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General rules to follow for an efficient and fire hazard free dryer:
1. Clean the lint trap screen after each dryer cycle.
2. Wash the lint trap screen after 20-30 loads. Let it air dry before replacing.
3. Use a vacuum hose to suck out any remaining lint inside the dryer where the lint trap is stored.
Property owners are always looking for ways to find more tenants and to keep them once they have them. But another really important aspect of finding tenants is finding honest renters.
There is nothing worse than having a full house of tenants when they are dishonest because it just brings so much hassle onto you as a property owner. It is tempting to accept any would-be renter that shows interest in your property so that you can stay successful; however, it can be more trouble than it is worth. Read on to learn how to avoid dishonest renters!
Many property owners request references from potential tenants on their applications but rarely, if ever, actually go through with the reference check. But verifying them can actually be very enlightening for a property owner, regardless of if you have a good or bad feeling about the renter.
If you have a good feeling about the tenant, you can confirm the good vibes you are receiving from them very easily. If they pass the reference check, they are well on their way to showing that they are an honest renter. If you have a good feeling about a renter only to find that their reference check falls through, you can take a step back and re-evaluate. You can do further checks to see what else they might be being dishonest about and see if they can redeem themselves. Or you can stop there, the failure of their reference check enough to stop you from approving them. It can also give you a good gauge of how accurate your gut is, and by gut I mean your first impressions and instinctual feelingsyou feel about a potential renter.
If you have a bad feeling about the tenant, you can confirm your gut feelings, that churning in your stomach that starts when you think about renting to them. If they fail the reference check, that means your gut, and your instincts, were right and this person probably would have been a dishonest renter. However, if someone that gives you a bad feeling passes their reference check, especially with flying colors, you can give someone a second chance that you might have otherwise disregarded. Rather than losing a renter based on a faulty gut feeling, you might find a tenant that is a golden rather than a rotten egg. It is recommended that you pursue other options to check a potential renter’s honesty besides a credit check though, especially if you do have a bad feeling about them.
Passing a Reference Check
What does passing a reference check entail? You want to find people that really fit the demographic of your property and that will fit in well with your other tenants and the lifestyle you are hoping to provide for your tenants. By conducting reference checks, property owners can avoid costs and fees slapped on them caused by dishonest renters. You want to confirm that the renter provided correct information.
First, the potential renter should have provided all the necessary information and filled it out accurately. The references given should not be family members. Next, the phone numbers should work and not be dead-end numbers or belong to someone other than the person listed by the renter as their point of reference.
Conducting a Reference Check
Right away when you speak to the reference provided to you by the potential renter, identify yourself, your title, and organization name. Be clear and open about why you are calling — for a reference for a potential renter you are considering. Be considerate and ask when would be a good time to talk and whether they would rather schedule a call at a later time. Make sure they recognize that you have the permission of the applicant to call and speak with them and that all responses will remain confidential. Give the reference time to respond to your queries. And be sure not cut them off or put words in their mouth while they are answering. Let them speak at their own pace.
You can ask them questions like how they are or were associated with the renter. Keep your questions appropriate and on topic and if an answer you receive is ambivalent, you can always ask followup questions to help you get a clearer idea of who the renter is as a person and if they are someone you want to get further involved with in business.
Especially if you have many potential renters, this is a good way to weed out which renters you want to continue to pursue. If a potential renter does not pass their reference check, do not let them rent from you. They have already shown themselves to be dishonest and will only continue to do so.
You don’t have to be the investor in the photo. Sure, doing anything for the first time can be a little stressful. And, it’s definitely a major investment to buy your first rental home. But, you really can make it happen without going into stress overload. Here are my top 5 tips to enjoy a successful and low stress first rental property investment.
Tip #1: Advice is OK, but Do Your Own Research
Take courses, read investment books, go to a seminar, or any other learning process that helps you to gain confidence to make decisions. I suggest that any books, courses or seminars be about how to select locations, value properties and evaluate the rental market. Your success will be based on your due diligence and most of all buying right in the right area.
Your first rental property investment is best done in your area of residence, where you know what’s going on economically. You want to know that the economy will support today’s decision into the future, as this isn’t a short term strategy. Understand who the major employers are, what drives people to move in or move away, and if things look good into the near future.
Tip #2: Don’t Just Rely on Real Estate Agents
Sure, now and then you can work with a real estate agent who handles foreclosures and get a good deal. Remember though that these will be “listed” foreclosures on the MLS, Multiple Listing Service. You and all of your competitor investors have access to the same information, so competition will likely drive up your cost of acquisition.
If you do your own marketing and locate motivated sellers, you have a greater chance of negotiation a good deal. Another approach is to work with an experienced real estate wholesaler. They are investors too, but they are experts and finding great deals that they can flip to rental property buyers at a below-market value price. Just check their references out and be sure they do know what they’re doing.
