Dealing with a Tough Homeowners Association for Your Rental Property

Posted on by Bay Management Group

 

What To Do if You Own Property in an HOA (homeowners association) That Is Tough To Deal WithHomeowners associations (HOAs) are gaining popularity all across the state of Maryland and property owners are flocking to purchase property that is part of an HOA.  Take a look at this list to get an idea of just how many HOAs there are in existence right now, with additions consistently being made.

So why the increase in HOAs?

Homeowners associations appeal to many property owners because their aim is to maintain property values, serve the best interests of those in the community, and keep some order amongst a diverse group of people.  And, as a property owner that leases a home, these are great benefits.

You want your home to maintain value.  You want your tenants to have their best interests served.  And of course, you want a peaceful neighborhood so your tenants want to stay.

 

However, HOAs have a reputation for being difficult to deal with.  And unfortunately, this difficulty trickles down to property owners, their property managers, and even their tenants.

Thankfully, we have some great tips for handling a tough HOA that you and your tenants can take advantage of to ensure the best possible leasing experience.  In addition, if you employ Montgomery County’s leading property managers to care for your property and tenants, these tips can pass from manager to tenant easily during the move-in period.

Today we will look at what exactly a homeowners association is and how best to handle one if they are tougher than the norm.

 

What is a Homeowners Association?

A homeowners association, or HOA, is a legal entity created to manage and maintain the common areas of a community.  These common areas include places such as pools, clubhouses, landscaping areas, parks, streets, and roads.

And, as mentioned earlier, they are quite popular.  As of 2012, nearly 60 million Americans live in a community that is regulated by a homeowners association.

HOAs are typically established in communities that include condominiums, single-family homes, or townhouses.  And, as the leaders of the community, HOAs provide rules, called the “Declaration of Covenants, Conditions, and Restrictions” (CC&Rs), regarding what can and cannot occur within the common areas of the community.

Here are some of the key traits of a typical HOA:

  • They are usually non-profit corporations
  • They have the authority to enforce the bylaws within the CC&Rs
  • Membership of the HOA is mandatory for all those living within the community
  • Mandatory dues are collected monthly from property owners
  • There is an elected board of members, most of which are volunteer homeowners of the community
  • Many HOAs hire a property management company to conduct things such as maintenance, bookkeeping, and dues collection

 

In addition, HOAs provide services such as maintenance of common area landscaping, neighborhood security, activity organization for residents, and approvals for exterior home improvements property owners want to make.

 

How to Handle Strict HOA Rules

The Do's and Don'ts of How To Deal With a Tough Homeowner's Association (HOA) in Montgomery County, Maryland

All HOAs expect residents, whether owners or tenants, to abide by the community’s CC&Rs.  However, as a Montgomery County rental property owner, it is your responsibility, or that of your property manager, to ensure your tenants follow the HOA’s regulations.  In fact, here are some things most HOAs will want property owners to provide any tenant that leases their home:

  • A copy of the HOA’s CC&Rs
  • HOA rules and regulations must be a condition in all lease agreements
  • Property owners or their property managers will be held responsible for tenant violations
  • Tenants must communicate with HOAs via the property management company
  • Multiple tenant violations can lead to termination of residency

As you can see, there is a lot of responsibility that falls onto property owners and their property managers when leasing a home that is a part of an HOA.

Here are some ways you can lessen that burden and ensure a smooth tenancy that satisfies both your community’s HOA board members and your tenants.

Know Your HOA Bylaws . . .

. . . and follow them.  It is a good idea as a property owner to read your HOA’s CC&Rs thoroughly.  Your Montgomery County property manager should do the same.  This prevents any unusual violations, such as parking in your driveway, from occurring.  After all, violations result in fines and possibly termination of your tenant’s stay.

Communicate with Your Neighbors

One of the benefits of owning property within an HOA community is that all of your neighbors are in the same HOA as well.  Everyone is following the same rules set forth by the HOA and everyone pays the same monthly dues.

In the case your HOA begins enforcing rules that you feel are unnecessary, or hiking monthly dues beyond that of what is reasonable, reaching out to neighbors you already know to voice your frustrations will be a lot easier.  Plus, you can all band together and make a common complaint against the HOA board.

 

Get Approval for All Changes

Yes, this can be tedious, and often seems unfair.  However, living in an HOA means you must have approval for all exterior changes to your home and landscaping, backyard included.

To make things easier with a tough HOA that enforces every single bylaw perfectly, just get approval first.

Getting approval will protect you from fines, complaints from neighbors, and legal trouble.  In addition, it is important that your property manager enforce this with your tenants as well.

Make sure your tenants are aware they cannot make any changes, even small ones such as adding a pet fence in their backyard, without gaining prior approval.

 

Pay Your Dues on Time

To Avoid Issues, Be Sure to Pay Your HOA (Homeowner's Association) Dues On Time

This seems obvious, but a quick way to get on the wrong side of a tough HOA is not paying your dues.  If you refuse to pay your HOA dues, or even just fall behind, your HOA may have the power to foreclose on your home.  Chances are very slim that late dues would result in the foreclosure of your home, but that hefty price for falling behind on dues is not worth the risk.

 

If You Get Fined, Pay Up

Maybe you have fallen victim to the toughest HOA in the country.  As unfortunate as that is, if you receive a fine and the HOA acted within their power to impose such a fine, the best option is to pay the fine.

