Managing a rental property can be a challenging and risky business. Even if you hire a property manager, you must keep your books in order to protect your investment in case something goes wrong.
Hiring the right professionals when needed, such as an accountant or an attorney who specializes in real estate, is a great way to steer clear of trouble if and when tax audits or tenant issues come up.
Your Denver real estate investment is a business. No tenant = no rent, and vacancy kills cash flow.
The easiest and best way to keep an investment property profitable is to secure a good tenant and keep them in there for the long haul (unless you’re doing a short-term rental model, which is totally different). Here are some tips for securing a good long-term tenant:
How to Find a Good Tenant for your Denver Investment Property
- Make the place as nice as you can afford. Consider tiles, nicer flooring, mid-range (not lowest end) appliances.
- Professional pictures. Possible staging. You can reuse the pictures, so just make it look fabulous the first time.
- Price it right for the area and condition. If you overreach, it will sit vacant, or you’ll get someone who doesn’t stay very long.
- Know your local housing regs and laws and be aware of fair housing and safety requirements.
- Create a written policy and stick to it. This can help protect you from discrimination lawsuits.
- Check tenant references, review background checks, and sweat those application details.
- Sign the lease at his/her place (so you can see how they live). If they refuse to have you over, it could be a red flag.
- Make sure the property is pristine for move-in. They’ll be more likely to take better care of it.
- Time your leases right — ideally to end in spring/early summer — so if a tenant leaves, they’re easier to replace.
- Use the right lease. Keep your deposit moneys separate.
- Require tenants to carry renter’s insurance.
- Keep records in a “CYA” file for seven years.
- Tour the place once a year to check filters and change smoke detector batteries. This gives you a chance to see how they’re taking care of the property.
- Find ways to say “thank you” to good tenants.
Remember that a long-term tenant is a partner helping you build real estate wealth –they are most likely paying your mortgage, after all. While you want to keep up with market rent, you also want to find ways to incentivize good tenants to stay. Sometimes a thoughtful little gift or maybe a gift card during the holidays can go a long way with the right tenant, and keep that personal feel. You may want to offer a financial incentive for something of value to you, such as a longer lease…
Its hard to do real estate without a team. A good investor keeps a circle of trusted advisers to help them along the way. Our brokerage specializes in working with investors and we have an excellent roster of qualified and experienced professionals in the investment arena. If you would like an introduction to someone, just get in touch now and we’ll be happy to help.