a smooth and joyful selling experience with Home-Solutions.

Even in a seller’s market, where inventory is scarce and bidding wars are common, it still pays to invest some time and energy in positioning your home to sell for top dollar. This can involve a variety of steps, from working with a real estate agent who truly understands your local market to spending some money to make sure your home looks its best for buyers. Here are 10 tips for selling your home that Realtors say will separate you from the competition — and help you bring in a higher price.

1. Find a real estate agent

Working with a skilled local real estate agent who knows your area inside and out can help you sell your home more quickly, and often, for more money. In fact, data from the National Association of Realtors shows that between July 2022 and June 2023, homes listed without the assistance of a Realtor sold for a median price of $310,000, while those sold with one fetched a median of $405,000. Interview several candidates before you commit to one agent — the better you get along, the smoother the process is likely to be.

2. Invest in value-adding improvements

Determining which home improvements to invest in can be daunting, and the costs can add up quickly. The key is to spend your money on projects that will provide the most return on your investment.

Minor kitchen upgrades are typically a wise choice, says San Diego–area Realtor Jade Lee-Duffy. “The heart of the home is the kitchen, and many buyers will judge a property by its kitchen,” she says. Just don’t go overboard: “While a complete overhaul of this space can run into the tens of thousands, a minor update is where you can gain the greatest return,” she says. “Think about resurfacing cabinets, replacing countertops, a fresh coat of paint or updating the fixtures and hardware.”

Updating a bathroom is another smart investment, says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida, and author of “The Brilliant Home Buyer.” “Renovated kitchens and baths are the ‘money rooms’ — those that add the most value to a home,” she says.

3. Up your curb appeal

As the saying goes, you don’t get a second chance to make a first impression. “Make sure your front yard is free of debris, the bushes are pruned and the grass has been cut,” says Lee-Duffy. “Also, add some bright potted plants by the front door to make buyers feel welcome.”

Some other easy updates that can improve curb appeal include:

  • Touching up exterior paint
  • Adding window flower boxes
  • Installing a new mailbox
  • Adding new mulch around shrubs and trees

4. Get a pre-listing inspection

Investing in a home inspection before putting your property on the market is another step to consider. “You don’t want any unexpected surprises,” says Lee-Duffy. “It’s best to find out beforehand if there are any issues that you can fix, before buyers find out on their own.” That would give them negotiating power for a lower price or, worst case scenario, a reason to back out of the deal. So it may be worth a few hundred dollars for the peace of mind.

There is, however, a downside to a pre-listing inspection: “Beware, because once a seller becomes aware of an existing defect and does not correct it prior to listing, they are obligated to disclose it to a buyer,” says Severance. “Defects that a buyer learns were known but not disclosed, prior to accepting an offer, can kill the deal.”

5. Highlight the positive with professional photos

Spending a bit of money on high-quality photography can go a long way toward helping your home sell for a higher price. “The majority of people search for properties online,” says Lee-Duffy. “If the photos pop, it can translate into a higher sale price — and sell faster, too.”

It’s OK to leave some things to the imagination when it comes to your home’s online listing, though. “I advise against photographing every square foot of the home,” says Severance. “The goal of photographs is not to give all the goodies away online; it’s to make a buyer want to see more — to whet their whistle enough to entice them to see it in person. If they don’t come see the house, they probably aren’t making an offer.”

6. Stage your home

When it comes to home staging, says Severance, there are two rules of thumb: less is more and keep it neutral. “It’s very important to capture buyers’ interest from the front door,” she says. “Pay extra attention to the entry: Repaint; place flowers; buy a new area rug, an impressive mirror or a dramatic piece of art.”

Remove objects and clutter that visually shrink a room, such as large ottomans or too many plants, and remove everything from the kitchen counters except for one or two new-looking appliances. “And don’t forget to stage the deck or patio, because that is an extension of the house that can make a small home feel much larger than it is,” Severance adds.

7. Set the right asking price

Identifying the best price for your home can be critical to your success. “Setting the price too high can be detrimental and prevent buyers from walking through your front door,” says Lee-Duffy.

How do you find that sweet spot of pricing for profit but not overpricing? The expertise of your agent can be truly valuable here. A knowledgeable agent will understand fair market value in your area, how much your house is worth and how much you might reasonably expect to get for it in the current market.

“Good pricing requires the expertise to thread the needle,” says Severance. “List at a number that is lower than comparable properties, in order to draw attention to it, but not so low that you will be disappointed if you only get one offer right at list price.” If enough buyers are enticed, you might even set the stage for a bidding war.

8. Remove personal items

“The goal of any showing is for the buyer to envision their own belongings in the space,” says Severance. So, while family photos and other knickknacks might seem like they have no bearing on how much money your home commands, they really do matter — especially if you are still living in the home while you’re trying to sell it.

If buyers are distracted by personal items, then chances are they won’t be able to see themselves in the space, and will not end up making an offer. “Buyers are thinking of their own furniture, where it will go and how it will fit. It’s the house they came to see, not the items inside of it,” she says.

9. Be ready to move fast

Once your property is listed on the market, things can happen quickly. It’s important to be well prepared ahead of time so that you can be as responsive as possible to potential offers. “Fill out all the necessary documents, such as any seller disclosures, and have paperwork for recent repair work, home renovation costs and utility bills on-hand for any buyer requests that come in,” says Lee-Duffy.

Sellers who are slow in reaction time or unresponsive can lose buyers, adds Severance. “If the buyer feels that they are not being dealt with fairly, they are very likely to walk away,” she says.

10. Use your head, not your heart

Finally, try to remove emotion from the equation and see the process as a simple transaction — your home is no longer “home” but a product for sale. It’s not unusual for prospective buyers to request credits or repairs, and it’s easy as a seller to take offense, so try to have a clear understanding of what issues and items you may be willing to make concessions on.

“It’s important to take emotion out of it and remember that the buyer usually doesn’t expect to get everything they ask for,” says Severance. “Take a closer look at which requests are valid and fair, and offer something. The cost to you is not in giving the concession — it’s the expense of losing the buyer, putting the property back on the market, starting all over again and getting a potentially lower offer.”

Time to sell your house? We understand the need for speed and fairness. Connect with us, and together we’ll guide you on this journey to a swift and equitable deal. Call us today at (954) 545-3027 and follow us on Instagram @homesolutionspm.