However, there are three additional options for dealing with an HOA fine if you adamantly believe you shouldn’t have to pay it:

  • Ask for a variance. This means you or your property manager are requesting the HOA make an exception to the bylaw violation.  If the HOA does not initially agree, they may hold a hearing where other homeowners can come to hear your case and make a decision.
  • Take legal action. If the HOA was in violation of their power, with the help of your property management company, you can file a lawsuit against your HOA in response.
  • Don’t Pay. Although not recommended, you can refuse to pay the fine.  However, if you are dealing with a tough HOA, risking additional fines and a possible foreclosure is simply not worth it.

 

In the end, dealing with an HOA can be difficult at times. However, there are some wonderful benefits in owning property in a Montgomery County HOA that you may feel are worth the potential extra hassle.

If you are looking to take some of the work off your shoulders, and the stress of dealing with a tough HOA does not sit well with you, contact Bay Management Group today.  Working solely in property management and ready to take on the task of managing your property, tenants, and tough HOA, BMG will assure you peace of mind.

Bay Management Group is knowledgeable about how to draft solid lease agreements that include HOA regulation compliance and will protect you should any legal issues arise.

In addition, we are exceptional at taking care of tenant screening and placement, maintenance issues, rent collection, and everything in between that involves your property and tenants.

So, contact us today and start handling that tough HOA in a proactive and beneficial way.

6 Tips to Successfully Show a Rental Property

Posted on by Bay Management Group

how-show-maryland-investment-property

Showing a client’s vacant rental property to prospective tenants is one of the principal roles of a property manager.

Though emphasis is often placed on appealing to the right tenant pool, as well as the importance of proper tenant screening, the truth is that the in-person showing of the home to potential renters is just as crucial.

Staging a vacant rental property can be done easily and without a great deal of time.  With a little bit of curb appeal and a nice looking interior, you will have more tenants wanting to lease your client’s rental home than you know what to do with.

But there is more to getting a tenant to sign a lease agreement than just a nice exterior and inviting interior.

Today we will look at the top tips for showing an unoccupied rental property.  If you follow these simple yet effective steps, you will find great success in your showings.

 

6 Tips for Wowing Tenants with Your Rental Property Showing

1. Remember The Basics

Every property manager knows that there are basic staging rules for showing a potential tenant their client’s rental home.  Let’s look at those basics:

  • Do not underestimate the power of curb appeal. Make sure the yard is well maintained, the property is freshly painted, and the all-around feeling is inviting as a tenant pulls up.
  • Clean, clean, clean. Nothing turns a potential tenant away faster than a dirty home interior.  Make sure to inspect the property beforehand to make sure its cleanliness meets you and your client’s standards.
  • Redecorate or upgrade. Install new carpet, paint the walls an appealing and neutral color, fix the window treatments, and make sure all appliances are updated and working.

In the end, these selling points will make a huge difference in whether a tenant is interested in leasing a property from your client.

 

2. Pre-Qualify

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As mentioned earlier, tenant screening plays a significant role in the leasing process.

Before you begin showing a property to interested tenants, pre-qualify them.  This will save you time, energy, and money and will ensure you are only showing the property to qualified tenants.

Here are some great topics to ask about when someone calls to set up a property showing:

  • Their credit score
  • Reason for moving
  • Estimated move-in date
  • Whether they have pets
  • Smoker or non-smoker
  • Number of people moving in
  • If they have references
  • Eviction history
  • Estimated income
  • If they have any questions

Keep in mind that pre-qualifying tenants for a property showing cannot violate any of the Fair Housing laws that are in place to protect prospective tenants.  In addition, make sure the pre-qualifying questions are the same for all prospective tenants to avoid discrimination allegations.

 

3. Be Safe

have-emergency-plan-maryland-rental-property

Before showing a rental property, put your safety first.  Every year a number of realtors, property managers, and landlords are injured showing homes to prospective tenants.

If someone calls asking to see a rental home, get his or her full name and conduct a background check on your state’s public record website before agreeing to show the property.

Here are some ways you can protect yourself from potentially harmful situations while showing rental properties:

  • Always show properties during the daytime, never after dark
  • Call your office every hour to let them know where you are
  • Introduce yourself to neighbors so they are familiar with you and your vehicle
  • Have an “escape” plan in place for when something feels “off” (for instance, take an emergency phone call outside or inform the potential tenant another agent is on the way)
  • Always leave all doors unlocked and stand by the doorways while showing the property
  • Park on the curb rather than the driveway for a quick getaway, if necessary

Gathering information ahead of time about potential tenants and being aware of your surroundings will ensure your safety as well as a more successful property showing.

 

4. Make a Good First Impression

Small, seemingly insignificant (yet very effective) things you do before, during, and after a rental property showing will leave a lasting impression on potential tenants that view the home.

There are several ways to convince potential tenants that this property is perfect and that they need to sign a lease right away.  For instance:

  • Call and confirm scheduled showings a few hours beforehand
  • Set the temperatures in the rental to be comfortable upon arrival
  • Turn on all of the property’s lights
  • Dress professionally and check your personal hygiene
  • Smile when you greet tenants, shake their hands, and formally introduce yourself
  • Show them the grounds, both on and off the property (for example the pool, gym area, laundry facility, parking structures, BBQ areas, or roof decks)
  • Have general information about the property on hand so the tenant can remember you later. Include things such as pictures of the property, square footage, monthly rent and deposit amounts, number of bedrooms and bathrooms, and any extra amenities
  • Have applications ready for tenants to fill out immediately following the showing

In short, making a tenant feel welcome, at ease, and well informed about the property can go a long way in securing a lease agreement.

 

5. Be Informed

In addition to knowing everything about the property you are showing, it is a good idea to be knowledgeable about the surrounding area.  People often move to certain locations because they like the neighborhood or have heard it is great.

Emphasize the area’s selling points – nearby restaurants, shopping, entertainment, attractions, schools, parks, and roads for commuting.

