Rental Trends

This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.

If you are moving and considering renting out your home rather than selling, there are a multitude of details to consider before renting out your home, such as should you hire a property manager or rent it out yourself? Regardless of your decision, here is a checklist to get your house ready to rent.

Start the process at least six weeks out.

Start even sooner if you’ll need to have some work done to make the rent ready. You’ll want the home to be at its best before you start showing it to tenants, and many tenants start looking for a home four to six weeks prior to their move date.

Spruce it up.

Spend some time and money to give your property a coat of fresh paint, plant some flowers, de-clutter and clean thoroughly. Quality tenants want a clean home that makes a great first impression. This guide offers more tips you get your property ready to rent.

Change your insurance.

Your homeowner’s policy isn’t enough to cover you when you become a landlord. Before you sign a lease, be sure to consult with your insurance agent and get a landlord’s policy, also known as a dwelling policy. Find out more about landlord’s policies.

Get Legal.

Research the laws in your area and obtain any required licenses and inspections. In most jurisdictions, being a landlord is considered a business that requires a license, even for a single property or basement unit. Some cities (like Washington, D.C.) require inspections and a certificate of occupancy before you can legally rent out your home. Learn the requirements for becoming a landlord in Northern Virginia.

Decide if you’ll accept pets.

You’ll have a larger pool of tenants if you’ll consider furry companions, but make sure you have strong tenant and pet policies in place to prevent costly damage, noise and other pet-related problems. Determine whether to charge pet rent or pet fees. You’ll find information to help you decide and develop good pet policies in this article.

Figure out how much rent to charge.

Research the market for homes or units similar to yours in size, location, amenities and condition. See how much those comparable homes are charging and whether they rent quickly.

Create a marketing plan.

Think about your likely renters and decide where to post your listing to attract the largest pool of qualified tenants. Write an ad highlighting your property’s best or most in-demand features and take high quality pictures that show it in the best light. Learn more about how to market your rental property.

Develop a comprehensive tenant screening process.

Thorough screening is the key to making sure you get a great, qualified tenant instead of a nightmare. Screening should include pulling a credit report, criminal history, and eviction history as well as verifying employment and checking references. In addition, having a systematic process that you use for every applicant will help you avoid potential discrimination charges.

Have an iron-clad lease.

A lease outlines rights, rules and responsibilities for you and your tenant. In case of a disagreement or problem, a well-written lease will help protect you. To make sure you are adequately protected and that your lease follows all applicable laws, you may wish to consult an attorney. Get more information on leases and rental agreements.

Consider hiring a property management company.

A management company can help with or take care of all of the tasks above. And they’ll be there to handle anything that comes up after the tenants move in, too. Moving is stressful enough without worrying about starting a new business as a landlord at the same time. The value of professional property management is even greater if you’re going to live far from your rental property. Download our free guide to Working with A Property Management Company.

This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.

Reality shows, speaker circuits, how-to courses and book deals hype the dream of buying a house with improvement potential, revitalizing it and selling it for big profit. How much easier can making money be? According to these “experts,” one house can return as much profit to the savvy investor as an annual salary.

Of course, in reality, flipping houses is more involved than it appears. Prudent investors will exercise due diligence before spending a single dollar. They’ll also consult true industry experts, home inspectors and contractors to provide evaluations and cost estimates to compare against possible returns.

One of the biggest hurdles for first-time flippers is to balance the cash needed to buy the house with the cash needed to fund the rehabilitation. It is a big consideration and requires professional consultation to make a sound, profitable decision. Just consider the disclaimer for the A&E reality show, Flip This House: “Do not try this at home. It is for trained professionals. You will lose money.”

The difference between a flip and a flop

You are good with tools, have a flair for decorating and found a terrific bargain in an up-an-coming neighborhood – all the formulas for the perfect house flip. It is a no-brainer, right? So, where is the wrinkle? There are plenty of underlying considerations to evaluate before gambling on restore-resell investing.

