I was beginning to get a little bit worried because we have an extremely hot rental market right now and it took a little while to get rental property number 5 rented. However, today a lease was signed, money collected and we are getting $1,200 a month. Rental property number 6 is almost done and should be ready to rent in a week or so and rental property number 7 is also getting very close to being finished.
How did we advertising rental number 5?
We spend nothing on advertising for our rental properties. All we do is stick a for rent sign in the yard, list the home in Craigslist and list it on Facebook. Those three marketing techniques usually result in the phone ringing constantly for prospective renters. We had a ton of calls on this house, but most of the prospective renters either did not like the house or we did not like their application.
How do we take applications?
I use a very simple application I found online. Basically I want to know who is living in the house, employment history, rental history, any pets and that is about all. I don’t run a credit check or background search unlike many landlords. My excuse for not running a credit or background check is I am super busy and I don’t like collecting application fees. I like to base my decisions off of a gut feel more than numbers. I will call references and make sure they paid rent on time and I will verify work history. If those two items check out and the renters are on time, follow-up well and show me they are responsible than I usually will rent to them. So far I have not gotten burned by this technique (knock on wood).
How did we create the lease?
My sister is a property manager and I use a modified version of her lease. It is very landlord friendly and very clear on exactly what can be done and what cannot be done on the property. No smoking, no pets (unless I specifically okay it in writing), no modifications without consent, no illegal activities, etc. The lease also says exactly what day the rent is due and what the penalties are for being late. We always do at least a 1 year leases and anything that is promised or expected of either party is put in writing. Every state has different laws regarding tenant and landlord rights. I would consult an attorney or a successful property manager if you are looking for a lease.
Lead Based Paint (LBP)
If you are selling or renting a home that was built prior to 1978, you must provide a lead based paint disclosure to the buyers or renters. I make sure a state disclosure that I have access to through my MLS is signed by all parties and provide a LBP pamphlet explaining the dangers.
Why this home did not rent quickly
I completely overlooked a huge deficiency when I purchased this home last year. Rental property number 5 has no dining room or any type of significant eating space. I usually go through houses very quickly when I am looking at potential deals and apparently I looked at this one a little too quick. There is a fairly large kitchen in this home, but most of the space is long and narrow and one side of the kitchen has the staircase leading to the basement. There is no room for a table with more than three chairs in the kitchen and there is no separate dining room either. Most potential renters who saw this home loved it until they realized there was no place to put a table unless you put it in the living room where space is limited. Luckily we found someone who was okay with the layout, but it took a lot of man hours showing the home.
For more information on how to buy the best rentals which will make the most money, check out my book: Build a Rental Property Empire: The no-nonsense book on finding deals, financing the right way, and managing wisely. The book is 374 pages long, comes in paperback or as an eBook and is an Amazon best seller.