Hi this is Tanya with Envy Property Management, in today’s video, I’m going to talk about things you should consider when choosing to self-manage your rental property. Many times investors believe they can buy a rental property, find good tenants who are nice and pay on time and everything else will just fall into place. The reality is that there are many details and laws that encompass efficient management of a rental property. Choosing to self-manage a rental property can generate increased risk of exposure in the form of liabilities, as well as more costs and hassles overall.
With this in mind, I want to talk about 6 questions savvy investors must ask in order to understand if they should self manage their rental property.
Do I Have the Ability to Adequately Screen Tenants?
The first and most important task that a property owner who chooses to self-manage would be required to perform is to screen potential tenants. Rental applications will have to be taken, credit reports will have to be pulled, and a strong, detailed lease with precise language that conforms to state and federal regulations will have to be prepared.
Do I Have a Trust Account?
Once a landlord has a tenant’s security deposit, the law mandates that it must be deposited into a Utah trust account in a licensed and insured bank or savings institution. The deposit cannot be co-mingled with personal funds. The laws surrounding this are very strict about and the monies have to be reconciled in very specific ways. Everything must be disclosed to the tenant, including the location of the funds.
Can I Effectively Manage a Tenant/Landlord Relationship?
There are a lot of moving parts involving relationships between tenants and landlords. Do you have the ability to keep your rental property transactions completely business? Or are you going to be the type of landlord that could possibly get emotionally involved with the tenants and feel an obligation to help them out if anything comes up. Anyone with experience managing rental properties will admit that it can be a challenge to maintain a professional relationship sometimes, especially with problem tenants. Many laws and processes affect the tenant and landlord relationship. Being an effective landlord requires finesse, tact and the ability to communicate with people of widely differing backgrounds and beliefs. Federal and state laws must be followed despite your own personal beliefs.
Do I know What to do When a Tenant Doesn’t Pay Rent on Time?
What if the tenants are late paying rent, or don’t don’t pay the rent at all? Do you have a written policy in the lease that will help ensure that rents are collected in the proper manner? Are your tenants completely aware of what day rent is due and what specific time a late fee will be assessed if rent isn’t paid by that date? Setting the standard up front will also help prevent many issues or problems before they occur and go a long way toward ensuring that the rent is paid on time.
With this in mind, it is important to treat tenants with respect, respond to their concerns or issues, and handle matters quickly.
Do I Have the Ability to Accurately Perform a Move-in and Move-out Inspection?
The move-in and move-out inspections are critical to managing your property effectively. You can’t hold the tenant responsible for any damages they may have caused if you didn’t properly inspect and document the condition of the property before they moved in. At Envy Property Management, we have state of the art inspection software to effectively and efficiently document the condition of the entire home prior to tenants moving in. Not only that, but it is completely free to our owners.
Do I Know How to Legally Release the Tenant Security Deposit?
Being familiar with the laws pertaining to security deposits is essential. Are you fully aware of what is considered normal wear and tear and therefore not allowed to be deducted from a security deposit? Regardless of whether the tenant failed to pay the rent, broke the windows or stained all of the carpets, there are many laws that you must strictly adhere to in the disposition of a security deposit.
Anytime a tenancy is terminated, the deposit that is held by a landlord as security can only be withheld to offset damages if an itemized list of said damages is both created and delivered to the tenant. There are time limits and laws regarding the disposition of funds.
Hiring a qualified and knowledgeable property manager is the best way to limit risk exposure, avoid hassles and enjoy a healthier bottom line. If self managing seems a little too overwhelming and stressful and you want help choosing a Northern Utah property management company with years of experience, please contact us at Envy Property Management. We are a wealth of information when it comes to professional property management of your investment property. You can always ask us for some valuable tips and extra resources to make the choice simple and painless. Give us a call today, 801-337-4337 or visit our website at envypm.com where you can easily view our three-tiered pricing plan, so you can choose the package that best fits you and your needs.