• Location — This can make or break the deal for potential buyers. Newer neighborhoods are attractive but usually come with higher purchase costs. Look for neighborhoods that are nearly complete. It is very difficult to compete with builder incentives for brand new homes when you are selling a previously occupied home. Good bargains may be found in situations where a builder abandoned the development and a house needs to be finished. Older neighborhoods on the cusp of revitalization also present good opportunities for aspiring flippers, but may require more skilled repairs and modernization.
• Foreclosures — Many buyers interested in flipping a home look to foreclosures. Remember, if an owner couldn’t afford to pay the mortgage they probably couldn’t keep up the maintenance on a house. A foreclosed property may present a number of challenging — and costly — underlying issues for investors.
• Neighborhood crime — Crime not only affects the appeal of a house to potential buyers. It also affects the restoring and reselling process. Empty houses make a prime target. Theft, vandalism, drugs and squatters can add thousands of dollars and hours of time to the process of restoring a property for resell.
• Relative market value — An important consideration in restoration planning is the aggregate value of the neighborhood. According to experts, over-improving for the market is a big mistake house flippers make. If the average home in a residential area sells for $100,000, it isn’t wise to invest $100,000 in remodeling and upgrades anticipating a $250,000 sale. You’re unlikely to find a buyer willing to spend that much, and if you do, it will be tough for them to obtain a mortgage for overvalued property.
• Contingency plan — There is an old saying that any plan is only as good as the backup plan. This is especially true for investors looking to flip a house. Beyond the initial purchase and reconstruction costs there are ongoing mortgage payments, insurance, utilities and other costs of keeping the house in the event it fails to sell quickly. Many investors rent homes out for income until the market improves.

Restoring and reselling may be a great option for getting in to real estate investing for future financial gain, but, as with any speculation, a prospective buyer should first invest the time and effort to do necessary homework on the deal. Assemble a team of trusted experts: a lawyer, accountant, real estate broker and contractors. Despite the implication, flipping a house may not mean a quick profit. But with diligence and some good old-fashioned elbow grease, it is possible to come out ahead.

The real estate professionals at Gordon James Realty are experienced in all areas of real estate investment. With more than 30 years of combined experience, they understand the complexities of the market and can help with your property investment opportunities.

This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.

Finding and selecting a property management company to manage your most valuable asset(s) is no small feat. The stakes are high — you’re looking for a firm or person you can trust to take care of a very valuable investment, maybe even your own home. And not everyone uses the services of a property manager, so recommendations from family or friends may be hard to come by.

Because of this, some property owners fall into the trap of picking the company that’s been in business the longest, manages the most properties or has the largest number of employees.

Here’s why that by-the-numbers approach is a mistake, along with some advice on what you should be looking for instead.

Longevity doesn’t equal quality.

Plenty of firms boast about how long they’ve been doing business. But professionalism, ethical behavior and responsiveness are all far more important than a long tally of years on the job. Developing the expertise to do the job well takes time, but not decades.

In fact, longtime businesses sometimes get stuck in the rut of doing things the way they always have, rather than innovating to keep up with changing markets and client needs.

A balance of experience and innovation is optimal. You want a company or manager that has learned the ropes but also has fresh ideas. Interviewing the company, looking at the types of properties they manage and checking references should give you a good idea of how well prospective firms know the local market and the job.

An ideal firm has embraced some new ideas and technology, especially property management software that allow owners to check property records online anytime. That transparency will bring priceless peace of mind.

Bigger companies aren’t necessarily better.

Can you think of a retail giant that has generally poor customer service and is an unpleasant place to shop? We thought so. Quality doesn’t necessarily increase with size.

Size may come with some advantages, such as financial stability and buying power with local vendors, but it isn’t just the big guys that offer these. And you and your home may just be an address number to a company managing thousands of properties. With that many clients to juggle, firms can be slower to return phone calls or let service slip in other ways.

Aim for the middle ground instead. Find a company that manages enough properties that they’re market experts but not so many that they’re likely to be spread thin. These medium-sized companies likely have the key perks of their larger counterparts, including in-house maintenance and preferred pricing from vendors, so you’ll get a good deal and fast service on any repair work. They’ll have plenty of clients to support the business but not so many that they can take you for granted, so they’ll work hard to keep clients happy.

The number of employees is less important than the quality of employees.

The company you’re considering has hundreds of employees. But how many are licensed managers? Do they all know the market and landlord-tenant laws in your area? Whether you’re thinking of hiring a firm like this, a boutique firm with one or two employees, or something in between, the managers’ qualifications and skills are paramount.

Learn about company practices and employee qualifications. Make sure any managers are licensed and keep their skills fresh. Beyond that, ask the company what other qualities they look for in managers. A professional manner, organization, responsiveness, and excellent customer service should top the list.

