Being a self-managing landlord is not difficult if you have proper organization, written policies and procedures, and the right business mindset. Check out our top 10 business operating tips we recommend for all DIY landlords.
1. Operate your rental property as a business
Owning rental property and being a self-managing landlord means you must operate professionally and be customer service-oriented. Tenants are your customers, and to generate income, you need to treat them properly. There are processes to follow to ensure you select great tenants, laws to avoid legal action against you, and efforts to properly maintain the rental property to minimize tenant requests for unit repairs.
For those renting out a personal home you recently moved out of, leave your emotions at the door. That property is no longer your home, so getting upset over a junky car in the driveway, cluttered rooms, or dirty appliances will not help your stress level. Instead, control what you legally can and let the rest go. By the way, properly vetting a tenant can help avoid these issues. Check out our FREE 6-page guide: The Residential Landlords Guide to Placing Their Ideal Tenant Every Single Time.
Know all the laws for rental properties
Know your state AND local landlord-tenant laws and ordinances. You can find this information by searching “Landlord-Tenant Laws in ____ (insert your state or county).”
There are national-level laws for Fair Housing as well. Please get to know these as much as possible as they can be easy to violate unknowingly. For instance, you cannot ask a potential tenant where they work. It is discriminatory to assume they have to have a job to qualify to rent your unit. They may be a voucher household or have income from a private source like a trust fund. Another common violation is to ask an applicant if they have children and what their ages are. Although you are just being friendly, this question is discriminatory against familial status. You can only inquire about age if you rent out age-specific residences like a senior living facility. To read about HUD’s Fair Housing Laws, check out their website here.
2. Properly screen a potential tenant
The saying “no tenant is better than a bad tenant” is very accurate. If it takes you two weeks or a month to find the right tenant, then so be it. The frustration of having a tenant who does not pay on time, is destructive to the property, or does not follow the criteria set out in the lease can be stressful and costly to remove. Create standards for your approval process, so you avoid violating Fair Housing laws. If you don’t want smokers to rent the property, make sure your list that in the ad. Do you require a specific FICA score or minimum rent to income ratio? Better list it in the marketing for all to see.
Prescreening Applicants
Prescreen potential tenants before meeting them and accepting an application. Prescreening is a simple short interview to make sure they have read the criteria in the marketing or advertisement. Often, potential tenants will only look at the photos attached to the ad and not read the written criteria required to qualify. They then show up at the unit asking questions CLEARLY indicated in the ad, only to find out they do not qualify. This oversight has wasted your time traveling, opening the property, and getting it ready to show. Time is money! Download our Top 5 Prescreening Questions We ALWAYS Ask to get you started.
The Application
Have a thorough application. It should include these areas to complete:
- Their current address
- Date of birth
- Social security number
- Driver’s license or government ID information
- At least three past rental history locations
- Employer information or source of income
- Three personal references
- An emergency contact
- Roommate information
- Pet information
- Felony conviction information
- A signature authorizing you to pull credit and inquire with employer and references
Again, state and local ordinances may apply to what you can or cannot ask of a potential tenant on the rental application. Check with legal counsel or find a state-specific application from another landlord or a state/local rental housing association.
CHECK EVERYTHING ON THE APPLICATION! First, get a copy of their government ID, the last two pay stubs, and a bank statement for their primary account. Next, call the employer, ALL past landlords, and references. This procedure takes time for everyone to get back to you. We tell applicants it takes a minimum of 48 hours to gather this information and evaluate it. If they are in a hurry, then move on. If any advice sticks with you, remember, you do not want to rush the process because you are anxious to place a tenant.
Learning anything with these top 10 tips for DIY landlords? Keep reading!
3. Create a comprehensive lease
The term “cover your assets” could not be more accurate here. Our lease is 33 pages long! In California, we must include information about specific laws in place (Rent Control, Bed Bugs, and Lead-based paint). Therefore, it is essential to seek legal counsel to create a state-specific lease to ensure compliance. Addendums are your fail-safes; Use them. We use them for everything from no-smoking policies to requiring additional deposits for the use of satellite dishes. Use blank addendums to document specific criteria required, like who is responsible for lawn care, snow removal, or repairs on non-essential appliances.
If you are not aware of what you need to include in a lease, talk to other landlords to see what they suggest, meet with a lawyer, or join a local or state rental housing association. They usually provide leases for free with a membership or you can purchase state specific leases through EZ Landlord Forms. Use code: STACIE15 for 15% any new form or membership!