Reference: [https://www.bankrate.com/real-estate/tips-for-selling-home/#fast]

Renewing a Rental Lease Agreement

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Feeling settled and happy in your current place? Fantastic news! At Home-Solutions, we understand the value of a comfortable and familiar home. Learn below our tips for a stress-free lease renewal process.

What You Should Know About Renewing a Rental Lease Agreement

When the end of a lease is on the horizon, you have a decision to make. If the current tenant wishes to stay longer, you can choose between renewing a lease agreement and finding another tenant. Finding a new tenant can be a time-consuming and costly process that involves marketing the property, sorting through applications, showing the unit, and screening potential renters. The longer it takes to find a new tenant, the more expensive the process becomes.

If you’re wondering whether or not to renew a current lease, check out our list of pros and cons and our tips on how to handle lease renewals.

Reasons to renew a lease

The Balance outlines a few reasons for renewing a lease, and the first two involve time and money. If a tenant chooses to stay with you, you can save the time you would have to spend searching for a replacement and then getting the apartment ready for a new tenant.

Eliminated the cost of finding a new tenant

The expense of turning over each vacant unit averages around $1,750 a month. This is before you even take into consideration your own personal time (or that of your property manager’s), which could be better spent on other endeavors.

If you increase the rent to keep up with market value, but don’t raise it so high that you make the current renter consider moving, you’ll receive more money each month without shelling out bucks to find a new tenant. You also won’t need to give the property a major overhaul, unless you agree to during lease negotiations.

Saves Time

Not only do you secure your cash flow and save money when you renew a lease, but you save time as well. Consider all the steps to finding a new tenant: advertising the property, sorting through applications, meeting with prospective tenants, and thoroughly screening them. Renewing a lease can be a much simpler process.

Reduces the Risk of vacancy

With a vacancy, you’re not earning income but you’re still potentially shelling out for a mortgage, utilities, and other expenses. Lost rent is especially significant when you rely on rental income to pay the mortgage. According to BiggerPockets, vacancy can leave a property exposed to potential break-ins and vandalism.

Reduces the Risk of Having a Bad Tenant Move In

Even with a thorough screening process, there’s always some uncertainty with a new tenant. If the tenant is responsible and pays their rent on time, it’s to your advantage to keep them around.

The Tenant is Unfamiliar 

Finally, you already have systems in place with the current tenant. For example, you are accustomed to how they pay each month and they know how to get in touch with you regarding maintenance issues. There’s always a learning curve with someone new.

Reasons not to renew a lease

May Not Have Reliable Tenants In the First Place

Finding a new tenant can cost you time and money, but so can chasing down rent. If your tenant has been late with rent on numerous occasions or broken the rules in the lease agreement, you may not wish to renew their lease. In this type of situation, it might make sense to look for a more reliable tenant.

Can Take the Opportunity to Renovate

Upgrading a unit can be a hassle when someone is living on the property, but our article on rental property features tenants look for shows that strategic upgrades such as installing stainless steel appliances can add more value to your unit. Using the time in between tenants to complete renovations can help you raise the rental price of the unit and attract higher paying renters in the long run.

There May Be Limits to the Amount You Can Raise

According to Realtor, rent-controlled areas have local statutes governing how often and how high a landlord can raise rent.

Even in areas not governed by rent control laws, if you raise the rent too high, you risk losing a stable tenant. Before raising the rent on a tenant that you want to keep, you should factor in the money you’ll save on tenant turnover.

How to Renew a Lease

Avail points out that some states require you to follow guidelines about renewal timeframes. In general, you should be proactive with renewals. Ask your tenant 90 days in advance whether they wish to renew the lease. This could get them thinking about renewal ahead of time so you potentially have advanced notice of their intentions. Then you have more time to get the ball rolling on advertising and searching for a new tenant.

According to RentPrep, you should create a new lease with appropriate changes to the rent and lease terms as appropriate. You can update the renewal to anything you agree on with your tenant, be it six months or two years.

How to Handle Negotiations for Lease Renewalls

If your tenant is requesting optional updates or changes, Avail suggests weighing the cost of turnover against the cost of their request. For example, a request to repaint the apartment might seem reasonable given the expenses associated with finding a new tenant. You might even find that you would need to update your property in order to rent it, so you’re still saving money.

When it comes to negotiating, your best bet is to do your research first. Use a fair market rent calculator and check similar properties in your area to see whether or not you should adjust your rent price. If the rent is too high, you may lose a good tenant to some place that is more affordable. Do you have good tenants who pays rent on time? You may want to encourage them to sign a longer lease at a reduced rate, or suggest renewing a lease agreement on a month to month basis. In the end, you’ll need to weigh the risks and costs of tenant turnover and decide if you are willing to make concessions to keep a good tenant longer.

If you do decide to not renew a lease, be sure to check your local and state housing laws on the matter so that you follow appropriate rules and regulations regarding lease termination, including required notices.

Common Questions on Renewing a Lease

What if the tenant does not want a rent renewall? 

When a lease expires, a tenant may opt to move, renew a lease, or continue to pay rent as a month to month tenant. If you offer a lease renewal, agreement is at the tenant’s discretion. If they choose not to renew a lease, they must vacate the property in accordance with the expiring lease.

Can the landlord or property manager include changes in a lease renewal agreement? 

Renewing a lease agreement might require a new contract with specified terms which is signed and dated. If there have been any changes to your rental policy during your renter’s period of tenancy, renewal may be a good time to update the lease to reflect these changes.

How long before the lease expiration should a renewal offer be sent?

This will be depend on the terms in the lease and applicable law. It’s wise to speak to your tenant 90 days before the lease expiration in order to give yourself enough time to find a new tenant.

Conclusion

There are often pros and cons to both sides when considering lease renewals. Keeping courteous tenants longer not only saves you time and money, but it also gives you the peace of mind that comes with having someone familiar in your rental unit. However, if you currently have an undesirable tenant, it may be worth the time and money to consider turning over your rental unit.

If you decide to turnover your rental unit, a thorough screening process can greatly increase the chances of you getting a higher quality tenant with a longer average tenure. TransUnion SmartMove helps you make smarter leasing decisions with a full tenant credit report, tenant background check and criminal report, as well as an eviction check report, from a source you can trust. You also receive a ResidentScore check, built specifically to look at lease outcomes.

