Tenants

/Creating Wealth by Robert G Allen/

How to find a good management company
Look in the yellow pages under "Real Estate Management" and follow two basic rules:

1. Don't ever believe a word the management company says, or anything you read in the monthly reports it gives you. Question every number. Don't let the company spend more than $500 without your OK. Ask it about vacancies, since every vacant day costs you money. Look at the ads it runs to attract new tenants.
   
2. Inspect your property at least once every month.Just walk through and see if the unit is vacant or rented. And see if the tenant is the kind of person you want living in your property. The inspection can be a regular day of the month, so the tenant can prepare. You can learn a lot about your management company from your tenants.
   

Tenant Selection
The key to any good management system is finding good tenants.

Take an application from every prospective tenant. Credit references. Job information. Present ans previous addresses.
The tenant fills out the application and leaves a small deposit.
Make calls to verify employment. Call to previous landlords.
All of this takes an hour or so. You should check out each item on the applicant and inform the prospective tenant of your decision within a day or two.

• Deposit - A must
  Try to get the first and last months' rent and a security/clearing deposit equal to at least half a month's rent. The deposit is never to be applied to rent. There are always minor repairs to make when a tenant moves out, and you may have to take care of the tenant's unpaid utility bills out of your own pocket. For this reason, return a tenant's deposit 15-30 days after he vacates.
  
  
• Property Inspection
  You should inspect the property before, during, and after a tenant's stay. The tenant should be present each time. Before he moves in, walk through and fill out a property-inspection form. This protects both of you if a dispute should arise concerning who is responsible for damage. It will save you many a trip to small claims court.
  During the tenant's stay, make regular inspections, perhaps around rent-collection time.
  
  
• Discount Rent Program
  A prospective tenant would be told that the rent would be $100 less upon two conditions:
  1) Rent is due on time. Part of the discount is for prompt payment. If the rent is late, the discount doesn't apply.
  2) The tenant will do all minor repairs and pay up to $50 in cost of materials per month.
  
  
• Utilities
  A tenant has to pay all utilities.This way he deals directly with the utility company and bears the brunt of all increases.
  In single-houses rentals tenants take care of the yard also. You can offer to cut the lawn for them for a $20 fee every two weeks, but they usually decline (good).
  

Happy landlording!