4. Collect a sizable security deposit
Your state may mandate a maximum amount allowed to collect for a security deposit, so again, know the laws and ordinances around security deposits. In California, we can only obtain a security deposit up to two times the rental rate for an unfurnished unit and three times for a furnished unit. If you do not collect enough for the security deposit, you may have to go after a tenant in small claims court should the damages exceed the amount you hold for them.
Understand normal wear and tear versus damage. For example, holes in the wall for a few photos are wear and tear where thousands of staple holes from a tenant putting up noise insulation foam are damage. A dirt trail on the carpet around the area of the bed is wear and tear. Large stains or holes in the carpet are damage. A small dent in the refrigerator is wear and tear. The handle missing from the dishwasher door is damage.
For more information on security deposits, check out our blog post: Security Deposits, 5 Tips Landlords Should Know.
5. Inspect units every six months
Your lease should state that you have the right to enter the unit for inspections periodically. We inspect every six months, usually in the fall and spring months. You could choose to inspect six months into each lease, but that means multiple trips for inspections for multi-unit properties. We inspect units in our multi-unit properties all on the same day, twice per year.
During the inspection, we check for leaks, mold, and lease violations. We also check to ensure the smoke/carbon dioxide detectors, door locks, and cabinet doors are functioning correctly. As well as change batteries if needed.
Doing this inspection allows us the opportunity to be proactive with maintenance issues. For example, we can resolve the problem before dry rot or mold occurs if we find a water leak. It also gives us a pretty good idea of how the tenant treats the unit and, should the lease not be renewed, what cleaning and damage repairs we can expect.
Ok, we are halfway through our Top 10 operating tips for DIY Landlords! Keep reading to learn more about the behind-the-scenes business practices that are just as important as tips 1-5.
6. Create a solid team to support you
We cannot stress this part of DIY landlording enough. The people you call on for all needs when running a business can make or break your experience. You know your strengths and weaknesses and find others to serve those functions you cannot do yourself.
Find yourself a reputable contractor to call for maintenance issues you cannot remedy yourself. Our contractor can handle almost any maintenance request, and because he is licensed, insured, and bonded, we can trust him in units without us having to be present. He is also willing to be on call when we are traveling. Our contractor has saved us so much stress and anxiety when on vacation!
Other significant team members would be a CPA or tax advisor, real estate lawyer or legal counsel, your bank, pest control company, landscaper, appliance repairman, painter, or a cleaning crew. For our top 5 team members and how we found them, check out our blog Landlording: A Team Sport.
7. Have substantial cash reserves
If 2020-2021 has taught us anything, it should be the importance of cash reserves for the unknown. I know some real estate professionals disagree, but we are of the mindset of “it’s better to be safe than sorry.”
Included in our financial planning for our rental property business is the goal to set aside 10% of earnings each month. We save for vacancies, nonpaying tenants, repairs and maintenance, roof, driveway, appliance replacement, and property upgrades as needed to remain competitive in the market. These funds are your “oh crap, what now” savings account. If we did not have a substantial cash reserve, we would have borrowed money to get through the pandemic. We would have been fine but, the reassurance and confidence we have knowing we are financially secure is an enormous stress reliever.
To learn more about cash reserves, read Cash Reserves for Rental Properties: How Much is Enough.
8. Keep your documents, photos, and records organized
Part of owning a business is keeping your paperwork in order. For rental properties, it is imperative to know where every document is at all times. It does not matter if you prefer paper trail or electronic files.
For each unit, have a file for every tenant. This file should include all correspondence with the tenant and their application, lease, unit photos, and move-out paperwork.
For each property, have files for receipts, warranties, rent roll, maintenance logs, information for machines, and backup keys for units, mailboxes, gates, garages, etc. Also, a copy of the declarations page for your liability insurance.
For the business, you should have operations and policy and procedures manuals. The operation manual will describe all of the essential day-to-day practices for operating your rental property business. This manual is vital should you become incapacitated, so another person can step in and run your business on your behalf.
The policy and procedure manual contains all of the criteria you require to rent one of your units. This manual will state such policies as pet, smoking, financial requirements, what you repair vs. tenant responsibility, etc. It is essential to have these written (and check for legal compliance) if you find yourself in court over a discrimination lawsuit.
To learn more about organizing your landlord documents, check out our blog: Keeping Rental Property Documents Organized.