The more information you can give potential tenants on the spot, without them having to pry, the better equipped and more trustworthy you will seem.  Plus, this information will help them to make a quicker decision and possibly forgo viewing other properties.

 

6. Follow Up

maryland-property-managers-should-have-emergency-plan

Property managers should base their entire showing process around customer service.  Doing so shows potential tenants that you are a reliable company that they can trust and easily contact to work out any issues that may arise with the property, should they decide to lease.

A day or two after showing the property, consider sending a follow-up email or making a call to the potential tenants who saw the property.

Make sure they have no further questions about the property or leasing process and wish them luck in finding their next home.

Although this seems trivial, a little kindness can go a long way when it comes to deciding which property to lease and call home.

In the end, the way you present yourself and your client’s property to potential tenants can make all the difference when it comes to getting a lease agreement signed.

By taking the proper steps before every showing, you ensure that your client will be satisfied with the amount of effort you put into filling their vacant rental.

On top of that, going above and beyond when showing rental properties can help motivate the most qualified tenants to lease your client’s property, making it a win-win situation for everyone.

 

Landlords Beware: How to Avoid Rental Fraud

Posted on by Bay Management Group

beware-scam-maryland-property-management-company

Rental fraud: What is it and how can Maryland landlords avoid it?

For those of you who have yet to experience the horror of rental fraud, we are here to explain to you exactly what it is.

Rental fraud is when someone who is not you or your Maryland rental management company claims to own your rental property and proceeds to lease it out to unknowing tenants.

Scary, isn’t it?

Rental fraud can lead to several difficult situations:

  • Security deposit and first/last month rent is collected by the fraud. Then, come move in time, tenants have no way of accessing the actual property. Meanwhile, the fraudulent landlord is already on the run with money in hand.
  • Your property’s locks are changed and tenants actually move into your rental home having no idea that their “landlord” is a fake.
  • You are forced to remove the innocent, although illegally residing, tenants who have been scammed.
  • You are left with the mess of having to prove in a court of law that the property is actually yours.

Though avoiding rental fraud may not be entirely possible, there are some proven strategies that can help reduce the chances of you ever falling victim to this type of scam.

 

Rental Fraud Comes in Many Formsbeware-maryland-rental-fraud

As mentioned above, rental fraud is when someone poses as either the landlord or property management company to illegally lease out your Maryland rental property. However, there are other types of rental fraud as well.

Landlords are also vulnerable to the types of rental fraud outlined below, and should be aware of their susceptibilities at all times.

 

The Eviction Scam

This type of rental fraud is when a tenant moves into your property with no intention of ever paying rent. As a result, you are forced to evict them.

Unfortunately, the eviction process can sometimes take months to pan out, as well as cost a great deal of money. This leaves the tenant plenty of time to live in your property while lining up another place to scam.

Avoid this scenario: The best way to prevent a tenant who is consistently evicted from every place they occupy is to conduct thorough screenings of each and every tenant you consider placing in your property. This should include a background check, credit check, income verification, and reference follow-up.

Another great tip is to meet each prospective tenant face-to-face, even if your rental management company typically does all the work for you.

Sometimes a first impression will leave you with a gut feeling not to go with a particular tenant, which can be helpful in avoiding scams.

 

The Utility Scammaryland-property-managers-fight-utility-scams

Did you know that many states hold landlords responsible for the water bill despite what the outlined lease agreement states?

Sometimes a tenant will avoid paying the water utility bill because they know that after it goes unpaid for long periods of time, the water company will go after the owner of the property (you) to pay the bill.

To add to this, many tenants are aware that the water company typically does not shut off the water supply to any given residence. This means your tenant is using water on your dime.

Avoid this scenario: The best way to avoid this utility scam is to call your local water company from time to time to make sure your tenant is current on all of their bills.

In addition, it is best to have your property management company draft a detailed lease agreement outlining the responsibilities regarding utility payments. This way, should your tenant neglect their financial obligations, you have a way to prove in court who was responsible for what.

 

The International Scambeware-maryland-international-rental-property-management-scams

This highly popular scam is an unfortunate one that many landlords fall prey to. Also known as the Nigerian 419 scam, this type of fraud involves a prospective tenant from overseas looking to lease your rental property in the near future.

The fraudulent tenant will send you a check for the amount owed at move-in, plus extra “by accident.” This extra money is usually double what you asked for move-in costs.

The fraud will then ask you to wire back the excess money and before you know it, the original check that was sent to you turns out to be fraudulent while the money you have wired back to this person was your real, hard-earned cash.

Avoid this scenario: It is best to not deal with overseas tenants, unless you have a professional helping you with the background checks.

In addition, never accept a certified check from anyone overseas. These checks will usually clear and then bounce weeks later because they are fake.

If by chance you are accepting money from an overseas tenant, only accept money orders through a reputable company, such as Western Union.

 

Monitor Your Vacant Propertiesmonitor-vacant-maryland-rental-properties

In addition to the above-mentioned rental fraud scenarios, there are other ways to avoid getting scammed by sneaky people.

Your Maryland rental property is most vulnerable when it is vacant. The last thing you want is someone breaking into your property and taking up residence with a fake lease agreement.

Should you notice someone squatting in your vacant home, chances are high that the police will have very little authority if the “tenants” have what seems to be a legitimate lease agreement.

The heartbreaking thing is that sometimes these scammers will demand you pay a “ransom” for them to leave your property. This not only costs you money but allows the trespassers a free pass. They never have to take responsibility for their actions and actually make money off of their scam.

And, if you decide against paying the frauds off, this situation will still cost you countless hours and money as you wade through the courts attempting to prove the lease agreement is fake and the “tenants” are indeed trespassers.