Empower yourself with renewal knowledge and keep your happy place thriving! Connect with Home-Solutions experts for personalized guidance and solutions for property owners. Call us today at (954) 545-3027 and follow us on Instagram @homesolutionspm.

Reference: [ https://www.mysmartmove.com/blog/what-landlords-should-know-about-lease-renewals ]

Pros and Cons of Allowing Pets in Rental Properties

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For many renters, pets are cherished members of the family. But for landlords, the question of allowing furry friends in their properties can be a heck of a dilemma. Let’s explore both sides of the leash.

Pros and Cons of Allowing Pets in Rental Properties

Most pet owners consider their pet as family, and won’t even consider an apartment that would require them to give their beloved animal up. When you think about how many potential tenants are looking for a rental property that will accept pets, it may be worth your while to welcome furry, four-legged creatures. On the other hand, you may be concerned about pet damage to your rental property.

As with any decision in the rental business, there are pros and cons to your choices. We’ve outlined these below, along with information on how to screen a tenant with pets and some tips for allowing pets in rental properties.

Take a look at our guide on whether or not you should allow pets in your rental property and use the information to determine which stance towards pets is the best for your rental business.

Pros to Allowing Pets in Rental Properties

There are several positives to establishing a pet-friendly property:

1. Higher Rent

Market value determines the amount you can set your rent. By allowing pets in rentals (large dogs in particular), especially when very few properties in your neighborhood are pet-friendly, you may be able to command a higher rent. At the very least, it could give you a leg up on the competition if a decision comes down to your property and a similar one that doesn’t allow pets.

2. Longer Tenure

The more a tenant considers an abode their home, the more likely they are to renew a lease. Certainly, settling in with a pet can make a rental feel like a permanent residence. Additionally, The Balance points out that it can be harder for pet owners to find alternate dwellings that will take both them and their pet.

3. Larger Pool of Applicants

Pet ownership in the United States is at an all-time high. According to the 2017-2018 APPA National Pet Owners Survey, 68% of U.S. households own a pet. If your rental property is marketed towards a younger market, there’s an even higher likelihood that a pet is part of the package. Zillow reports that over 76% of millennial renters own pets. Allowing pets attracts more tenants to your property and gives you more tenants to choose from, so you can find the best fit.

4. Responsible Pet Owners Are More Likely to Be Responsible Tenants

Rentalutions points out that taking care of a pet requires a lot of time and attention, and there’s a likelihood that behavior will translate into renters treating your property with the same amount of respect and energy.

Cons to Allowing Pets on Your Property

Allowing pets on your property can pose risks, although some of these can be reduced. Here are a few concerns that may arise:

1. Pet Damage

There are certain behaviors that landlords associate with pets and property damage, including urinating on carpets, chewing wood, leaving “calling cards” in public spaces, and destroying landscaping.

2. Noise

Excessive barking can be disruptive to neighbors, and it can be hard to keep noise levels at manageable levels when there are multiple dogs, cats, and birds on the property.

3. Odor

If litter boxes aren’t cleaned or pet accidents occur in the hallway, offensive odors can build up in common areas. Animals that aren’t properly groomed or bathed can cause other odors inside the unit.

4. Injuries to Other Tenants

There is a risk of physical injuries to neighbors and yourself. You may want to consider requiring pet owners to hold adequate renters insurance. NerdWallet states that renters insurance may potentially provide coverage against dog bites on the property.

How to Screen Tenants with Pets

Whether or not you want to approve the owner should be your first consideration, and their pet second. A thorough online tenant screening is your first step to determining if a tenant is a good fit for your property, and may help you answer questions about their responsibility as a pet owner. Along with checking a prospective tenant’s credit, criminal, and eviction history, checking references is always a good idea. A reference check can also help you determine whether there has been trouble with their pets in the past.

The Massachusetts Animal Coalition recommends meeting the pet along with the tenant in order to assess whether the applicant is a responsible pet owner. Rather than simply limiting certain pets based on weight or breed, they suggest basing your decision on a case-by-case basis.

You’ll want to see for yourself if the animal is well-groomed and well-behaved. In the case of a dog, you’ll be able to note if they are calm and responsive to the owner’s commands.

Some questions you may want to ask:

  1. Is the pet left alone for long periods of time?
  2. What type of regular exercise does your pet get?
  3. Are they spayed or neutered?
  4. Who looks after the pet when you are away?
  5. Has your dog had any obedience training?
  6. Is your pet properly licensed?
  7. How do you control fleas?

While there are generally no right or wrong answers to this line of questioning, it can tell you if the owner is responsible and reasonable when it comes to their pet.

Rental Pet Policy Tips

If you’re concerned about damage to your property, it would be wise to include a pet policy and address pets in the lease. You should provide all tenants, including those without animals, with a copy of your pet policy. A tenant may decide to get a pet later, and it’s important they are clear on your expectations and provisions up front.

Nolo advises you to only allow pets you approve beforehand, and to make it clear that you reserve the right to ask the tenant to remove the pet if they don’t comply with your policies. You may want to change the policy later on, so it’s a good idea to state clearly that you have the right to amend the rules by giving tenants reasonable notice.

Another option to mitigate risk is to charge pet fees that will cover potential damages or pay for professional carpet and air duct cleaning so that you don’t lose future tenants (some of which may have allergies). Bankrate points out that tenants are more motivated to prevent pet-related damage if the fee is refundable. You’ll also want to check your state and local housing laws to see whether you can add an additional pet deposit and how much you are allowed to collect.

How to Avoid Potential Pet Damages

According to the San Francisco SPCA, there are a few guidelines to consider when setting up your pet policies. The first, which we’ve already mentioned, is to make sure your policies are in writing.

Careful tenant screening of each applicant is your best bet at successfully handling pets on your property. Finding a good tenant is based on much more than whether or not they have a furry companion, and if they are responsible in other ways–such as managing their finances–pets may not pose a problem.

TransUnion SmartMove is the landlord’s online tenant screening solution for great reports, great convenience, and great tenants. Landlords receive a renter credit report, rental criminal background check, and eviction check to make informed, timely screening decisions.