9. Properly account for your finances
There can be a lot of coming and going of funds when owning a rental property business. You must educate yourself on tax laws and know how to account for your income and expenses. There are a lot of ways to save money on rental income. Having a CPA with knowledge about rental properties to advise you is key.
Stay on top of your bookkeeping. You should know from month to month where you stand financially. If you only work on your financials every three months, you could miss out on potential financial growth opportunities.
Always know the value of your properties and what market rents are. Then, should the opportunity to refinance the property come along, having your finances in order can expedite your loan process, enabling you to use the extra cash to purchase your next rental property.
10. Make sure you are adequately insured
Liability insurance policies depend on the type and size of your rental property. Single-family homes, condominiums, and apartment buildings all have different types of policies and coverage. For example, apartment buildings with more than five units are considered commercial property and have additional coverage that a 4-unit building may not include.
If you own a single-family home and rent only a room or two, you will need to take out rental property insurance to cover the liability, contents, and loss of rent coverage.
Single-family homes and condominiums usually do not include comprehensive liability insurance, just general liability coverage.
Whether you hold your rental properties in an LLC or not, consider getting umbrella insurance for additional liability coverage.
Each insurance company has different levels of coverage, so it is a good idea to have a conversation with your insurance broker to assure yourself the coverage you have is satisfactory.
Lastly, we require our tenants to hold a renter’s insurance policy. There are many reasons why we enforce this policy. Read why in our blog: Why Landlords Should Require Renter’s Insurance.
Love these top 10 operating tips for DIY landlords? Check out our other blogs to guide you on your self-management journey as a landlord:
The Who, What, When, and Why of Residential Vacancy Insurance
Offering Tenants Incentives Upon Lease Renewal
Make It a Family Affair: How Landlords Can Employ Children for Tax Breaks
Marketing Your Rental Property, Get to Know the Neighborhood
Tips for Taking Great Rental Property Photos
Let’s be social! Follow us on Instagram, Facebook, Twitter, or Pinterest!
Looking for a community of DIY landlords you can ask questions and bounce ideas off of? Join the Your Landlord Resource Facebook Group, a discussion group for support, tips, and guidance to help create successful landlord-tenant relationships.
Tenants, termites, and tenting, OH MY! A few years ago, we had the unfortunate situation of termites in our six-unit apartment complex. This blog covers how to navigate the process of termites in your rental property. We cover how we discovered them, the tenting and fumigation process, communication and method of guiding our tenants, and all the nuts and bolts that came along with this experience.
Discovery
Our termite story begins with a tenant informing us that she noticed a few tiny pinholes around her front door frame and molding. On the floor directly underneath, she saw fine dust. Under the advice of our pest control company, she was asked to place blue painters’ tape over the holes. If the hole appears through the tape again, we have termites. Indeed, holes were there a few days later. Ugggh! How could we have termites in our rental property?!
After picking our stomachs up off the ground, we immediately scheduled our pest company out for a complete pest inspection. The apartment in question is in the front of our six-unit building. After investigating the basement, the inspector confirmed there was a small infestation of dry wood termites. Dry wood termites, unlike subterranean termites, live inside the wood, making soil treatment pretty much useless.
We were given two options:
Back when I started as a landlord, I had no idea what I was doing. My brother was my partner and was a general contractor so, he handled all of the maintenance responsibilities. I had to learn how to market our vacancies, process applications, price the rents, account for the income and expenses, and most importantly, have good customer service to our clients, the tenants. When my brother became injured and could no longer work in the family business, I needed to learn the importance of an excellent team to call upon when needed. I quickly learned that landlording is similar to a team sport.
For clarification, a team member does not necessarily mean an employee. These are tradesmen, legal counsel, bank/loan companies, real estate professionals, CPAs, cleaning companies, appliance repairpersons, landscapers, etc. Essentially, a team member is ANYONE who can make your life easier by completing the tasks they know and do best.
Our Top Five Team Members
Choosing the five most critical team members is like only picking two of my three children to go in a lifeboat. Where Kevin and I can handle many jobs, every person on our team is crucial to our success.
Maintenance
We have our general contractor on speed dial. We were lucky enough to find a contractor that does not do large projects. He worked for years on large jobs and, as he has gotten a bit older, decided that smaller jobs have fewer headaches and likely more income for him. In addition, he lives in the same area of our units (we live 2 hours from our rental properties), so he can quickly head over when a maintenance issue arises.