Avoid this scenario: Monitor your vacant properties regularly to make sure no one has stepped in and taken up residence.

You may even consider adding an active security system to your Maryland property so that if someone does attempt to break in, the police will have authority to charge him or her appropriately.

 

Watermark Your Photographs

These days, advertising vacant properties online is the norm. And, if you utilize a reputable rental management company, such as Bay Management Group, your rental home is promoted across several platforms to expose your vacant property to the widest pool of prospective tenants.

With any professional rental property ad, images of the home are a necessity. Anyone looking to lease a home wants to have a clear idea what the property looks like before inquiring about it.

The problem is, if someone if posing as you or your rental management company and posting a vacancy online, innocent tenants interested in your property may get scammed or end up living in your home without permission from the true owner (you).

Avoid this scenario: Add a watermark to all images of your property as an extra layer of protection. A watermark makes it more difficult for a fraudulent landlord to steal photos of your property and will likely cause them give up on attempting to scam you.

 

In the end, rental fraud can be a scary situation no matter the type you are involved in. That is why being proactive about your Maryland income properties is absolutely critical to keeping your money out of the hands of scammers and keeping unwanted tenants our of your properties.

If you are looking to safeguard your Maryland rental properties to the fullest extent, contact Bay Management Group.

With knowledgeable staff working solely in property management, Bay Management Group can protect you, your rental property, and your tenants from all types of rental fraud.

Peace of mind is priceless when it comes to your rental property business.

Use Bay Management Group to conduct thorough background checks, draft airtight lease agreements, and inspect your home regularly to make sure everything is in its right place.

 

The Lease Agreement Deconstructed

Posted on by Bay Management Group

understanding-harford-county-property-management-lease
If you have ever leased an apartment or home, you will likely be familiar with the lease agreement that was signed by both you and the landlord.

Yet, have you ever thought about the actual components that make up a lease agreement?

If you have not, and are thinking about using your Harford County home as a rental property in the near future, maybe you should start.

Drafting a solid lease agreement, even if completed by your Bel Air property management company, is a crucial step when it comes to leasing out your rental property.  It outlines important information, defines each party’s responsibilities, and becomes a legally binding document that can be relied upon if a landlord-tenant dispute ever arises.

Today we break down a traditional lease agreement into its most basic parts so that you will know what must be included should you decide to enter the rental property business.

Making sure that each of the following elements is clearly defined in your rental agreements will ensure that your lease agreement in legally compliant, that everyone is on the same page, and will hopefully prevent any problems from popping up unexpectedly after your tenant takes up occupancy in your Bel Air home.

 

The Main Elements in a Lease Agreement

Though every lease agreement that you draft will differ depending on the property, it is important to understand the basic framework that makes a lease agreement a legally binding contract.  This is why many landlords hire a high-quality property manager in Bel Air to handle all aspects of their income properties, including drafting lease agreements.

Having a team of experts knowledgeable about state and local laws related to your income property is the best way to protect both you personally and your rental business.

 

Tenant Names

Include the legal first and last names of all tenants that will be residing in your Bel Air rental property.  These tenants will be held accountable for the terms outlined in the lease agreement, including but not limited to, rent payment, property maintenance, and damages incurred.

This section should also include your legal name and your Bel Air property management company, if applicable.  This way, it is clear from the start who the contract binds together and which parties are involved.

 

Lease Term

It is important to include the length of time you would like the lease to be valid.  In other words, how long the tenant is allowed to occupy your property before a new lease agreement must be agreed upon. 

You should determine a start date (commencement date) and an end date (expiration date) so that both you and your tenants clearly understand when the occupancy of your property will begin and end.

It is not unusual to have your tenants agree to a one year lease.  This allows for a consistent supplemental income to flow into your bank account, while also allowing you to raise the monthly rent amount fairly easily after the year is up.

This section is also a good place to include basic identifying info about your Bel Air property including its official name, if it has one, as well as its full address including any unit numbers.

Don’t forget to add the city, state, and zip code either.  Although this may sound obvious, you want to be as thorough as possible to avoid any potential confusion.

 

Payment of Rent

collect-rent-tips-property-manager-harford-county-mdIt should already be agreed upon between you and your tenant how much the monthly rent will be.  However, you must also include this in writing in the signed lease agreement.  Include things such as:

  • The total amount of rent due
  • The exact date the rent is due (g. the first of every month)
  • The forms of payment accepted and how to make said rent payments
  • Where rent should be delivered if applicable
  • The consequences for a late or non-payment of rent

Having all of these details in your lease agreement will ensure you that your tenant has willingly acknowledged and understood their financial obligations.

It also protects you in the event that you have to evict your tenant for non-payment.

 

Deposit Amounts

If you are collecting any type of deposits from your tenant up front, you should outline this in the lease agreement.  This way at the end of the lease term, when most people forget how much they paid and when, it can easily be referred to in the signed agreement.

Deposits can include things such as:

If you do collect a security deposit, which is advisable, make sure you understand your state and local laws regarding that money so that you don’t land yourself in trouble later on.

 

Fees, Fines, and Charges

There should be a section in your drafted lease agreement that will detail any potential fees or fines the tenant may face.  For example:

  • Late rent charges
  • Bounced check fees
  • City fines
  • HOA fees and fines
  • Attorney and court fees

 

Tenant Responsibilities

Oftentimes a tenant is unaware of basic maintenance or utility duties they are responsible for.  And while providing your tenants with a tenant manual at the beginning of the lease term is definitely helpful, it is important that serious matters be included in the lease agreement too.

If you are paying for the properties water, sewer, and trash bill make sure that is included.

If you want your tenant to maintain the backyard pool maintenance, include that.

