One of the first steps to putting the right protections in place—even if it seems like a simple thing—is to choose a business entity for your income property business. If you've never owned rental property before, it may not feel like a business yet. However, once you're charging rent and paying expenses, it will become a business real fast!
If you've been doing business as a sole proprietor for a while now, you might quickly realize that you'd like more of the tax protections and optimization that come from a different business entity. However, it's never too late to re-evaluate and modify your business to fit the structure that suits you best.
Property owners also cannot afford to launch a property business without excellent landlord insurance. Requiring renters insurance from your renters can protect you from some liability for their possessions, but having the right landlord policies for investment properties is also crucial. Imagine someone getting hurt on your property due to an overlooked repair deemed to be your responsibility. A property owner needs to know that they have a trusted insurance contact who can help settle any issues without developing a reputation for negligence.
No other piece of documentation affects your rental relationship as much as the excellent lease contract you draw up for your renters. Think about it: if your lease agreement doesn't expressly forbid a particular action and contains a loophole, you may have very little recourse for removing a troublesome renter. That's why working with one of the best property management companies in Seattle is a great asset at this stage; your lease should be an airtight document, and they've seen the most common loopholes. In addition, they can help you rewrite and revamp an existing lease agreement template into the perfect fit for your next lease term.
When it comes to protecting your investment through the terms of the lease, make sure you don't skip the property inspection details. Real estate investors find it easier to schedule inspections with renters when the details are outlined in the rental agreement. Renters will also be motivated to take better care of the property, knowing that you conduct inspections during their lease term. Your property investment lasts longer when renters take good care of the property, and this starts with a robust schedule and plan for inspecting and evaluating each property in your real estate portfolio.
Once you have a signed lease, it's more important than you might think that you enforce the terms of the lease. Being flexible may feel like the right call on small things. Still, being a firm property owner who consistently enforces the lease across all tenants and properties can help you avoid more significant issues down the road, including complaints from residents!
Excellent renters can be hard to find (and keep)! However, being an excellent landlord, making smart property upgrades, and keeping the property in excellent condition help improve tenant retention.
Early in your journey as a property owner, you may feel like your best choice is to add as many bells and whistles as possible to your rentals, drawing in great renters who are interested in these features. However, having to maintain too many complicated or unnecessary additions and upgrades at a high level may quickly cost more than it brings in when it comes to setting the rental rate.
Instead, an experienced Seattle, Washington property manager can weigh in on the upgrades that will really add value long-term while lowering expenses over time. Property managers need low-maintenance additions that make a rental look good and hold up over time, saving you time and expense.
Upgrades are just part of the equation: what really keeps great renters is often the basics that happen behind the scenes. For instance, when you take a proactive approach to budgeting for maintenance, your renters don't see constant breaks and problems that they must frequently put in as maintenance requests. Instead, they know that you are thinking ahead and getting systems in the rental checked out before there is ever a problem.
Property managers can be particularly helpful in this regard, with their experience inspecting and maintaining rental properties in the Seattle area. They can help you set up a schedule for when to schedule repair and maintenance professionals to conduct routine maintenance throughout the year.
From keeping up with maintenance to communicating well, being a great property owner helps you find and retain the best renters! In addition, finding ways to help residents feel appreciated, from discounts on rent for renewing the lease to proactive and thoughtful gestures throughout the lease term, builds good relationships. Anyone who has experienced challenging renters will know how important it is to find and keep excellent renters long term.
While many renters follow the rules, property owners can still encounter challenging renters when operating rental properties. It's just something that happens!
When tenants violate the lease, it's essential to enforce the rules. For instance, if you have a renter you've vetted fully but are allowing more people to live in the rental than are on the lease, it's time to take action. This circumstance may seem harmless at first. However, allowing people to live in a rental unit without putting them through your standard screening process can lead to legal issues or other problems, including property damage or illegal activities in the home.
Of course, if your renter damages your property, you need to have a policy and procedure in place to swiftly address this concern and work out a plan for the tenant to cover costs for repairs. In many cases, damages are accidental, making it valuable to resolve the situation in a way that preserves a good relationship with your resident. However, if damages are malicious, property owners can work with a property management company to recover expenses or start the eviction process with bad tenants who break the lease.
Sometimes, unfortunately, a renter will simply not be the right fit for you and your property. Multiple lease violations and late or missing rent payments can result in asking a renter to leave on their own or the initiation of eviction proceedings.
Having a bad renter leave on their own is often the ideal solution. However, you may still have to deal with at least one more issue: protecting your investment also means handling any belongings they leave behind. In this situation, a real estate investor must try to reach the renter to get their items and talk to a lawyer about removing them legally. Then, once the situation has been resolved properly, it's time to look for that next renter.
Protecting your investment starts before you buy a property and lasts through your many choices as a property owner for as long as you operate the rental! However, one of the most valuable ways to protect your investment is to invest in professional property management services.
A property manager has the knowledge and experience investors need to make smart decisions from buying a property to setting up the right insurance policies and business entity. Working with Seattle, Washington property management experts also gives you access to people who have seen the red flags that indicate troublesome renters and keep them out of your rental property.
Bellevue property managers have worked through the policies that should be in a lease, and they know how to explain them well to rental applicants then enforce the rules. They even know how to help you make great choices for practical upgrades to your property that can sustain your investment over time.
Working with the best property management company Seattle has to offer is one of the many ways that you can protect your investment from the risks associated with rental properties! We hope this information has been helpful. If you'd like more experts insights into reducing risks for your investment properties, download our free resource, "Protecting Your Investment Property: A Guide." Then, if you'd like to learn more about full-service property management, reach out to our Real Property Associates team!