He does not mind being on call when we are on vacation, and he is very protective of our properties. He is insured and bonded because he is a licensed contractor, so we have no trust concerns with him being in occupied units. For the most part, he will do almost anything except new electrical. For that, we hire his electrician.
How did we meet him? He was referred to us by the painter. You will find that referrals are the easiest way to secure a team member, so do not be shy about asking fellow landlords for direction when in need.
Legal Counsel
As a landlord, we cannot express enough the importance of an excellent real estate lawyer. We have called upon our real estate attorney multiple times for
Differing Opinions
Offering our tenants some incentive upon lease renewal has become a more explored policy in the last few years. However, landlords sit on both sides of the fence on this policy. Some landlords who see themselves to be fair, responsible, and kind to their tenants believe that offering an incentive to tenants as a bonus upon renewing the lease is a waste of time and money. Instead, they feel the tenant should appreciate their relationship and be grateful they are not dealing with a nightmare landlord. They even will go so far as to believe that if the tenant were to move out, it would be an opportunity for them to raise the rent higher. That certainly can be true in rent-controlled areas, but a view of “take it or leave it” is not uncommon for many landlords.
The other school of thought on incentives in exchange for lease renewals is that landlords will do what they can to retain a good tenant instead of losing income due to a vacancy. Their issue is the time it takes to flip a unit to get it ready for a new tenant. Meeting for the pre-move-out inspection, after move-out inspection, dealing with accounting for security deposit returns or losses the security deposit must cover are seen as a pain. These items do not even consider ALL the other typical maintenance issues: replacing/cleaning carpet, painting the unit, repairing broken blinds, replacing run-down appliances, marketing the property, and then going through all the rigamarole of the application process to place the new tenant.
The adage that time is money runs very true for our family. We have hectic lives and honestly will do what we can to avoid a vacancy.
Our Reasoning and How We Offer Incentives
As landlords we often can use an extra hand around our rental properties so why not employ your children or grandchildren to get some of those items off your To-Do list? I suggest you speak with your CPA to validate if the following statements will work for your business. As a landlord, you should consider making your business a family affair and employ your children/grandchildren to benefit from the many different tax breaks available to you.
Landlording Jobs Children Can Do
First, lets talk about what kind of tasks your children can do to assist in your landlording business. This depends on their age. Younger kids (under age 14) can do such tasks as sweeping walkways, clearing snow, watering plants, raking leaves, filing papers in the office, etc. Older children (ages 14-18) can do such tasks as washing windows, painting during a vacancy, cleaning a unit, power wash the exterior of the property, cleaning the leaves from the gutters, gardening and mowing lawns, and even handle some light office work like sorting papers for bookkeeping. If your older aged children are proficient on the computer, they can create forms for the business. Consider personalizing forms like Move IN/OUT Itemized Statements or Maintenance and Repair Logs to keep in your files when work has been completed on a unit.
It may be a stretch, but I believe your child or grandchild can be paid for modeling in your marketing as well. Marketing is not only for when you have a vacancy, you can pay modeling fees for websites and flyers as well.
Tax Benefits of Employing Your Children
Tax benefits of employing your child come about in a couple different ways. By paying your child, you reduce your self-employment taxable income when it comes time to file your income taxes. Along those same lines, you are exempt from paying payroll taxes (Social Security, FICA, & FUTA) for your child, just so long as that child is under the age of 18.
When it comes to residential income property, there are many criteria that can lead to very expensive mistakes if you do not handle your decisions properly. Let’s start out by stating this: security deposits are not the landlord’s money until after the tenant has moved out and the landlord has proven what damages they need the funds for. Security Deposits are the tenant’s funds which they are allowing you to hold for them. Most states require security deposits be held in a separate bank account; Not the primary bank account used for income and expenses. You may not commingle these funds with other money not designated as a security deposit. It should come as no surprise that security deposits are in the top three incidents that landlords and tenants find themselves fighting over in small claims court, so here’s our top 5 tips every residential landlords should know:
1️⃣ Do Not Designate Specific Deposits
2️⃣ Have Thorough Records Of All Correspondence With The Tenant Including:
3️⃣Take Photos Of Every Angle Of Every Room Before Move In.