How the company assigns managers is also important. Some give owners a dedicated manager, so they have a single, familiar point of contact. At other companies, all managers work with all clients. Companies with both dedicated managers and a team approach offer the best of both worlds. Owners get the benefit of personalized service and the expertise of the entire team.

Looking beyond the numbers when picking a property manager may require a little more homework. But when you can relax, knowing your property is in good hands, you’ll be glad you took a more thorough approach to choosing a property manager. To help you get started, we have a free ebook you can download on the benefits of hiring a property management company and interview questions to ask.

This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.

Real estate investments should be made on their potential to produce a good return (ROI) and consistent cash flow. Experienced real estate investors use financial metrics such as net present value, internal rate of return, and capitalization rate to evaluate real estate investment opportunities.

Let’s explain:

Net Present Value (NPV)

The net present value (NPV) is a good place to start. The formula provides a broad overview of the value of future earnings in contrast to money invested in the present.

The metric isn’t perfect, but it does give you an idea of whether you’ll gain or lose on a property. Because of that, it’s a good calculation to use when deliberating between a couple of investments. It should always be paired with other financial data before coming to a final decision about a property.

Internal Rate of Return (IRR)

The internal rate of return (IRR) is the discount rate, or interest rate, used to produce an NPV of zero. Generally, the higher the IRR, the better. It means that an investment has less risk associated with it.

However, the IRR calculation, like the NPV, is influenced by cash inflows and outflows, inflation, and other factors throughout the years you hold the property. It should be combined with other financial metrics to develop a clearer picture of your real estate investment portfolio.

Capitalization Rate

The capitalization rate is more often termed “cap rate.” It measures the rate of ROI and is based on the annual net operating income (NOI) of the property. It’s a simple way to calculate potential returns and compare them against current market trends.

Like other calculations, the cap rate has limitations. It only analyzes one year of prospective NOI, a number that doesn’t and often cannot account for expenses like taxes or financing costs. While it’s a good number to have in hand, you should always view it as an exploratory, rather than final, number when evaluating real estate investment opportunities.

Real estate can be highly lucrative. However, it requires careful consideration and an understanding of some basic financial metrics. Always evaluate your real estate investment opportunities’ NPV, IRR, and cap rate before committing to one of them.

In fact, if you’re contemplating a property and would like some advice, we’re happy to help. Not only do we provide residential property management services, but we also counsel clients on their investments.

This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.

Income property owners are likely aware of federal Fair Housing laws, but they may be less familiar with D.C.’s ban on discrimination based on appearance or other additional anti-discrimination protections that exist throughout the D.C. metro area.

The Federal Fair Housing Act prohibits discrimination based on race, color, national origin, religion, sex, disability or family status. But each state, city and county in the region makes it illegal to discriminate against several additional groups, known as protected classes.

Following are additional protections in each jurisdiction.

In D.C., landlords may not discriminate in housing based on: age, marital status, personal appearance, sexual orientation, gender identity or expression, family responsibilities, matriculation (being enrolled in college or other secondary education), political affiliation, source of income, place of residence or business or being a victim of domestic violence, sexual assault or stalking.

In Virginia, state law protects those who are 55 or older from age-based discrimination in housing. In Northern Virginia, both Arlington County and Alexandria outlaw discrimination based on sexual orientation and marital status. Alexandria also prohibits discrimination based on children and ancestry.

The variations from place to place make it crucial that landlords know and follow all federal, state and local laws when advertising property, selecting tenants, and working or communicating with interested applicants and tenants. Each year, about 10,000 housing discrimination charges are filed, according to the Department of Housing and Urban Development.

Discrimination can take many forms. A few examples include: imposing additional checks or requirements for some groups applicants and not others, overtly refusing to rent to someone in a protected class, refusing to allow a guide dog in a pet-free building, refusing to allow a tenant to make reasonable modifications to a property to accommodate a disability, and asking screening questions that are discriminatory or may be interpreted as being discriminatory against any protected group.

Professional, licensed property managers are required to understand all federal and local Fair Housing rental laws and ensure they are followed, both to safeguard the rights of applicants and tenants and to protect owners from legal trouble. Of course, a property manager can help ensure owners rely only on legal, relevant and consistent criteria for making decisions about applicants’ qualifications, such as credit history, income ratio and rental history. You can learn more about our property management services.

This article does not serve as legal advice and is offered only for informational purposes.

This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.

