If you’re considering renting out your home or buying a piece of rental property, there are some things you should know about property management. DFW and the surrounding areas can be great places to own rental property if you know what you’re doing. Below are six things every property owner should know before they make the dive into property management.
- Know Local, State, and Federal Laws. Picture this: You find the perfect rental property in a well-maintained neighborhood with all the amenities. You sign all the papers and the property is yours! You put up a For Rent sign and wait for the applicants to roll in. But instead of applicants, you get a letter from your new Home Owners Association. It turns out that packet of HOA rules you skimmed through and signed has a clause saying they will only permit ten rental homes in the neighborhood, and your property would be number 11. Many landlords are surprised when they find out that an HOA can limit the number of renters. Unfortunately, HOA rules are just the tip of the iceberg when it comes to need-to-know laws. Violating the Fair Housing Act, for example, can land you a lawsuit, hefty penalties, and attorney fees on top of that. Getting into Ft. Worth property management means knowing all the rules and laws that apply to you, your property, and your tenants. Breaking a rule because you’re unaware will leave you in a tight spot, and could jeopardize your investment and your reputation.
- Understand the TRUE Cost of Property Management DFW. As we mentioned above, owning rental property in DFW can be a great investment. In fact, Business Insider recently named Dallas as one of the top places to buy rental property in the US. But before you buy, make sure you know all the costs that surround your new investment and only buy a property that will give you positive cash flow. If you plan on financing your rental property, then the rent you bring in needs to cover your mortgage, taxes, insurance, and fees. However, if your rental income only covers these items, your cash flow will still be negative. Why is that? You need to plan for regular maintenance and emergency maintenance, as well as turnover between tenants. Depending on the age of your house you should put aside 1-2 months worth of rent for yearly maintenance costs. An experienced Fort Worth property manager should be able to help you come up with an estimate of the cash you should have on hand and the positive cash flow you will need each month to make your investment successful.
- Treat Tenants Kindly. Property management DFW is easier and more successful when you have a good relationship with your tenants. When tenants feel disrespected or unheard by their landlords, they are more likely to move when their lease is over. Tenant turnover is time consuming, expensive, and in many cases could have been avoided with a better landlord-tenant relationship. One way to help is to make sure all policies and procedures are laid out clearly in the lease and followed closely by you and your property management team. Your tenant should never feel like you tell them one thing then do another, and you should leave emotion out of your interactions. Many landlords feel professional property managers can help this relationship a great deal because of the experience, professionalism, and promptness they offer.
- Be Proactive About Maintenance. There is no avoiding maintenance around your rental property, whether it is simply replacing air conditioning filters or replacing your whole AC system. Professional Ft. Worth property management knows from years of experience that the more proactive you are about maintenance, the longer your home’s systems will last, and the happier your tenants will be. For example, a yearly tune-up of your AC system costs between $80-$100 and could add years to the life of your system. It can cost $4,000 or more to replace the whole system. You can see how small yearly costs can save you thousands of dollars over the life of your property. Regular property inspections are a good idea for many reasons, but especially to identify ways you can be proactive about maintenance. An inspection will help you catch small issues your tenant may not notice, like a leaky pipe before it becomes water damage and mold. Proactive maintenance has the added benefit of showing your tenants that you care about your property and by extension, you care for them.
- Screen Every Tenant. Applicant screening is an easy step you can take to avoid turnovers and evictions. Every applicant over 18 should be thoroughly screened including a background check, credit check, and rental history. You should verify your potential tenant’s job status and income to ensure they can pay rent. Most professionals recommend a tenant’s rent payment be no more than a quarter of their monthly income. That means if they make $4,000 a month they can afford $1,000 for rent. Never make the mistake of renting to a tenant who refuses to let you screen them, or is unwilling to give references or rental history. These tenants quickly lead to unpaid rent and evictions. In the long run, it is worth it to wait a few more weeks for a qualified tenant than bet on one who is unqualified.
- Know When to Ask for Help. When it comes to property management, DFW landlords need to know when to hire professionals. Being a DIY landlord can work out for some people, but often property owners make mistakes that can put their investment at risk. When hiring residential property management, Fort Worth landlords not only get someone who will handle the day-to-day activities of running a property, they get the years of experience and wisdom that entails. If property management is not your full-time job, you cannot be expected to know the ins-and-outs of Federal Housing laws, maintenance and inspection schedules, and what to do to avoid an eviction. Many property owners are surprised to learn that they profit more after they hire a full-service property management company, even after they pay management fees. Professional property managers know how to cut costs without cutting corners, making your investment into a success.
If you want to know more about hiring a full-service, professional property management company, call Specialized Property Management Fort Worth today.