When it comes to leasing your real estate, be it a residential single family home or a commercial retail store, knowing the number plays a crucial role in giving you the ultimate advantage. The lease amount that you can charge your potential tenants is the number that property management or real estate agents have been playing on for many years. It is usually the market value of your rental property, but sometimes, it may be more or less depending on the condition and other factors that we will touch upon here.
The right lease amount, in fact, will give you the confidence to provide offers without hesitation to your tenants. Identifying the potential of the property is a good start. If the property is situated close to schools, park, transportation, malls and other important amenities, you can up the price based on those perks. However, there is a highest lease number that you can charge your tenants, especially if you are in a rent controlled state. This means, there is a threshold for the asking price as well as limit at which the rent can be increased every year.
Once you or your property management have this number, put on your negotiating hat with the interested parties. Negotiating can be done at any stage of investing, in this case, leasing as well. When you are negotiating, you are accepting the highest bid from the potential tenant before or after application process and background check. Oftentimes, hesitation inhibits new landlords to come up with a negotiating number and prevent them from getting a good deal. Remember that, negotiating is a part of every real estate transaction, even if that leaves a bad taste in your mouth. So, think of this as a learning curve for your future investments. And it is a skill that will improve when you learn the right techniques and use them efficiently.
It is also critical to conduct background search of your potential tenants. This day and age, finding this information is as simple as entering a few personal details into a couple of rows and columns. Getting the feel of what these tenants are up to, how they behaved during the previous leases, what they do for a living and what their financial situation is will give you the firm factors to determine whether or not to enter an agreement with them. You will encounter people who refuse to reveal the information you seek. In such a case, ask yourself: Is leasing to these individuals more worth than the time, money and patience you will have spend evicting them in times of trouble?
Property management professionals that you hire for taking care of the leasing, negotiating, repair and maintenance part of the property are usually competent and offer their services to the best of their ability. Most of the time, you can trust that these people will do a great job in finding the right tenant. They are someone who have honed their skills by handling plenty of properties like yours. As a result, they are more likely to handle the needs and concerns of all parties involved. Make sure to read every line of the documents you are signing before the leasing takes place. And be sure to keep a copy of the lease agreement for your personal records.
Although money is the first thought when it comes to leasing a real estate, this is not always the case. The potential tenants are looking for a property that they can spend a considerable amount of time in and for many other reasons, such as good schools, proximity to workplace, features, waiting period before buying their own and much else. You as a landlord, should realize that success comes when you are able to understand your tenants’ hidden needs. One of the best ways moving forward is to let the right tenants make the commitment without hassles. Let them focus on the moving in part and not have to worry about the soiled corner of the carpet or changing locks. And when time comes for lease renewal, let them leave all the things as is. As the owner, you will have to take care of the cosmetic as well as functional part of the property. A lot of tenants are happy to learn that they don’t have to do any repair work to the house you own.
Similarly, you should be able to handle the objection effectively. Again, this is the job that your property management professionals will handle, but if you are the sole caretaker of your property, be as professional as possible. Maybe the tenants don’t understand how the leasing works or who is responsible for what. Handing everything in writing is a better way to avoid future disputes. You can uncover what is underneath the dispute by actively listening to them. In order to make things move along, you should be prepared to show proof of what you stand for as well. This is natural for professional property management companies; they usually support their statements without arguing.
In some markets, real estate properties are listed without certain appliances or other features. However, your lease agreement should show what tenants are offered so that they can make a list of things to bring. Having the house appliance-ready on the other hand can help you show the house well and get it leased real quick. Leaving the space where the refrigerator, oven or dishwasher should go is not a smart move. At the same time, you don’t want to be extremely generous by installing a high expensive appliance set just to attract the tenants. Just choose an affordable one that comes with a reasonable manufacturer warranty. To be clear: always specify on the document the things the tenants need to take care of and things that can be left for the owner. Remember that, a good team of professionals along with tenants can make or break your investment. They are the most critical part of growing your financial portfolio.