Trusting your valuable property to tenants is often a difficult enough step. When you live far away from the property, being a landlord is even more challenging. Many owners worry about whether things are going smoothly and struggle to stay informed without racking up big travel bills to check on the property. If there are problems, it can be difficult to manage repairs or legal issues from hundreds of miles away.

Long distance rental property owners need to make sure properties are managed well. Here are some factors to consider and tips to make sure you’re valuable asset is taken care of even when you can’t physically be there.

Is hiring a property manager necessary?

Some owners delegate the job of dealing with the rental to family or friends. But managing rentals – overseeing contractors for repairs during the workday, answering middle-of-the-night emergency calls or handling tenant complaints – often involves more time, attention and expertise than they can provide.

In addition, proper management of your investment property requires a proactive, not reactive, approach. Professional property managers can provide your property with the attention it deserves. They have the experience to anticipate any potential problems and market knowledge to reduce vacancy times. This will not only help you lower expenses and possibly increase revenue, but it will also give you peace of mind. From rent collection, leasing, and maintenance to accounting and due diligence issues, the right property manager will make a big difference in how your property is maintained and appreciates over time.

How can you obtain a good return on your investment?

To make sure your asset continues to provide you with a good ROI, examine your expenses in the context of your revenue stream. The rent you receive is your income from the property, but your expenses include everything from marketing, to property maintenance and repairs, as well as tenant evictions. As a landlord, you may face unexpected issues in one or more of these areas. A professional property manager would be able to step in and handle any problems. Not only will this result in decreased vacancies and lowered expenses, but it will also increase your return on investment.

How can you stay informed about your rental property?

When you live far away, you’ll need a good way to stay informed about your property. After all, you can’t just drive by. Some owners rely on receiving rent payments to assure them that everything’s going well. But tenants who pay rent can still create problems or unwittingly allow property issues to worsen. Rent payments don’t tell you what’s going on inside the property.

Professional property management companies often use the latest high-tech software to give owners a virtual window into their rental property. The software gives you secure anytime online access to rental agreements and financial statements along with updates on inspections, property maintenance, and marketing efforts. Some managers even post inspection photos to give owners additional peace of mind. Whenever you want to know how things are going, you can just log on. The software also allows gives owners another way to communicate with management, in addition to phone calls and directly e-mail.

Many property owners choose to manage their own rentals. But living far from the rental is the factor that often tips the scales away from self-management. Once you factor in the costs of traveling to the rental and the headaches of dealing with even routine property issues, it will likely balance any fees paid for professional management. And ultimately, professional property management services will result in the continued maintenance of your asset while potentially reducing property expenses and increasing return on your investment.

This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.

Real life isn’t a day at the beach. But investors interested in vacation or resort properties can see that day at the beach in their future. Today, we look at the implications and advantages of investing in vacation property.

Of course, this investment opportunity isn’t just for beach lovers. You may prefer mountain vistas, country farmlands, a dessert oasis, or even the lights of the big city. No matter the type of location, investing in property where vacationers enjoy spending time is a big lure. It is enticing to think about purchasing a home in your ideal location to add to your portfolio. You can use it a bit yourself and then rent out for the remainder of the year – or at least during peak seasons – to help cover the mortgage and other expenses. The appeal is real, but there are serious considerations for the investor.

Real World Implications for Investing in a Vacation Home

Purchasing a second home can become a heavy financial burden for many owners. Regardless of whether it will be used as personal residence or an investment property, many experts advise against purchasing a second home unless you can pay for it with cash. In addition to the initial financing of a vacation home, owners must realize:

• The property may be vacant 90 percent of the year
• Upkeep is required for the property to maintain value
• You’ll see increased insurance premiums
• Security issues may need to be addressed
• There may be significant tax repercussions

The U.S. Internal Revenue Service frequently changes the tax rules governing the use of second homes and investment class homes. Lending institutions also make loan determinations based on the declared use of a second home versus investment class residential property.

Personal Use

How much time you spend using your vacation home determines how the IRS classifies your property and what your tax obligations will be. A vacation home is considered a personal residence if the owner uses it more than 14 days a year or more than 10 percent of the total number of days the property is rented. In those cases, the IRS limits the rental expense deductions to amounts equal to or less than your rental income.

If you rent the home out for 14 or fewer days, you don’t need to report the rental income and you can deduct the mortgage interest as a personal deduction.