If you are prohibiting certain types of alterations to the property (such as painting the walls), you guessed it, include it.  This way, your tenant can never claim they didn’t know.

It is also important to add how a tenant can call in a maintenance request or repair.  After all, this is your Bel Air investment property.

The last thing you want is a tenant who has a pressing issue with your home’s plumbing and no way of contacting either you or your Bel Air property manager.

Include the process for making a maintenance request and include phone numbers that can directly connect your tenant with someone that can help.

 

Property Access Expectations

harford-county-property-manager-talking-tenant

Here, you can outline when your tenant can expect you to enter the premises (with proper notice of course).  This can be for inspections, to check on repair statuses, or even to show a rental property that is on the market to potential buyers.

Make sure you include what kind of notice will be given and what will happen if there is no response to said notices.

While you may not enter the premises whenever you want, especially with the intent to harass your tenant, your tenants are also prohibited from changing the locks on your property, denying you access.

 

Use of the Property

While most people have a general understanding that breaking the law is well, illegal, it is a good idea to state the intended use of your property as it applies to your tenants.

This may include provisions such as:

  • The property is to be used as a residence.
  • There is a limit on who can stay in the residence and for how long.
  • No business can operate out of the property.
  • No illegal activities will be permitted.
  • Peaceful enjoyment of the other tenants and neighbors is required.

In this section, add in the potential consequences for breaking the rules.

 

The Signatures

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After the lease has been drafted, discussed, and agreed upon by both parties, make sure everyone on the lease agreement signs their name.  This proves everyone is in agreeance and confirms that a formal understanding of the terms and conditions of the lease agreement has been met.

 

Final Thoughts

Leasing your Harford County rental property starts with a solid lease agreement and high quality tenants.  These two things will often lead the way, whether positive or negative, for the kind of lease term you and your tenants will experience.

If you are interested in hiring a property manager and have a rental home in the Bel Air area, contact Bay Management Group to help you.

Not only will we handle all things property management related throughout the lease term, we will also get you started on the right foot from the get-go with a thorough and legally compliant lease agreement.

Contact us today and see how we can help you draft your lease agreement, place quality tenants in your Bel Air home, and manage everything else that comes next, so you can have the peace of mind that you and your property are protected.

 

The Most Common Lease Clauses Explained

Posted on by Bay Management Group

Once your Bethesda property management company has found a suitable tenant for your rental home, and you have agreed on the terms and conditions of the lease, it is time to place those terms on paper in the form of a legally binding contract.draft-lease-clauses-bethesda-montgomery-countyThis contract, also known as the lease agreement, is a formality that each party must agree to and sign so that both you and your tenants are protected.

While some lease agreements are short and sweet, sometimes they can be pages and pages long, outlining every single detail that is involved with leasing your rental property.  Further, as you gain experience as a landlord, you may choose to add additional provisions into your once simple lease agreement template.

Today we will look at some of the most common lease agreement clauses and riders that many landlords outline so that both landlord and tenant understand their legal responsibilities.

Having a basic understanding of each of these lease clauses will help you in the future when you are drafting a lease agreement for your Bethesda income property .

 

The Basic 5 Lease Clauses

All lease agreements must include some very basic personal information regarding the terms of occupancy.

Here are the basic 5 lease clauses that should be in every single lease agreement:

  • Involved Parties. Every lease agreement must clearly state in full who the lease agreement is between.  In the case of your Montgomery County property, this means outlining that the agreement is between you (the landlord) and the tenant.  It is a good idea to include somewhere in this provision whether you are employing a Bethesda property management company as well.
  • Identification of Property. Outline the name of your property and its full mailing address.
  • Terms of the Lease. This clause determines for how long the lease agreement will be valid.  This includes the start and end dates of occupancy.
  • Rent Payment Terms. This will show the tenant what financial responsibilities they have for leasing your Bethesda home.  It should include the rent amount and when it is due.  In addition, any grace periods, late fees, and all details regarding the submission of payment should be included.
  • Acknowledgement Clause. This is the end portion where each involved party signs and dates the lease agreement.  This makes it a legally binding contract that can be enforced in a court of law.  If either party does not sign and/or date the agreement, it may be found to be null and void.

 

Security Deposit Clause

security-deposit-lease-clause-bethesda-md-rentalWhenever you are leasing a rental home, it is a good idea to collect a security deposit from your tenants before they move into your property.

This deposit will protect you from several things including non-payment of rent, damage your tenant causes to your rental property, and any other expenses incurred due to a breach of the signed lease agreement.

It is also a good idea to spell out in your lease agreement the terms surrounding the security deposit so that your tenant is clear about what is required to receive a refund at the end of the lease term.

You should include things such as:

  • The amount collected
  • Terns regarding storage of the deposit (i.e. an escrow account)
  • The interest rate the deposit will collect during the lease term
  • Reasons for deducting from a refund at the end of the lease term
  • The process for returning the deposit

Not sure how to word a detailed security deposit lease clause? 

If you are not relying on a Bethesda property management team to draft you lease agreement, look here for some security deposit lease clause examples.

 

Security Deposit Acknowledgement Form

In addition to having a security deposit clause built into your lease agreement, you should attach a separate form that will serve as a rider to the original lease agreement.

This rider will acknowledge the receipt of your tenant’s security deposit amount.

Here are some reasons you may want to include this official rider into your lease agreement:

  • Formal acknowledgements serve as proof you collected a security deposit from your tenant and fulfills any state requirement that you notify the tenant in writing of the deposit terms.
  • Acknowledgement also serves as proof that a tenant did indeed provide a sum of money to the landlord to be used as a security deposit.