Ready to make a positive decision about pets in your rental property? Connect with Home-Solutions! We are experts in personalized guidance and solutions for property owners. Call us today at (954) 545-3027 and follow us on Instagram @homesolutionspm.

Reference: [ https://www.mysmartmove.com/blog/allowing-pets-in-rental-properties ]

Move-In Fees vs. Security Deposits: Understanding the Key Differences

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Keeping your rental property attractive to tenants is key to maintaining occupancy and a steady income stream. But with various fees involved, ensuring clarity around costs can make a big difference in attracting qualified renters. 

As a landlord, there are two essential payments to accept from tenants when they rent your property: move-in fees and a security deposit. But what’s the difference between move-in fees vs. security deposits Move-in fees offset some of the expenses they may incur when a tenant moves in and are non-refundable. These fees are often used for expenses like processing a rental application, allowing a pet on the property, or for setting up a utility connection. On the other hand, a security deposit is refundable, and is a one-time payment collected at the beginning of the lease to cover any damage caused by the tenant. Any leftover funds must be returned once the lease is over and the tenant moves out. Learn more about move-in fees and security deposits in our guide below.

They say that it’s better to give than to receive. For independent landlords, that can be true: when renting out property, there is some relief in being able to give back a tenant’s security deposit because they treated your property well.

Giving hundreds or thousands of dollars to your renter might seem counter-productive for your business. In reality, returning a deposit suggests that your renter left your property in the same great, move-in ready condition in which they found it. You can rest easy, knowing that you don’t have to deal with expensive damages, evictions, or repair-based vacancies—what could be better than that

Unfortunately, not every applicant out there is going to be a great renter. Some tenants can cause property damage, pay rent late or not at all or skip town before the lease is over. Tenant turnover costs average of $1,750 per month and can leave you holding the bag for costly repairs. It’s essential to protect your financial investment through charging security deposits and move-in fees.

Although both are collected at the beginning of the lease, there are several key differences between move-in fees and security deposits. They differ in charge limits, purposes, and legal requirements. All of these differences—and the various rules for each—are discussed below.

Expertly managing move-in fees and security deposits aside, the best way to protect your business is to find excellent renters from the start. Using a comprehensive tenant screening service like SmartMove® gives you the opportunity to vet your renter applicants in order to feel more confident in selecting your choice of renters.

What are Move-In Fees

Move-in fees are used by some landlords to help offset various expenses a landlord may incur when a tenant first moves in. They are typically charged upfront during the initial lease agreement and can be used by landlords to offset various expenses that may incur.

According to Apartments.com, move-in can fees cost renters between $300 and $500, though some landlords don’t charge any at all, and others may charge even more. As you determine what to charge, it is important to always be fair and transparent in your pricing.

Unlike a security deposit, move-in fees are generally non-refundable and typically not regulated. It’s up to the landlord’s discretion to decide how much to charge and for what expense. This may vary based on:

  • The terms of the lease or rental agreement
  • The value and location of the property
  • The competitive state of the rental market

There are several types of charges that can fit under the umbrella of “move-in fees.” These are discussed in detail below.

Application Fee

Most states allow landlords to charge their rental applicants with an application fee. The average application fee is between $30 and $50. In some cases, it can cost $100. This fee is designed to cover the cost of a tenant credit check in addition to the time and trouble it takes landlords to run one.

Note: Some states restrict how much you can charge for credit check fees during the application process. For example, California sets a maximum screening fee of approximately $35. This fee can only be used for “actual out-of-pocket expenses” plus “the reasonable value of time spent” by a landlord obtaining:

  • A consumer credit report
  • Background information
  • Personal references

Landlords in California who use the application fee to cover the cost of a credit check must provide rental applicants with an itemized receipt.

It’s important for landlords to research their state-specific and federal laws when establishing a real estate business. There are also established best practices to follow when charging a move-in fees. Understanding the general dos and don’ts of rental application fees can help you cover yourself when bringing new tenants into your space. In general, it’s a good idea to:

  • Notify the applicant up front that the fee is non-refundable, unless the applicant is denied prior to running a credit report
  • Include the exact move-in fee amount on the rental application
  • Save a signed copy of the completed application for your records
  • Follow all local laws and regulations pertaining to move-in fees

In hot rental markets, you may end up renting a property to an applicant while other applications and fees are still pending. If you do not run a credit check on a prospective tenant, their money must be returned.

Additionally, landlords should only charge credit check fees on applicants who pass your pre-qualification questions. If an applicant is unqualified and does not meet the income requirements, it’s better to save your time and the applicant’s money by not collecting a credit check fee. One way to speed up the application process is to ask for income verification. The industry standard on the rent-to-income ratio is three times the cost of rent earned in monthly income, but this may vary based on location. If the applicant does not meet your screening criteria for income, then it may be time to move on to another applicant.

Once you have the applicant’s credit check in-hand, there are additional legal considerations to keep in mind. If you deny an applicant based on poor credit after performing a tenant check, or if you charge higher rent due to poor credit, you must comply with regulations under the Fair Credit Reporting Act (FCRA).

SmartMove provides tenant screening checks that are FCRA-complaint, which can give you one less thing to worry about. Also, when you screen with SmartMove, you have the option to cover the cost of the credit check yourself or pass this expense onto the tenant as part of your application fee. This gives landlords the flexibility to structure their move-in fees as they see fit for their business.

First and Last Month’s Rent

In addition to collecting the first month’s rent or prorated rent, some landlords request the last month’s rent as a part of the move-in fee.

Collecting the last month’s rent upfront provides a measure of protection in the event your tenant moves out before the lease agreement is complete.

Pro Tip: If you decide to protect yourself by charging the last month’s rent within your move-in fee, it’s wise to keep these funds clearly labeled and separate from the tenant’s security deposit.

This practice is less common in short-term rental agreements because landlords typically charge month-to-month rent premiums, ranging from an extra $100 to $300 per month—or an additional percentage of the cost of the rent. Such a financial boost helps protect landlords against impending tenant turnover costs, as short-term leases pose a higher risk of tenants moving out with untimely notice.

Pet Owner Fee

According to Apartments.com, over 70% of renters own pets. In order to attract a larger pool of rental applicants, many landlords decide to advertise their rental listing as “pet-friendly.”

