Operating a 'for rent by owner' property has plenty of benefits. You have complete control over all the operations, from tenant screening to rent collection and property maintenance. And since you don't have to pay anyone for property management services, you're able to maximize your rental income.
However, being a DIY landlord isn't always an easy job. A lot can go wrong, including struggling to find tenants and finding yourself on the wrong side of landlord-tenant laws.
To help you become a successful private landlord, we're sharing a few dos and don'ts for managing an FRBO property.
DO: Invest in Tenant Screening
A tenant can make your life as a landlord enjoyable or miserable. Tenant screening is what makes the difference.
Although the vast majority of renters are generally good tenants, you cannot assume that every tenant who occupies your property will be good.
Tenant screening enables you to look into a rental applicant's background. You'll scrutinize their credit and rental history, verify proof of income, and even call a few references to ensure everything checks out.
With a comprehensive comb through these details, you'll be in a strong position to select a tenant who's not likely to give you any trouble.
DON'T: Operate Without a Written Lease Agreement
If you've been in the property management game for a while, you know that the job involves dealing with a lot of paperwork. In your quest to reduce paperwork (and perhaps help the environment in the process), you might be tempted to do away with lease agreements.
That would be a terrible mistake! Not only will you be putting your investment property in danger, but you'll also be exposing yourself to legal liabilities.
The lease agreement spells out your rental rules, length of tenancy, and responsibilities. It also describes the rights and responsibilities of your tenant.
Although you can make an oral agreement for short-term or month-to-month leases, a written agreement is more enforceable.
DO: Honor Your Legal Responsibilities
You have duties such as rent collection and rental property accounting, but no one would care if you neglected those duties. You do, however, have legal responsibilities that you cannot neglect.
For example, property maintenance. Philadelphia law requires landlords to keep their properties in a habitable condition for tenants. This means staying on top of maintenance and responsibilities.
Failure to honor your legal responsibilities can get you sued by your tenants.
DON'T: Ignore Outsourcing
Landlords wear many hats, but you don't have to wear all of them. There are outsourcing services that can lighten your load. For example, you can outsource tenant screening, rental property accounting, and rental leasing to individual providers.
Managing a For Rent By Owner Property Made Easier
For rent by owner properties have strong rental demand, but you need to have an effective property management plan to be successful. These tips will help, but you have the option of taking a hands-off approach by hiring a local full-service property management company.
Property Management International Greater Philadelphia is at your service if you're looking for a property management company. In addition to being part of a national real estate management franchise that manages over 100,000 units, our company is locally owned and independently operated by experienced brokers.
Schedule a consultation to learn more about our services.