Tip #3: Know What Will Rent and for How Much
Check with property managers who handle single family homes. Go to the classifieds and check out what homes similar to the one you’re considering are renting for. Are the owners offering incentives like free months? This is usually a sign of a soft rental market or heavy competition, so you may want to try another neighborhood or property type.
Call on ads, drive around, talk to landlords as if you’re a tenant. The most important thing for you to know before the next tip is what you can reasonably and conservatively expect for rental income and low vacancy.
Tip #4: Get the Right Financing & Cash Flow
You need to know all of your costs, including estimating repairs and other maintenance costs. But, the mortgage is going to be your largest cash outlay, so it is your most important cost consideration. You’ll need to put 20% down or more in most cases. For a rental unit you may also pay a slightly higher mortgage interest rate. A great credit history helps in this regard.
Get a firm handle on all of your costs, then see what your mortgage payment with taxes and insurance escrowed will be. Let’s use an example of a $150,000 home with a $32,500 down payment and closing costs. If you can manage to clear even $250/month over cash out of pocket, your return on the actual cash invested is going to be around 9%.
Tip #5: Lock in Equity at the Closing Table
NEVER buy at retail market value. If you can’t get the home at a 10-20% discount to its current market value, don’t do the deal. You want to leave the closing table with that equity as either future profit or a cushion should you have to sell before your initially planned liquidation date.
If you’re going to work with a wholesaler who you may meet at a local investment club, be clear that you’ll want to see their valuation calcs and you’ll check them with your own. You give them your requirement. If it’s 15% below market value, then they will know what they have to deliver.
You’re in control here, and you don’t have to make a deal until you know it’s going to be a great investment.
Landlords come from all walks of life, and they can be pros or reluctant landlords who couldn’t sell their home. Whether you’re considering rental property investment, can’t sell and need to rent out your home and move, or you’re already a landlord, these five tips can help you sleep at night and keep a smile on your face on your way to the bank.
#1: The Right Rent
Take the time to study your area’s market rents and property types. Compare apples to apples, not apartments to single family homes. Call and ask about rents and features. Check the rental ads for promotions like free rent. A lot of this type of marketing may signal high vacancy rates. Be objective about your property’s features and location, and set a competitive rent rate. Being just 5% over market rates may still get you a tenant, but if it causes too much turnover you’ll lose that and more in lost rent between tenants.
#2: Be Legal
We don’t live in a simple world anymore, and landlord-tenant laws can be pretty complicated in many states. Even if you must get some legal advice from a real estate attorney, be sure that you’re using legal application and lease forms. They should be legal, but there will be room to draft them to favor your interests and protect your investment.
Misunderstandings cause a great deal of landlord-tenant stress, and using clearly worded and comprehensive leases can go a long way toward eliminating problems. When rent is due, what constitutes poor tenant behavior, and explaining the difference between “wear and tear” and damages are all important for a good relationship. It’s every bit as important for you to abide by the rules as it is for the tenant. If you legally must give notice before entry into the unit, do it the right way and with the right timing. When you don’t follow the lease, tenants don’t feel obligated to do so either.
#3: Screen, Screen … and Interview
Once that lease is signed, if you let the wrong tenant into your property it can be an expensive and painful process to get them out. You want to check their credit history, rental history, job and landlord references, and even do a criminal background check in most cases. Letting a previously convicted drug dealer into your property can create some major problems for you if they lapse into old habits. There are services that pull together these background and reference tasks, and you can find them online with a search, or there may be local companies.
Think back to the previous tip and be legal. Don’t ask for information you aren’t legally allowed to gather, or don’t ask questions that cross the line when it comes to anti-discrimination laws. This is another area where you may want some legal advice and a script for your interviews so you stay on the right side of the law. That said, if your gut is telling you that there’s something not quite right about a prospective tenant, especially in the interview, then you should reject them for any legal reason.
#4: Maintain for Comfort and Safety
The best way to avoid late night “no heat” calls is to have regular maintenance performed on heating and cooling systems. Maintain all of the equipment in your rental and you’ll have a happier tenant and fewer emergency repair visits. For safety, do regular checks of smoke and carbon monoxide detectors, even changing the batteries at your expense. On a side note, this is a great way to get access every three to four months to inspect for damage or problems when you’re doing a courtesy safety battery change.
#5: Make it a Home
Be nice to your tenants. Send them surveys or call them now and then to see if they’re happy or experiencing even minor problems. Be proactive and address their concerns. Whenever you can add a feature or amenity at reasonable cost, do that. When the end of their lease rolls around, you have two possible situations:
1. They give notice and move on to another rental, or
2. They make a rent concession necessary to keep them, or
3. They’re happy, and want to stay, even if you must do a minor rent increase.
The first two cost you money in lost rent and possibly rehab between tenants. The last one takes almost none of your time and keeps the cash flowing.
There are a lot of details involved in these five tips, but keeping them top-of-mind in all of your landlord activities will keep you in a better mood and add to your bank balance.
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