There are many pros and cons of allowing pets in rental properties. Benefits may include:

  • Higher rent price
  • Longer tenancies
  • More responsible tenants

If you choose to allow your tenants to live with their furry friends, then you might consider adding a pet owner fee to your move-in costs. The reasoning behind this charge is because pets increase the normal wear and tear on an apartment, regardless of whether or not they do obvious damage.

If you decide to impose a pet owner fee, then keep it to a reasonable amount of $200 to $300 per year. You might also consider the type of pet your tenant owns and adjust accordingly. A small cat is not likely to cause as much wear and tear as a large dog.

However you decide to structure your pet fee, be sure to articulate it within your lease’s Pet Policy.

Note: Pet fees are not considered legal in every state. Research state specific laws prior to adding a pet fee to your lease terms.

Utility Connection Fee

Who pays for utilities in your rental property—you or your tenant Covering the cost of utilities could allow you to justify having a higher rent price and attract Gen Z renters who would rather not deal with monthly utility bills. However, managing utilities for your tenants also comes with additional responsibilities and oversight.

Which utilities you cover (if any) likely depends on the type of rental property you lease and what you can reasonably afford. In multi-family units, apartment complexes, or townhouses, it may make more sense for landlords to pay for:

  • Water
  • Trash
  • Sewer

These utilities are assessed to the complex as a whole. Landlords may opt to cover the bills themselves, pass the cost through to the tenant, or charge for water beyond “normal usage.”

Tenants are typically required to set up their own accounts and pay bills in their name for utilities such as:

  • Gas
  • Electric
  • Cable
  • Internet

Independent landlords who lease single-family rental properties might prefer the tenant to take over all the utilities in full, considering that the average annual energy bill for a single-family home costs $2,060.

During vacancies, some landlords disconnect utilities in an effort to minimize holding costs incurred mid turnover. In that case, once you find a tenant to fill the lease, you might consider re-establishing the utility service in your name—at least temporarily. Doing so might reduce vacancy by encouraging the tenant to move in quicker, knowing that the home is ready to be lived in.

Note: By law, landlords are required to provide livable conditions under the implied warranty of habitability, so be sure at least heat and water are available before the tenant moves in. If you incur a utility connection charge when re-establishing service, you may pass this onto the renter as part of your move-in fee.

Association Dues

Landlords who own rental properties within a Homeowners Association (HOA) likely pay dues or fees to maintain the common areas and cover the cost of landscaping. According to Realtor.com, the HOA fees for a typical, single-family home can cost $200 to $300 per month, depending on the size of the unit and the amenities.

The property owner may, in turn, pass these expenses to tenants either directly or indirectly by charging a higher rent price. However, if a tenant fails to pay the dues, then the HOA may foreclose on the property.

According to a SmartMove survey, 84% of landlords list payment problems as their top tenant concern. So, you might consider charging for association dues as part of the move-in fee upfront.

Non-Refundable Deposit

Sometimes, landlords may charge a non-refundable deposit included within the assessed move-in fee. This money may be applied to cover tenant turnover and property maintenance costs such as:

  • A fresh coat of paint
  • A change of locks
  • A new key fob for pool entry

A non-refundable deposit is at the landlord’s discretion, meaning you’re allowed to set the price of this move-in fee. However, in order to attract rental applicants and fill vacancies, landlords are encouraged to set fair fees. You don’t want to lose money or give profits away, but you also don’t want to request too large of a move-in fee that could deter prospective tenants.

What is a Security Deposit

A security deposit is one-time payment that is collected at the beginning of a lease and then used to cover any repairs due to damage caused by a tenant. At the end of the lease, a landlord must return the unused portion of the security deposit, up to the full amount.

However, not all deterioration can be deducted from a security deposit. At the end of a lease, it’s typical to have some normal wear and tear —such as chipped paint or faded floors—that is unavoidable when people live in your property. Security deposits cannot be used to cover such damage, which is referred to as “normal wear and tear” or “regular wear and tear” in common lease terms.

What is considered “normal wear and tear” should be discussed when a tenant signs a lease agreement with you. Cover all your bases by creating an air-tight policy that clearly defines your expectations for how your property should be maintained as well as which repairs you are responsible for and which fall on your tenant following a move-out inspection.

Landlords should take photos of any damage that the tenant may have caused during their tenancy. This provides documented evidence in case the tenant disputes your security deposit withholding.

Example Security Deposit Refund Form

Additionally, you and your tenant should conduct a walk-through at the beginning of the lease. Use a move-in checklist and document any existing damage. Having a list of issues before tenant move-in protects both parties; the tenant will not be held accountable from damage they didn’t cause, and you can see any damage you may have missed and repair it before it becomes a bigger problem.

How much can I charge for a security deposit

Landlords can set their own move-in fees, but security deposits are regulated by law. Each state has their own limit on how much you can charge for a security deposit, but it’s typically no more than two times the cost of the rent.

Some states split the deposit into separate tiers depending on whether the unit is furnished or unfurnished, or may base their legal limit on the age of the renter. In roughly 20 states, there is no legal limit on the amount a landlord can charge for a security deposit—but that doesn’t mean you should be overzealous with the price you set. Doing so could deter renters and increase your vacancy rate, which can devastate your business.

Pro-tip: Verify that there are no local rent regulation rules which could affect your security deposit limit. If you accidentally overcharge or refund the deposit incorrectly, you could end up with a costly lawsuit that might be settled in the tenant’s favor.

No matter what amount you charge for a security deposit, make sure you follow all state-specific regulations regarding how you may store the funds. According to the IRS, you may not include a security deposit as part of your income because you may be required to return it at the end of the lease.

Depending on state law, security deposits must be returned typically within 14-30 days of the lease end date. Make sure to keep up with all bookkeeping and maintain accounting records of all business funds that flow both in and out. Not only does this help you follow the law in terms of security deposits, but it also may benefit you come tax season if you choose to deduct repair expenses from your rental income.

Note: States also have unique laws pertaining to how a security deposit can be used and which expenses may be deducted from the tenant’s payment. For example, landlords in Wisconsin are not allowed to retain a tenant’s deposit funds to cover carpet cleaning. Do your research and consult legal counsel before withholding any funds from a departing tenant.