The 3rd of the 5 tips is important for security deposits that landlords should know; Implement this tip with your next tenant flip! Photos from phones and digital cameras have a date stamp and can prove that dent was not in the dishwasher before they moved in. In the same manner, landlords should take the exact same photos at move out. Do not take videos, many small claims courts will not allow video, only photos. Keep these in the tenant file or have it noted which electronic folder the photos are located in so you can find them easily. It can take months for the tenant to act on a legal action against a landlord. By then, hopefully, a new tenant is in place but you have no recourse to prove the damage occurred during their stay if you don’t have proof dated within their lease terms.
4️⃣Know Your City Ordinances.
5️⃣Know How Many Days You Have to Return or Estimate The Security Deposit Held After Move Out
Business cash reserves are a basically an emergency savings account. If you treat your rental property as a business, you should be putting a little aside each month for the unknown. You know, like a pandemic. So how much cash reserves are enough for your rental property? We’ll get to that in a moment.
Why Do Landlords Need Cash Reserves?
- Unexpected vacancies or turnover that takes longer than expected.
- To carry a good tenant facing sudden health issues.
- To cover expenses and missed rent in the event of a fire or flood, or God forbid another pandemic.
- For replacement costs for damaged windows, doors, carpet, or appliances like water heaters, air conditioners, or refrigerators.
- Those unexpected repairs to damaged floors, heating systems, or issues caused by mold or pest infestations, or dry rot.
- Costly capital improvements like a new roof, fence, kitchen, bath, or painting the exterior of your rental property.
As you can see from the examples above, capital reserves carry you through many different circumstances. Had we not had a sizable reserve, we would have been in a very different situation during the pandemic.
How much cash reserves do you need for your rental property?
The basic rule of thumb is much like you should have for your personal reserves, six months of income and expenses in the event you are incapacitated and your income stalls. So that would be six months total of:
- Total income earned by your rental property. This includes monthly rent and income derived from any other sources like washer/dryer coins, additional storage income, parking space income, and concierge services offered to tenants.
- PMI: Property taxes, mortgage, and insurance fees.
- Maintenance and Utilities you provide: Water, gas/electric, trash, landscaper, and/or property manager.
- Expenses you run through your business: Car payments, gas allowances, health insurance, employees, etc.
Two approaches on to how to reach your goal reserve:
Additional Notes
Location, location, location, the official mantra of anything real estate. Whether investing, buying, or renting, the importance of that phrase cannot be overstated. Make sure you include facts about the neighborhood when marketing your rental property.
As investment property owners, knowing about your neighborhood is vital when marketing your unit. Prospective tenants want to be close to work, restaurants, shopping, parks and walking trails, good schools, entertainment venues, etc. An ideal location can have a significant impact on your revenue. Often tenants focus on an area that fits the lifestyle they desire for themselves and their family. They may be willing to pay a little more and might overlook some rental unit shortcomings if the property is in a great neighborhood.
When you purchased your investment property, I am sure location played a pivotal factor in moving ahead. Along with cash flow, appreciation, ROI, etc., you probably toured the surrounding neighborhood or looked online to see the proximity of good schools, shopping, and so on.
But to properly market your rental property to prospective tenants, take it a step further and treat the neighborhood as your own. Spend time in the area as if you lived there or become a tourist for a day or two. I had one English teacher who recommended one should “write what you know.” By getting to know your rental property neighborhood, you can better relate to its positive aspects, whether through your marketing ad copy or when answering questions your prospective tenants might have.
Quick Story
A few years ago, my wife and I had some work being done at our apartment complex in midtown Sacramento (2 hours from our home), which required us to spend the night.
The adage, “you only get one chance to make a first impression,” is never truer than when you are trying to get a prospective tenant to view your rental listing. Photos are the first thing someone sees when searching for their next apartment or home. Most people will not even look at an online ad without pictures. Having photos that capture the renter’s interest often can be the difference between them wanting to know more or moving on to the next listing. Here are some tips for taking your best photos of your rental property.
Always remember, if you want great pictures of your listing, the care, time, and diligence you take when photographing your property is crucial.
Lights, camera, action! The director’s traditional call before a film take. Let us look at how these come into play in your rental listing photo shoot.
Lights
You can have the best camera and the most stunning rooms to photograph, but nothing matters without light. Good photos are all about lighting. Without enough lighting, the rooms may appear blurry and gloomy. Light can dramatically impact the feel of a photograph. Natural light, or light from the sun, is best for making your space look bright and inviting. Take photos of your property on a bright sunny day and supplement the natural light by turning on indoor lights and opening blinds or curtains. This can also make your space feel bigger. If there are areas where natural light is unavailable and lighting in the room is not sufficient, you may have to use a flash. I will discuss how best to use a flash in the camera section.