In Maryland, it is important that you follow the outlined state regulations when it comes to collecting and refunding a security deposit from your tenants.

Your Bethesda property management company will understand the state and local laws and can help you handle this in a legally compliant way.

 

Lead Paint Disclosure Clause

Lead poisoning is a very scary and serious situation.  And unfortunately, as many Bethesda properties are older, the risk of lead contamination is higher than in some newly renovated areas.

As required by Maryland state law, if your rental home was built before 1978, you must provide any new tenant with lead poisoning education materials and proof that your home has been professionally inspected and certified as being safe and habitable.

In addition, if your home was known to be affected by lead point at one time it is your legal duty to disclose this information to your tenant before they occupy your property and have them acknowledge that they have been properly informed and warned of the dangers that lead-based paint poses.

This can easily be done using a lease agreement rider labeled “Lead Paint Disclosure Statement.”

 

Pet Policy Clause

bethesda-md-rental-lease-petsBethesda tenants may want to bring their pet, whether that be a dog, a bird, a cat, or even a large hundred gallon fish tank to their new home.

If you prefer to prohibit pets from residing in your rental home, you must outline this in your lease agreement to avoid any trouble later.

If you decide to allow pets, again it must be outlined clearly in your lease agreement so your tenants understand whether they are allowed to have a pet or not.

You should also include any limitations on the pet policy, such as breed exemptions and size requirements, tank restrictions in upstairs locations, and what will happen if any of these terms are violated.

In addition, you should mention outright whether a pet deposit is required, refundable or not, and whether an additional monthly rent fee will be added as a result of having a pet.

 

 

Opt-Out Clause

Sometimes you may want to give your tenants the option to legally break the lease agreement and move out prior to the end of the lease term.

Called an “opt-out clause,” this clause will essentially let a tenant break a lease early for an agreed upon fee that must be paid when moving out.

This type of lease clause gives your tenants the assurance that if something happens and they must move, they will be okay so long as they pay the fee.  In addition, this protects you in the case your tenant leaves unexpectedly by covering most of the expenses required for placing a new tenant in your property.

This can also help prevent tenants from just up and leaving when circumstances change, leaving you short on rent and facing the difficult process of finding your tenants and taking them to court.

 

Final Thoughts

There is a lot that goes into leasing your Bethesda income property.  And, without proper experience in lease agreement drafting, you run the risk of failing to include some of the essential lease clauses that serve as protection to both you and your tenants.

If you have a rental property in Montgomery County and are looking for a quality property management group to help you with matters such as lease agreement drafting, call Bay Management Group.

We are up to date on all rental property federal, state, and local laws and are focused on every detail related to  property management.

The team at Bay Management Group will have every detail you wish to have included, plus those you never knew should be included, placed into your lease agreement so that you have the peace of mind that everything is protected.

 

How to Respond to Negative Tenant Feedback

Posted on by Bay Management Group

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You might not think about it every day, but your tenants are taking note of the experiences they have in your rental properties. And some day, they may just share those experience publicly online.

Because consumers these days turn to online reviews to help them make purchasing decisions, your reviews are more important than ever. But don’t be alarmed – negative feedback offers a few great opportunities for improving your reputation and growing your business.

If you have negative reviews and want to know how to use them to your advantage, read the following guide on approaching your negative tenant feedback.

 

The Annapolis Landlord’s Guide to Handling Negative Tenant Feedback

Find Negative Feedback Quickly

It’s important to have an action plan for responding to negative reviews.

If you only have a single rental property, you probably won’t be listed anywhere on a major website like Yelp. But if you own a large rental property business in Annapolis, MD, you may already be mentioned there quite a few times.

Figure out where your tenants will most likely go to post their negative feedback, and monitor those sites regularly. Some even allow you to set up notification emails that let you know the moment someone has mentioned your business in a review.

When you do find a negative comment (on social media, a review site, or elsewhere), read it quickly and begin processing it. It may be somewhat unpleasant, but it’s necessary. Whether the commenter’s gripe is legitimate or not, you should still acknowledge their issue and take action to respond.

 

Respond Directly and Professionally

Most people who see a negative review of your business won’t write you off immediately. And if they see that you responded to such a review in a pleasant and helpful way, they’ll likely gain more respect for you.

Plus, if you respond directly to the comment (instead of elsewhere on the same page), you’ll let the tenant themselves know you actually care about their feedback.

Of course, it’s hard to stay positive when someone online bashes the business you’ve built with your own hands. Your first impulse might be to lash out at them and point out all the reasons why they’re wrong.

Don’t do that. Instead, take your fingers off the keys and reconsider.

Take time to formulate a professional and appropriate response. Acknowledge the comment, explain your side of the story (as calmly as possible), and say you appreciate their input.

The truth is, a negative comment is a perfect time to highlight the many positive aspects of your rental property business. It’s easy to frame your response in such a way that it compliments your business while making the commenter feel heard and respected.

 

Consider a Private Response

If you’re unsure about the credibility of the forum in question, you can also consider responding to the tenant privately.

The challenge here is figuring out exactly who the tenant is. Most of the time, people who post negative comments online stay anonymous. There are times, though, when you’ll get lucky and be able to identify the tenant.

If they still live in your property, great. Contact them and let them know you wish to address their concerns.

If they don’t still live in your property, you might still have their information lying around – like phone numbers and email addresses. Whatever way you’ve contacted the tenant in the past, try reaching out to them about their comment.

If you take this course of action, you should be absolutely positive in your response. You wouldn’t want the tenant quoting any harsh words from you online as it might serve to further damage the reputation of your business.

Or, if the website allows users to exchange private messages, send one to the tenant’s account. If you’re proactive about trying to resolve the issue, they may even remove the comment altogether.