Connect with Home-Solutions experts for personalized guidance on managing move-in fees and security deposits. Check our solutions for property owners. We’ve been doing this a while so you don’t have to. Call us today at (954) 545-3027 and follow us on Instagram @homesolutionspm.

Reference: [https://www.mysmartmove.com/blog/move-in-fees-vs-security-deposit]

5 Key Applicant Red Flags to Watch For

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Finding the perfect tenant feels like striking gold, but choosing the wrong one can lead to headaches you don’t need. As a landlord, it’s helpful to know how to tell if a tenant plans to not pay rent. Being on the lookout for these renter non-payment warning signs can help you protect your investment.

You’re not a fortune teller. But as an independent landlord looking to find great tenants, you must act as your own crystal ball when screening new renters. Every prospective rental applicant you talk to has a different story and situation. It’s up to you to ask the right questions, get the right paperwork, and check a person’s background history to fill in any murky bits.

Losing thousands—or even tens of thousands—to rent non-payment and eviction proceedings can utterly destroy your rental business. To protect your livelihood, it’s essential to know what non-payment warning signs to look for in rental applicants and thoroughly screen all potential tenants through a reputable service like SmartMove.

No matter who you end up renting to, look out for these five renter red flags. Without due diligence and comprehensive background checks, you could see yourself in a future with desperately empty pockets.

1. Past Evictions

According to The Economist, the U.S. sees at least . Although personal circumstances and backgrounds may vary, the best predictor of a future eviction is a past eviction.

In fact, renters who have a previous eviction history have 3x as many rental-related collection records as people who have never been evicted. With those statistics, it’s no wonder that a recent SmartMove study ranks rent nonpayment as the biggest fear of independent landlords.

If you’re not checking a rental applicant’s eviction history, you’re putting yourself at unnecessary risk. To help protect yourself from the beginning, start with good rental applicant screening.

Along with every deep-dive past eviction check, SmartMove includes a proprietary ResidentScore, which is designed specifically for renters and is more relevant than a traditional credit score when it comes to leasing decisions. TransUnion data shows that using SmartMove to screen your rental applicant gives you a 15% better chance at predicting if you’ll have to evict them sometime in the future.

2. Not Enough Income

If your tenant has insufficient income, chances are they’ll struggle to pay rent. But, how much should you charge in the first place? Finding the rental sweet spot involves two major responsibilities:

Set an Ideal Rental Rate

Setting a bad rental rate can wreak havoc on your property investment. Too high and you risk prolonging tenant vacancies. Too low, and your profits drop off into the abyss. At the moment, rents are skyrocketing in much of the country, but that doesn’t always mean raising them is the best solution for you.

As a landlord, it’s essential to know how much to charge for rent by looking at comps in the local property market, reviewing your unit’s amenities, and looking into average income in your area.

Verify Your Rental Applicant Has Sufficient Income

Rental business success hinges on finding the balance of the right tenants at the right price. Once you set your rental rate, you need to confirm your potential tenant can pay—both now and in the future. Make sure your rental applicant earns 2.5x to 3x or more income than the rental rate you’re asking.

  • Example: If you charge $1,000 in rent, your tenant should earn at least $2,500 – $3,000.

There are many ways to verify a potential tenant’s income, including paystubs, tax returns, and employer letters. However, be cautious with any materials provided by the applicant directly, as documents can be forged.

For example, an Income Insights report evaluates your rental applicant’s financial strength and lets you know if you should ask your prospective tenants for additional income proof.

3. A Criminal Record

Failing to check a rental applicant’s relevant criminal past before signing a lease not only puts you at legal risk, but it could wind up harming your property, other tenants, and the community as a whole.

According to TransUnion data, 1 in 5 renters screened had a criminal record hit on their online background check. With such a high prevalence of positive results, it’s imperative to screen every renter to get a fuller picture of their past.

Evidence of a criminal past may seem foreboding when you’re screening potential tenants. However, not every arrest or conviction is relevant to the person’s ability to be a great, responsible tenant. If you have doubts, its best to talk with your rental applicant to get a better idea of how their past may actually affect the future success of your rental property.

How to Search a Rental Applicant’s Criminal Record

It’s tempting to search your applicant’s name in Google, social media pages, or a public records finder, but that could be setting yourself up for a lawsuit, depending on your state. For instance, in California, it’s illegal to use someone’s driver’s license or date of birth to search criminal records.

Additionally, tenant screening reports like criminal background or tenant credit checks can include data protected by the federal Fair Credit Reporting Act (FCRA). This means that only certain individuals are legally allowed to access protected data—and only under specific circumstances.

Rather than risk expensive, stressful legal trouble by attempting self-performed tenant screening, use a well-established, FCRA-compliant rental background check provider like SmartMove.

4. Bad References

How your rental applicant acted in the past can be an eye-opening insight into how they might act in the future. By failing to check the rental applicant’s references, you may fail to protect your property and income.

Learn how to conduct landlord reference checks and ask about the following:

  • Percentage of security deposit not returned
  • Any late payments
  • Early termination of lease

Honest feedback from your tenant’s previous landlords can reveal additional red flags that may not show up on online background checks, credit reports, or other tenant screening. While there are specific questions you may not be legally allowed to ask about prospective renters, making smart inquiries allows landlords to discuss payment activity, security deposit amounts, leasing terms, and whether the lease was broken.

If you really like your hopeful renter, but their rental reference is less than glowing, get their side of the story. For example, if a previous landlord failed to keep the unit at “habitable” levels, the tenant could’ve been legally allowed to break the lease early.

5. Doesn’t Want to Fill Out a Rental Application

This final red flag is one of the most crucial documents to collect from any potential tenant. Rental applications contain important personal information that’s essential for landlord-tenant relationships and can also help verify your applicant is who they say they are.

Know what questions to ask on your rental application to help identify great renters. At minimum, your application should include the following:

  • Personal information and contact details for all prospective tenants in the unit
  • Employment, income, and credit information
  • Rental history, including dates, manager contact information, and any evictions
  • Relevant criminal history
  • Details about any pets and smoking status

If your potential tenant provides an incomplete application or provides excuses to avoid the process entirely, it could indicate potentially sinister intentions. Most qualified tenants understand that part of renting involves an application and are happy to hand over personal information to move forward in the selection process.