Rental Use

If a homeowner uses the residence for fewer than 15 days a year or less than 10 percent of the time the property is rented, the IRS considers the home an investment property for income tax purposes and you must report your rental income. Financial institutions also treat the home as investment class property.

If you use the home for more than 14 days and also rent it for more than 14 days, you’ll have to calculate the percentage of time for each use to determine how to handle deductions. So, if you rent out the home 25 percent of the time, 25 percent of deductible expenses, such as mortgage interest and repairs, can be deducted to offset rental income.

The Upside of Vacation Real Estate Investing

The complexities of investing in vacation property may seem daunting, but there is a financial upside. Most properties located in desirable, popular locations enjoy higher than average appreciation. Savvy investors seeking bargain purchases may also find sweet deals in vacation destinations, because second home sellers are often motivated to sell quickly and foreclosures can be more common. Fluctuations in markets can create significant gain or immediate losses in vacation real estate ventures.

Expert Guidance and Management

Vacation and resort property real estate presents exciting options for investors, but the risks are considerable. As with all real estate speculation, industry experts are the best source of guidance. Trusted accountants, lawyers, real estate agents, property management services experts and loan brokers make up the A-team for any successful portfolio.

Vacation and resort investments also require more marketing and property management work. Rather than finding suitable tenants once every few years, vacation properties typically turn over every week. Rental competition in the destination is often fierce. And with every new tenant the property becomes vulnerable to damage and wear and tear. Partnering with a solid, reputable property management company will help you protect the investment, especially if you live too far away to keep an eye on the property yourself.

Read more in our series Investing in Your Future.

This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.

How much can rent increase in Washington, D.C.?

This is a common question we receive from DC landlords. It’s important to understand your rights and responsibilities and the rent increase laws in DC.

The following does not constitute legal advice, however it should provide a good overview. Please consult with your attorney or the DC Department of Consumer and Regulatory Affairs for advice on your specific situation.

Raising the Rent in DC

Rental increases in DC are typically governed by the terms of the lease and whether the unit is rent controlled. If not registered as exempt, most rentals are rent controlled. Notable exemptions include properties built after 1975 and those owned by a person with four or fewer rental properties. Landlords cannot raise the rent if there is an agreement – usually a written lease – between the landlord and tenant with a specified rental amount.

Rentals Exempt from Rent Control

As long as they follow the terms of the lease, landlords who rent units that are exempt from rent control may typically raise the rent by any reasonable amount, and at any time, as long as such rent increases are not done for any illegal purposes, like seeking vengeance on a tenant for taking lawful action against the landlord. Landlords must give 30 days written notice. While the size of the increase may not be limited by the laws, landlords should carefully consider the market. Increasing the rent too much is a sure way to lose tenants, and vacant apartments don’t earn any rental income.

Rent Controlled Units

If the unit is subject to rent control, landlords may raise the rent if the following criteria are met:

• The previous rent increase was at least 12 months ago (unless the unit is vacant);
• The unit has been registered with the Rental Accommodations and Conversion Division (RACD);
• The rental unit is in compliance with housing regulations;
• A 30-day written notice is provided stipulating any increase in rent.

Landlords may only raise the rent by the amount specified by the DCRA each year, which is based on the Consumer Price Index. Increases on rent-controlled apartments cannot exceed 10 percent. For tenants who are elderly or disabled, allowable increases are more limited and cannot exceed 5 percent.

If a unit becomes vacant, the law does allow property owners to raise the rent on rent-controlled units, even if the last increase was less than one year ago. The owner may then increase the rent by 10 percent or up to 30 percent to match the rent of a comparable unit. But then no other increases are allowed for a full year.

There are a few other circumstances, such as hardship or renovations to the unit, where owners of rent-controlled units may be allowed to raise the rent or raise it by more than the standard allowable percentage. Landlords who are not making at least a 12 percent rate of return on their rental unit can send in a request to the city’s rent administrator to increase the rent by more than the approved amount. It requires filing a “Hardship Petition,” which outlines equity in the property, expenses, rental collections, and other key information. Information on other allowable increases can be found in the district’s rent control fact sheet.

It’s always a wise idea to gather all the necessary information and do the preliminary homework before raising the rent on a unit in order to avoid penalties. For DC rental units, landlords can refer to this rent control fact sheet or contact the Department of Consumer and Regulatory Affairs at (202) 442-4610 for more information.