 

Take Constructive Criticism

If the tenant issues a complaint that you know to be legitimate, embrace their constructive criticism.
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First, you can respond with words – apologies and sympathies. Next, you can respond with actions that show you wish to improve your business whenever possible.

For instance, if a tenant expresses frustration that your communication with them has been sorely lacking, it might be time to upgrade to a more advanced system. You could completely overhaul your computer systems and purchase new software to make it easier – or maybe consider hiring an Annapolis property management company.

Whatever you do, when you recognize a real problem, address it as soon as possible.

 

Delete the Review if Necessary

In the United States, the First Amendment protects the freedom of speech. In other words, there’s very little you can do about a tenant who has a negative opinion of your rental property business.

However, if a tenant posts a negative review filled with statements that are factually incorrect, you may have other actionable options.

Some websites have a feature that allows you to report comments and request that they be deleted if they don’t comply with their specific guidelines for reviews. And most of the time, one of those guidelines forbids libelous speech.

If a false statement of fact is posted and you can’t remove it, you might want to consider a cease and desist letter from an attorney. The letter might result in the removal of the false statement, but it could also be posted on the Internet to support the upset tenant’s case.

 

Promote Your Positive Reviews

One of the best ways to respond to negative feedback is to show examples of glowing reviews you’ve received in the past.

For instance, if a negative review complains about your maintenance services, see if any of your positive reviews mention how attentive your property management team is to their needs. Highlight this review and feature it front and center whenever possible so that other potential tenants will see both sides of the story.

On websites like Yelp, this is very important. Because so many prospective renters use Yelp to look at your ratings before they consider renting from you, you might as well manage your presence there.

 

Keep Communicating

Technology has made it easy for tenants to share their experiences on various review sites – but it has also made it a lot easier for you as an Annapolis landlord to open channels of communication with them.

Encourage your current tenants to write honest reviews, both positive and negative. If you do so, you’ll demonstrate that you take customer reviews seriously. It’ll also help to increase your number of positive reviews.

The more reviews you have in total, the more accurate the picture will be of your rental property.

Also, you just may be able to convert an unhappy reviewer into a happy resident. Once they’re satisfied that you’ve addressed their complaints, they may even renew their lease or post a follow up statement to tell the world the problem was resolved.

It’s never easy to run a rental property business, but by learning from your negative feedback, you can improve your service in the future.

 

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Turn Your Rental Property into a “Smart Home” & Attract High-Paying Tenants

Posted on by Bay Management Group

If you want to attract high-paying tenants, you need to realize that they often look for convenient, luxurious amenities that will improve their quality of life at home.smart-rental-property-columbia-howard-county-manager-tipsOne of those amenities is “smart” technology.

When you install smart devices in one of your properties, you can turn that property into a smart home, which can increase its value in the eyes of potential renters.

If you’re unfamiliar with the term “smart device,” it simply refers to an electronic device that is generally connected to another device or network of devices. A good example of one of these devices is a smart refrigerator, which keeps track of its contents and alerts the tenant via your smartphone when they’re running low on supplies.

Smart devices are so appealing because they give your tenants the ability to control standard home functions with the touch of a smartphone, tablet, or computer—the ultimate convenience.

But don’t worry – you don’t have to spend a lot of money on expensive smart devices like smart refrigerators.

There are several inexpensive options to consider so you can keep costs low while justifying a higher rent rate and attracting higher-quality tenants.

Let’s talk about 3 devices you can install in your properties now, and along the way, we’ll discuss ways to sell potential tenants on the value of these devices.

 

How to Turn Your Columbia Property Into a Smart Home

1. Install a Smart Thermostat

Did you know that heating and cooling accounts for more than half of the energy used in the average home, which makes it one of the largest energy expenses for most homes?

With that in mind, it’s easy to understand why giving a tenant more control over their heating and cooling with a smart thermostat makes your property more appealing – it gives them a lot more control over their energy costs.

Smart thermostats allow your tenants to remotely control their home’s temperature (and monitor energy usage) with a smartphone, tablet, or even their desktop. All they have to do is download an app onto their device to adjust their heating or cooling needs from any location.

On top of that, some smart thermostats have the ability to “learn” a tenant’s behavior patterns and make adjustments accordingly.

For example, if a tenant often desires a certain temperature at a specific time of day, the smart thermostat can learn those preferences and build a heating/cooling schedule around it.

Wondering how you can express the value a smart thermostat adds to your property?

Here’s how to sell your tenants on smart thermostats:

  • Let them know that smart thermostats can make temperature adjusting more convenient. Your tenants can adjust the temperature from the comfort of their couch or from a distant location – all they need is their phone, tablet, or computer!
  • Talk about how smart thermostats can help them save money. No more accidentally leaving the air conditioning on for an entire day – the temperature can be adjusted at any time, from anywhere.
  • Appeal to environmentally-conscious tenants. Let them know that they can receive reports about their energy usage through their smartphone to help them avoid wasting energy.

 

2. Install Smart Locks

As a landlord or property manager in Columbia, MD, you understand how troublesome lost keys can be for you and your tenants. The last thing you want is to receive a call at 2AM from tenants who have accidentally locked themselves out of the property.

To prevent that situation, install smart locks in your property. These replace traditional locks and keys with an electronic system that unlocks a door once it receives a wireless signal from an authorized smartphone.

Installing smart locks isn’t just great for your tenants – it’s also convenient for you, as you can remotely manage who is allowed to open your property’s door at any given time.

In addition, some smart locks will send you a notification when one of the smartphones you have authorized has opened the door, allowing you to keep track of who has entered your property.