Someone who tries to go around attempts to verify employment, credit, and references might be hiding something that could knock them out of the running. Getting a complete rental application, along with SmartMove online background checks, can help you choose the best tenants possible for your particular rental unit.

SmartMove Online Background Checks Give You Confidence that Your Tenant Applicant is the Right Renter for Your Property

You’re not a mind reader. You can’t know what’s really going through a rental applicant’s head when they’re eyeing your property. Knowing what renter flags to watch for can certainly help prevent nonpayment. However, it’s essential to further cut through leasing uncertainty with high-quality hard data from tenant background checks with SmartMove.

With just your rental applicant’s email address, SmartMove delivers thorough, consent-driven credit, criminal and ID-verified reports instantly. All FCRA-compliant background checks are designed specifically for independent landlords with data backed by TransUnion, a major credit agency.

Convenient, affordable reports can help you decide which red flags are a real warning, and which ones aren’t worth the worry. Income Insights and a ResidentScore can help predict a tenant’s ability to pay rent. Eviction reports and criminal history provide greater insight into your rental applicant’s background, so you that you can feel more confident in your leasing decisions.

You might not be able to see the future, but you can help steer it in the right direction with fast, high-quality tenant screening from SmartMove.

Streamline your tenant screening process and boost your confidence with Home-Solutions! Check our solutions for property owners. Call us today at (954) 545-3027 and follow us on Instagram @homesolutionspm.

Reference: [https://www.mysmartmove.com/blog/five-red-flags-that-a-renter-might-stop-payent-rent]

The Ultimate Guide to Property Maintenance

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Owning a rental property can be a dream come true – a stable income stream, a valuable asset, and the satisfaction of providing a comfortable home for others. But let’s be honest, it can also be a source of major stress. This guide is your one-stop shop for everything you need to know about keeping your rental property in tip-top shape.

How to Properly Maintain Your Rental Property

One of the biggest landlord responsibilities facing any property owner is rental maintenance. In fact, in a national survey conducted by SmartMove, rental maintenance was ranked as the third biggest “pain point” for landlords after loss in rental income and uncooperative tenants.

That’s not surprising. Rental property maintenance requires year-round vigilance, representing a significant amount of time and money. However, landlords can avoid the “pain points” if they follow some simple rules, stay organized and budget accordingly. Below we talk about some of the strategies for managing rental maintenance.

Regular Maintenance

Some rental maintenance issues, such as a leaky faucet, often can’t be anticipated or avoided. Other issues can be addressed before they become serious problems by following a regular maintenance schedule. These are the items that should be checked on a regular basis, whether weekly, monthly or annually, such as a yearly furnace inspection. Regular maintenance isn’t just about avoiding costly repairs but ensuring a pleasant living environment for tenants.

The rental property maintenance checklist below is not meant to be exhaustive. Each landlord will need to tailor a regular rental maintenance schedule based on his or her property.  Here are some examples of items that many good landlords do regularly.

  1. Check for leaks, especially following strong rainstorms or after significant snowmelt. Water damage is the enemy of every landlord.
  2. Replace air filters frequently.
  3. Test smoke and carbon monoxide detectors regularly.
  4. Check for pests quarterly if not monthly.
  5. Re-caulk showers and bathtubs to prevent mold and leaks.
  6. Tighten any handles, knobs, locks, faucets, etc.
  7. Check fire extinguishers.
  8. Flush water heater.
  9. Clean gutters.
  10. Trim or remove trees on the property threatening power lines or structures.

Landlords should also create rental maintenance schedules for bigger ticket projects, or capital expenditures, such as replacing carpets or repainting walls. The schedule will depend on the general wear-and-tear on each individual unit, but professional property managers recommend doing these sorts of projects (i.e., interior painting, carpet replacement) about every three years unless needed sooner.

Regular Inspections

One of the keys to maintaining your unit is to conduct rental property inspections  on a regular basis. There are four types of inspections landlords can do to help ensure their properties stay in tiptop shape.

  1. Move-in Inspection: This walk-through inspection is typically done with the tenant. This provides an opportunity for the tenant to identify any concerns and for the landlord to document the condition of the property when it was turned over.
  2. Routine Inspection: Landlords should schedule regular inspections of the property with the tenant, ideally on a quarterly basis. A landlord should provide prior notification before entering the property; often the terms of the lease will specify the particulars regarding these visits, or local law will. This is an opportunity for the landlord to identify maintenance issues or for the tenant to discuss any problems such as that leaky faucet.
  3. Drive-by Inspection: Routinely stopping by the unit to observe its outside condition can help spot issues such as the unauthorized presence of a pet.
  4. Move-out Inspection: As the name implies, this inspection comes when the tenant moves out. This inspection is not only the time to identify any damage a tenant may have caused but for the landlord to note what normal wear-and-tear repairs or maintenance issues may need to be addressed before the unit is rented out again.

Rental Property Maintenance Expenses

Determining how much money to allocate for rental property maintenance expenses can be tricky. Many professional property managers use what they call the 1% Rule: One percent of the total property value should be set aside to address rental maintenance expenses. Following this rule, a rental property valued at $200,000 would have a $2,000 annual budget line item for maintenance expenses.

Keep in mind this is only a rule of thumb. Factors such as the age of the property or cost of living in the area may require a larger or smaller annual budget for rental property maintenance expenses.

To account for large capital expenditures, such as a new roof, you may want to apply a different formula: the 50% Rule. This model suggests that half of all rental property income should be used for operating costs, which includes not only rental maintenance and repairs but also things like taxes, insurance, fixed fees and an escrow account for big-ticket expenses like a new roof. That means a landlord who rents a property for $1,500 per month would squirrel away $750 for rental maintenance and operating expenses.

To DIY or Hire A Professional?

A rental maintenance budget will also depend on whether a landlord opts to personally do most of the maintenance or hire the service to a contractor(s). The landlord should do an honest assessment of his or her skills and availability before making this decision. While it is certainly tempting to save money and go the do-it-yourself (DIY) route on rental maintenance, a landlord may find that his or her time is better spent on other parts of the rental management business.

Keep in mind that rental maintenance requires a varied skill set, from plumbing to electrical, and the ability to troubleshoot problems. Service calls can come at any time day or night. A landlord who chooses to do rental maintenance directly should be prepared for all eventualities.

