A lease agreement is a legally binding document that will provide answers to all the questions your renters might have. For instance, it will point out:
Whether or not renters can make alterations to the property
How much you plan to charge for the monthly rent
Details regarding security deposits
Expectations for rent increases
Dates of occupancy
The notice period
If pets are allowed.
The internet is full of downloadable templates for this crucial document, but you should have one prepared by your preferred DFW property management company. The experts are more familiar with the laws governing rental property in the DFW rental market, and they are better placed to guide you than a prefabricated download.
Dive Into the Right Rental Research
What's the makeup of the neighborhood?
How are comparable rental properties in your area?
Are you located in a residential area or near a college or university?
Should you make any updates to your rental homes to stay competitive?
Answering these questions will help you determine your rental property’s price point in DFW and decide on the type of updates you may want to make to stay competitive. For instance, you might want to furnish your investment property if it is near a college or university. This will make it appealing to students if that's how you plan to direct your marketing budget.
Make Tenant Screening Crucial
Screening your potential renters is your best defense against problematic issues. For the screening process to be effective, you will need to be clear on what characteristics you are looking for right from the start. If possible, list these traits on your rental listing.
Income verification and credit check: You need to verify that your potential renters can afford your property’s monthly rent. Pay stubs and bank statements are an easy way of establishing that a person is financially stable. You will also need to establish their creditworthiness by reviewing their credit history.
Criminal background checks: As an investor, it's worth understanding who can rent your property when it comes to its proximity to public features like schools. Persons with a history of assault, domestic violence, or sexual assault in the past seven years are not ideal candidates for your property. However, this can get tricky—so it's best to work with an attorney or property manager.
Rental history and reference checks: This helps shed more light on how potential renters will treat you, your property, and those around them. If an applicant has no rental history, ask them for professional references—and verify them.
Plan for Emergencies
It’s inevitable that you will incur expenses on repairs and renovations for your rental property. You'll need to work with your DFW property management team to design a budget that prepares you for emergency repairs.
Make sure your residents know what to do and whom to contact in case of an emergency. You can also do your part to include renters insurance as a critical component of your lease agreement.
Insure Your Rental Property
An insurance policy as a property owner covers you against property damage, liability, and in some cases, loss of rental income. Depending on your rental property’s location in DFW, you may also want to obtain additional coverage for flooding.
Investing in real estate is as rewarding as it is challenging. Having a profitable property in a prime location and pricing the rental units reasonably is only part of the game.
Following the above tips will help you avoid pitfalls that often come about as a first-time investor. However, it's not the only way to begin investing successfully! Learn more useful tips with your free copy of Protecting Your Investment Property: A Guide.