Camera (& Accessories)
When considering equipment, a DSLR camera will give you a more professional look, higher quality, crisper images, and the ability to capture wider angles. However, today’s point and shoot or smartphone cameras can get the job done.
Whatever the camera you choose, I highly recommend using a tripod where you need your scene to be as sharp as possible, especially in low light conditions. The one I use supports both my DSLR and iPhone and comes with a Bluetooth remote. To check it out click here. 
Even with well-lighted rooms, using a tripod eliminates the chance of blurry or less than clear, sharp images. If the interior has less than ideal lighting conditions, it is even more crucial to use a tripod.
In some cases, a flash may be required. Most flashes are quite intense and can make your interiors look flat, unnatural, or over-exposed. With a DSLR camera, you can attach an on-camera external flash (compared to a built-in flash which is integrated into many point & shoot and phone cameras). You can then aim your flash up and “bounce” it off the ceiling to illuminate the room much better.
When taking photos of the rooms inside of your rental property, it is vital to have the right angles. Photos generally look better when your camera sits lower than eye level. In kitchens and bathrooms, shoot just above the top of the counters. Try to position your camera below shoulder height and adjust until the walls are vertical and straight. (This is another reason to invest in a tripod, to keep your photos consistently at the right level.)
Make sure the camera is shooting level. Use the grid feature on your camera or iPhone display to make sure your frame is parallel. Avoid strange angles and do not aim the camera too high or too low, leading to converging lines or a distorted image. With a DSLR, it is advantageous to use a wide-angle lens but be careful when going beyond 22mm or using an ultra-wide lens that can distort the room. With a smartphone (I use an iPhone 12Pro) , you can experiment with the panoramic or wide angle feature to get a fuller shot of the interiors, but the same caution applies – do not make it look like a funhouse! Take your photos from different angles and positions to see what best shows off the unit. Taking photos from corners of rooms opens them up, but also try taking some shots straight on.
Action
Taking the best photos of your rental property starts before you even pick up your camera, as the first order of business is making sure the property is prepared. This means both the interior and exterior. When shooting outside, consider the time of day. You do not want the property dark and hidden in the shadows. Make sure the yard is tidy and freshly landscaped. Consider shooting during the time of year that shows off your property at its best.
An example is one of our apartment buildings that has a couple of beautiful trees out front. While they are green and full in the summer, providing plenty of needed shade, they block out most of the building when taking a photo of the front. Taking that same photo in the spring or fall, with fewer leaves, allows a much better image of the property.
The same goes for any other exterior shot. If there is a pool, shoot during a bright sunny day, so your future tenants can better imagine enjoying themselves. Make sure any furniture is clean and that the area is swept. If you have outdoor lighting or a fire pit that you want your renters to enjoy in the evening, consider shooting in the late afternoon or around dusk to show off that ambiance.
The same is true of the interior.
Make sure the unit is clean and rent ready. Please do not take photos during rehab or before it is prepared to show. Notice the photos of these similar kitchens, which could you imagine yourself living in? You would not schedule a showing with dishes in the sink, a broom and bucket in the corner, or counter tops full of cleaning supplies. It is the same when taking your photos. Think of your photos as your first showing.
Plan out your photo shoot. Walk into each room and see what the best direction/angle is to shoot the room. Ideally there are multiple good choices. Write these down in a notebook so when you are ready to shoot, you remember your earlier walk through and check the shots off as you go.
Make sure you take photos of closets along with extra storage areas. Get shots of appliances, washer & dryer, and any other amenities your property might have.
It is better to have a few too many photos than not enough. But you do not want to snap away endlessly, so you are overwhelmed in post-processing. It can be frustrating feeling you missed some crucial shots. This is where it is nice to have notes, as I mentioned earlier, that keep you aware of what you still must shoot and what you have already photographed.
Be sure to take advantage of photo editing apps and software (a lot of them are free!). I use Adobe Lightroom which offers simple to complex editing options, access from my laptop, phone, or web, storage and photo organization features (click here for a free trial). Brightness, contrast, saturation, shadows, even some alignment issues are just some of what can be adjusted to improve your photos. Take the extra time to make your photos the best they can be, but be careful not to overdo it. You want to show your rental property at its best, but you also want to be truthful.