If you have any questions, or prefer to have a property management company handle this for you, don’t hesitate to contact us.

This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.

A recent report estimates that the D.C. metro area will grow by 1.5 million people and add 1.1 million jobs in the next 30 years, and that growth is likely to bring plenty of opportunity for area property investors.

In Arlington County, projections by the Metropolitan Washington Council of Governments show that 69,000 new residents will move in by 2045. That’s a population increase of nearly a third, and it would bring the number of county residents close to 300,000.

And the county will see an even larger percentage increase in households by 2045 — nearly 40 percent — according to the predictions. That means adding more than 38,000 new households to the 103,600 counted in 2015.

Of course, all those new people will need somewhere to live. And if recent trends are an indicator, many will choose to rent their homes. In fact, they’ll be searching for the best property management company in Arlington, Virginia, not to mention Northern Virginia and the metro D.C. area.

So, while a glut of recent apartment construction may have led regional rents to flatten a bit lately, it looks like there will be plenty of demand for new and existing units in the coming years.

In fact, average annual rent increases will likely top four percent in 2018, according to Delta Associates, a company that analyzes regional housing trends. The company predicts a stabilized vacancy rate of 3.4 percent in Northern Virginia in September 2018. The vacancy rate was 4.1 percent in the third quarter of 2015.

Based on the COG’s report, it also looks like many of the new jobs coming to the region will be those that are more likely to support qualified renters. It predicts a shrinking number of federal government jobs but large increases in the relatively high paying professional and business services sector. Growth in the information sector is also expected to be strong.

Arlington’s share of the region’s job growth will bring nearly 70,000 new jobs to the county, an increase of 33 percent, the report said.

For existing and would-be landlords, the population boom, job growth and ongoing residential development certainly bear watching. As supply and demand in the market changes in the coming years, adjusting investment plans, considering renovations and other ways to keep your property competitive and keeping your rents in sync with market rates will help you maximize returns.

This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.

Renting out property can be a solid financial investment but to see the best return on it, consider how to be a good landlord. By implementing best practices, you will see lower vacancy rates, more quality tenants, and increased word-of-mouth referrals.

What are those practices? Some are obvious; others, while critical, often aren’t thought of until they’re needed because of a crisis. Let’s cover a few of them here.

1. Invest in insurance. A regular homeowner’s policy doesn’t suffice for people in property management. Once you start renting out property, you have a business. This means that losses due to fire, storms, or theft likely won’t be covered with a standard homeowner’s insurance policy. In addition, it will likely be of little help in the case of a settlement. Always, always purchase a landlord insurance policy prior to becoming a landlord. It gives you and your tenants security and peace of mind.
2. Set clear expectations. More importantly, put them in a document that potential tenants have to review and sign prior to moving in. It’s easy to skim, if not skip, the fine print, so highlight the points applicable to the landlord/tenant relationship in question. For example, if the potential tenant has a pet, go over that detail. This will not only set expectations but also give you legal coverage. Another area to cover, particularly in the DC area with its higher tenant churn, is subletting.
3. Screen tenants. You are the company you keep. If your property becomes known as the “party complex,” that’s the kind of tenant you’ll attract. While you can’t discriminate against people based on gender, ethnicity, and similar factors, you can screen tenants for their ability to pay on time and follow the rules.
4. Respond to requests for service. Almost everyone has some horror story about a terrible landlord who never took care of anything, from the blinds to the avocado-green refrigerator. Don’t be that person. Respond in a timely fashion, and respond even faster if it’s an issue such as a leaky pipe. Also communicate with tenants often. Regular communication keeps everyone in tune and demonstrates that you care about the tenants and the property.
5. Treat the neighborhood well. Eyesore properties only diminish the value of the entire neighborhood, not to mention decrease the likelihood of attracting quality tenants. The same goes for not enforcing property rules. If tenants are roaring down the street at 2 a.m., no one in the complex or surrounding neighborhood is going to be happy–and that will hurt your reputation and finances. If you want to make a really good impression on tenants and neighbors this winter, go shovel the sidewalks and driveways. You’ll gain a loyal following for life.

Being a good landlord is about setting expectations and treating people right. You do have to cover your legal bases, but that goes with the territory. But if you can get those three areas right, you’ll never be at a loss for tenants. You’ll have a waiting list.

If you’re contemplating hiring a property management company, you can learn more about our residential property management approach here.