Landlords should also remember that a tenant doesn’t care how much money a landlord might save in expenses by doing the work himself or herself. One of the leading causes of tenant turnover cited by renters as to why they didn’t renew a lease is poor maintenance. Maintenance should also be completed as soon as possible, as some tenants might try to make the necessary repairs themselves, which could cause additional problems, or even withhold rental until the issue is resolved. And renters could even call local housing authorities to inspect a property they feel is poorly maintained and unsafe.

There are plenty of options out there for landlords who need maintenance help. Websites like Thumbtack match professionals to those in need of services such as carpet installation and interior painting. Other companies like American Home Shield offer warranties on major appliances and systems such as furnaces and HVAC for a monthly paid subscription. Each service call is then charged a flat fee, with a guarantee to either repair or replace the item under warranty.

Doing Rental Maintenance Helps to Have Happy Tenants

Andrew Syrios, a real estate investor in Kansas City whose company owns more than 500 units in four states, maintains that good property management boils down to good rental maintenance.

As a way to keep your good tenants happy, landlords should consider it very important to conduct routine maintenance and inspections, as well as make timely repairs when needed.  “Maintenance is the face of your company, and good maintenance is the best form of tenant retention there is,” he writes on BiggerPockets. “Many tenants are used to poor quality service, so if they come to your place and get good service, it substantially increases the chance that they will want to continue renting from you.”

Be sure to follow up on maintenance calls, Syrios advises, with perhaps a short survey or phone call to determine if the tenant is satisfied with the work. It is also a good idea to document any service calls with notes and pictures before and after any maintenance work.

Good rental maintenance should really start with the tenant screening process. A responsible renter, with a good credit history and strong references, is more likely to take care of a property. That’s where TransUnion SmartMove can really pay off with its comprehensive screening process. SmartMove reports include a credit report for renters, a tenant background check report, and renter eviction history.

Follow these suggestions and rental maintenance doesn’t have to a “pain point” for landlords but a point of pride and a way to retain good tenants.

Good Start With a Tenant

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When you take over a new rental property with an existing lease and tenants, you will want to establish contact with those tenants. Follow these suggestions for creating a memorable letter that contains helpful information for your tenants and get the management of your new property started on the right foot.

Get off to a good start with a tenant welcome letter

A welcome letter goes a long way toward getting off on the right food with a new tenant. Follow these suggestions for creating a memorable letter that contains helpful information for your tenants.

To properly start off a relationship with your tenants and to show you’re a professional landlord, it’s a good idea to send a tenant welcome letter. Doing so sets a positive tone and can help you and your tenant work together to successfully address any issues that might later arise.

Sending a “welcome to the neighborhood” letter is also practical because you can include information about moving in. Send the letter by post or email a few weeks before the move-in date and leave a copy in the apartment for the tenant’s arrival.

Contents of a tenant welcome letter

A tenant welcome letter provides an informal way for a landlord to say hello or a more formal way to provide helpful information. The document can refer to a list of apartment rules and regulations and include a checklist of the unit’s move-in condition.

A comprehensive letter can include some or all of the following:

  1. A welcome to the apartment and the neighborhood. This should sound friendly, with the hope that the tenants will enjoy living in the building.
  2. The managing agent’s and your contact information. Include phone numbers, addresses, email addresses, and the hours the office is open.
  3. Enclosures or attachments to the letter. Provide copies of the lease, apartment rules and regulations, and the moving-in checklist.
  4. The rent due date. List the amount of rent, if desired, and whether the tenant can mail it, drop it off, or pay it online. Also let the tenant know about any late fees.
  5. How to obtain keys to the unit. If the landlord will not be at the unit during move-in, explain how the tenant can get the keys, such as picking them up at the office. Also list how much it costs to replace lost keys.
  6. Information about utilities. Remind the tenants which utilities are and are not included in rent payments. For those utilities that are not included, provide a list of local providers, such as the area’s cable or internet service, telephone service, electric and gas or oil service, and water company. Explain when the city collects garbage and recyclables, where the tenants need to leave them, and any related rules, such as a prohibition on satellite dishes.
  7. How to request repairs. Let the tenants know how to request repairs and that they should send the request as soon as there’s an issue. Also provide information about emergencies, such as calling you immediately but following up with a written request.
  8. Rules and regulations. This includes apartment noise rules, laundry room information, and apartment pet rules. Other subjects you may want to address include your policy about having guests, candles or incense, smoking, and giving strangers the keys. Be thorough so that there is no confusion later on.
  9. Parking information. Let the tenant know where their designated space is in your parking lot, if applicable. If parking does not come with the unit, refer the tenant to the city clerk for street parking information; otherwise, they may try to hold you responsible if you provide incorrect information and they get a ticket or their car gets towed. Also, be sure to provide parking information for move-in, such as not blocking certain entrances.
  10. A request that the tenants provide their contact information as soon as possible. You don’t want to be caught in a situation where you need to get a hold of your tenant immediately and don’t know how to reach them.
  11. Advice to get renters’ insurance. Explain that, while you have insurance on the building, it doesn’t cover the tenant’s personal belongings.
  12. A reminder to keep the premises in good condition. Make sure they know it is their responsibility to keep the apartment sanitary and clean.
  13. How to resolve a conflict with a neighbor. If there’s noise or another concern, you may want to have the tenant first try to resolve it on their own but contact you if the situation doesn’t improve.
  14. A request to return the move-in checklist. Let them know when they need to return it by and whether you’re going to have a walk-through inspection upon their moving in.

Other ways to welcome tenants

You can provide a small gift to the tenants, such as a bucket with some cleaning supplies or mugs with the city’s name. While this isn’t necessary, a small token goes a long way toward creating a solid relationship between you and your tenants, as landlord-tenant relationships are sometimes strained. A strained relationship creates havoc, causes tenants to break leases, and may even require court intervention.

Sending a welcome letter begins a good relationship between you and your tenants, which can help ensure a positive experience throughout the term of the tenancy, including when they move out. If you need help drafting a welcome letter, let an online service provider create one for you.

Your property deserves the best. Home Solutions offers top-tier property management services to protect and enhance your investment. Call us today at (954) 545-3027 and follow us on Instagram @homesolutionspm.

Reference: [https://www.legalzoom.com/articles/get-off-to-a-good-start-with-a-tenant-welcome-letter]

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