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Residential Property Management Tips to Maximize Profit
Practicing good residential property management skills can save you money, time and lower your liability risk. LandLordStation.com offers information and discussions that will maximize your profit and minimize your liability. In addition, we offer services from tenant screening to rent collection and records storage for full-service assistance.
Carnahan Property Management offers a variety of articles that include top property management tips. We provide information including the following important facts to remember:
- Use a lease form that is specific to the state in which the property is located. The “standard” forms that are available for sale are generic forms that usually don’t conform to local and state laws. Do your research and develop a lease form that includes all the provisions you want and includes the provisions required by state and local law.
- If you make a promise to a tenant, make sure you keep that promise in a timely fashion. For example, if you promise a tenant cable service or a reserved parking space, make sure that you provide those things when the tenant takes possession. To delay on a promise to a tenant can cause a tenant to legally break your lease. This mistake can cost you both time and money. See our article about Landlord Responsibilities.
- Make sure that you specify the amount of any fees in your lease agreement. That includes pet fees, late fees and any other fees you charge. Make sure that the fees you charge are not excessive and do not violate the laws of your state. Many states and cities have a cap on fee amounts that can be charged to tenants and to require more than that cap amount is unlawful.
- Do not misuse or mishandle security deposits. Every state requires that security deposits be placed in a separate escrow account and may not be used by the landlord unless specifically stated in the lease. The basic rule is that deposits should be used to only cover damage beyond ordinary wear and tear (as defined by your state law), for cleaning and for unpaid rent. Some residential property managers have faced criminal prosecution for using security deposits improperly and not refunding them as required by the terms of the lease. Security deposits are the most frequently filed cases against landlords in small claims courts. Your state will also have laws pertaining to the type of escrow account in which the money must be kept. If your state allows an interest bearing escrow account, be sure to familiarize yourself with the provisions that set forth who is entitled to the interest. When the lease has been fulfilled and the tenant has moved out, send the tenant an itemized list of amounts that were deducted from the security deposit and return the balance. Most states have a 30-day requirement for this action. If the landlord appears to deliberately or in bad faith refuse to comply with the state time limit, the court will often award the tenant an amount 5 to even 10 times the amount of the original security deposit and order the landlord to pay that amount regardless of any damages to the property. It is also advisable to take photos of any damages for your records. See the article at LandLordStation.com regarding landlord tenant disputes.
- Although LandLordStation.com can effectively screen your tenants with a background check and give you the needed information to select good prospective applicants, be careful about the questions you ask when you are talking to potential tenants. There are limits to what you can ask applicants in an interview. Even well-meaning questions can be illegal. For example, don’t ask a disabled person about his or her disability or ask if a couple is married. If you decide not to rent to an applicant, even though your rejection has nothing to do with the question you asked, that applicant can file a fair housing complaint and you can be charged. See our article, How to Screen Tenants.
- Even if you want to limit your tenants to mature adults, excluding families is illegal. Although you’re permitted to limit the number of residents in a unit (in most situations, two occupants per bedroom), you may not apply that standard differently when dealing with families and children. The cost of this mistake can be a fair housing complaint and a hefty fine. Be sure to set your policies prior to showing a property and apply those policies in a fair manner for all applicants.
- Do not ignore dangerous conditions in and around your rental property. Laws in every state require that housing meet basic health and safety standards that comply with state and local building codes, health ordinances and landlord-tenant laws. If you fail to repair or remedy any unsafe conditions within a timely manner, a tenant can break the lease and, in many courts, be entitled to a money award from the landlord. See our article on How to Be a Good Landlord.
As you can see, residential property management requires diligence and effort on your part. After using the tenant screening process to select the best possible tenants, and after allowing them to take possession of your property, it is important to take every action to treat them fairly and honestly. It is easy to learn how to be a good landlord when you use the property management tips from Carnahan Property Management. We offer property management information, and we have friendly and knowledgeable customer care specialists to answer your questions, tips for property managers and give you other residential property management assistance to benefit your bottom line and make property management a profitable venture.