As in most projects, proper planning and preparation are vital to their success. I hope these tips help you get ready to start taking great photos of your rental property. A little extra time and care in photographing your rental property will pay dividends in the future.
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Free Guide: The Top 5 Prescreening Questions We Ask and Why
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For the longest time, we did not require renter’s insurance. Although we had a disclosure within the lease where we recommended coverage, we did not require it. Nevertheless, now we are explaining our change of heart and why every landlord should require rental insurance from their tenants.
Why didn’t we require renter’s insurance on the units we owned? Unfortunately, we thought it was only to cover the tenant’s personal property in a fire or flood (think broken water pipe) event. Recently, we sat down with our insurance specialist, Michael Bravo of The Bravo Agency, to learn more about why landlords should require renter’s insurance.
Liability, Liability, Liability
Yes, I know, liability is the main reason to hold any insurance policy. Keep in mind, you do not have a controlling interest in your tenant’s insurance policy. What you do get as a landlord is peace of mind as it covers tenant caused damages which take place on YOUR property.
Standard policies cover:
- Personal Property Loss
- Temporary housing and living expenses if their unit is found uninhabitable
- Liability in the event a guest gets injured while visiting a tenant’s unit
Personal Property Loss (Benefits Tenant)
Here are several examples of how your tenant’s personal property is covered in the event of damage or theft:
- Tenant in the unit above overflows their bathtub, the water comes through the ceiling, and damages another tenant’s electronics.
- Theft of a tenant’s bike from property grounds.
- There is a fire in the building, and all personal property is damaged from water or smoke.
- A tenant’s personal laptop is stolen from their car.
- Water pipes break, and water damages all contents within a unit.
Additional Living Expenses
If your tenant’s unit is deemed uninhabitable, their renter’s insurance should cover the cost of temporary housing, food, dry cleaning, etc. Additionally, it may even cover the cost of a moving company. In most cases, your commercial property insurance coverage usually does not provide this for tenants.
Extended Liability
This portion of the policy will cover such instances as a visiting guest who gets injured within the unit or has damages caused by one of your tenants. For example, the tenant drops a bottle on their foot and breaks a toe). Moreover, it also might cover dogs in the event their dog bites you, a guest, or neighbor. Note: Make sure tenants confirm pets are included in their coverage. Many policies do not cover dogs or have limitations on weight and size.
Furthermore, should there be a lawsuit from bodily harm or injury, the insurance likely will cover a portion of medical and legal fees as well.
Why do these instances affect you? To demonstrate, let’s say you rent to a tenant who owns a dog and said dog bites a passerby. On the whole, you can be liable to that victim by allowing the tenant to have the dog on your property. Also, another example would be a delivery person who trips and gets injured on a toy or hose the tenant left in the walkway. Keep in mind, if you as a landlord do not require the tenant have rental insurance, the liability can fall to you, as the property owner.
It should be noted that a separate rider for natural flood and earthquake damages may be required. As a practice, standard policies do not typically cover them.
Cost of a Policy
In general, the cost of an insurance policy is usually very low per month. Tenants pay in the range of $20 – $30 depending on the amount of coverage and where they reside. Interestingly, for an additional few dollars more per month, the tenant can secure $300,000 – $500,000 of coverage. Depending on the property, we require a minimum liability coverage of $100,000.
Why is the amount of coverage necessary for you? Damages caused by a tenant allows your liability insurance to subrogate funds from the renter’s insurance policy. This helps with the payout to cover damages not being all out of their pocket. For instance, if you own a duplex and one unit has an extensive kitchen fire, $100,000 is not likely enough to pay for all the damages where $500,000 might be. Therefore, your insurance company would be able to recoup all or most of the liability they had to pay out for damages.
Despite damages which you are found responsible, the tenant’s rental insurance will replace their belongings and pay for temporary housing. Commonly, these two items are not typically covered under a landlord’s commercial liability policy.
In Conclusion
As you can see, being a landlord requiring rental insurance for your tenants is a huge plus for peace of mind. Adding the task of monitoring each tenant’s policy to your task list is a small price to pay. Make sure your lease clearly notes that:
- You require renters insurance.
- The minimum coverage you require.
- When they need to have the policy in place by. For timeframe, some landlords require proof prior to signing the lease, others are a little more lenient and ask it be fulfilled within 14 days of signing or entry to the unit.
- You or your legal entity are noted as an additional insured.
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