To sell the value of smart locks to your tenants, let them know that the smart locks will eliminate their need to keep track of physical keys. They can easily unlock their doors with their smartphone (or tablet) so they won’t be locked out of their home if they lose their physical keys.

 

Tip: Worried about what might happen if your tenant’s smart phone dies and they need to enter their home? Don’t worry – a smart lock can still be opened with a traditional key if needed!

 

3. Use Smart Bulbs

Unlike traditional light bulbs, these bulbs give your tenants the ability to use their smartphone (or tablet) to remotely access their home’s lighting system with the touch of a button.

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Smart bulbs can also include features like:

  • Motion Sensors – Some smart bulbs have motion sensors that can detect when a tenant is in the room and turn the lights on and off accordingly. No more high energy costs due to a light accidentally being left on all day!
  • GPS Activation – Some smart bulbs are able to detect the GPS in a tenant’s smartphone and will automatically turn the lights on or off once they are almost home. This allows your tenants to come home to a well-lit house.
  • Dimmable Function – This allows your tenant to dim or brighten the lights in their home by simply using the bulb’s corresponding app and saves you from installing physical dimmer switches in your property.

You can sell your potential tenants on the value of smart bulbs by describing how they can help keep energy costs low and improve convenience when it comes to making lighting adjustments.

 

Final Thoughts

Making your property into a “smart home” provides tenants with more convenience and control over the functions of their home. So if you’re looking to attract higher-paying tenants, the devices mentioned in this post may be well worth the initial investment.

And if you are looking for a property management company in Columbia to help you learn more about turning your property into a smart home, contact Bay Management Group.

Attracting high-paying tenants can seem like a difficult process, but we are here to help you with your landlord tasks, including Columbia property advertisement, rent collection, tenant screening, maintenance, inspections, and more.

 

5 Ways to Collect Rent and Get Paid on Time

Posted on by Bay Management Group

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Collecting rent is one of the most important tasks you’ll handle as a landlord. If you can’t collect rent consistently, your rental property business won’t earn you the income you need to pay the bills.

And for some landlords, collecting rent can be a serious challenge. Even with a solid lease agreement in place – which includes strict guidelines and information about additional fees for late rent payment – some tenants still fail to pay their rent on time regularly.

The question is: How do you, as a Montgomery County landlord, make sure that you can collect rent on time, every time?

Let’s answer that question today with these 5 ways to collect rent.

 

5 Easy Ways Montgomery County Landlords Can Collect Rent

1. Use an Online Payment Method

One of the newest and most efficient places to accept rent payments is online.

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There are quite a few options available online as well, depending on your specific needs. Some sites, like ERentPayment, RentMatic, or RentMerchant serve the simple purpose of allowing your tenants to pay with their bank accounts.

The price you pay for these services varies depending on your plan as well. Many sites offer basic plans that focus on rent collection, while other sites offer a wide range of services like online rent roll and the ability to upload your important documents. Some even allow you to send messages to your tenants and act as miniature social networks.

Another popular online option is PayPal. It’s free to use, but your tenants need to know exactly what they’re doing or else you might be charged a fee.

If the tenant does not mark the payment as a personal payment, for instance, you’ll be charged a business transaction fee on your end. Or, it might take several days for the payment to go through.

But remember – not everyone has access to the internet. If you wish to accept rental payments online, you’ll have to allow another form of payment.

 

2. Check or Money Order

These days, many landlords accept money orders from their tenants but do not accept personal checks, except on rare occasions.

With personal checks, there are few ways to verify if the check is valid or if the funds are available until you attempt to deposit the check. You don’t want to go through the hassle of a bounced check with your tenants.

A money order, on the other hand, is much simpler. Your tenants can get a money order from their bank, local post office, or even some convenience stores. When you receive a money order, it’s a lot like getting a gift card with the rent payment on it.

All you have to do is require your tenants to stop by and deliver their payment this way by a specified date, and you can cash their rent payments at your leisure.

 

3. Email Transfer or Direct Deposit

This option, which is growing in popularity, is seen by many in the rental properties business as a little too casual. Depending on your relationship with the tenant, though, it could be right for you.

Email transfer or direct deposits provide ease of access and convenience for instantly collecting rent payments – without going through a middleman like a rent collection website.

Because most of your tenants will have internet access and conduct their banking online, all it takes is a simple transfer of funds from their bank accounts to yours. There’s even the added bonus of automatic digital records that give you an electronic paper trail you can rely on if there’s any doubt about when you received payment.

The only real drawbacks of this system are relying on the internet, and an occasional small fee on the transfer. However, this fee is normally very small compared to most other forms of accepting rent payment.

 

4. Accept Payment By Mail

In some situations, it may make sense to have your tenants mail the payment to a certain address every month. This is especially useful if you don’t have a rental property office nearby.

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This option helps you save time because you don’t have to worry about collecting the payments yourself.

The biggest drawback for this option is undoubtedly timing. If you find one of your tenants is late, they might use an excuse like: “The check is in the mail!” They could be telling the truth, but you may still not receive the payment for several days, and you could not consider their rent as being late.

Fortunately, you can provide your tenant with pre-addressed and stamped envelopes and require a certain postmark date to make the process go more smoothly.

 

5. Use a Property Management Team

You also have the strong option of outsourcing your rent collection to a third party by hiring a Montgomery County property management company.

A property management team will take a professional approach to collecting your rent and disburse it to you with ease through electronic direct deposit or a standard check.

Montgomery County landlords can hire a company to not only collect rent payments, but also to deal with tenant problems, fill vacancies, handle maintenance issues, and accomplish all other unwanted tasks.

Depending on the size of your operation and your specific needs, a property management company may be the perfect choice for your rental property business.

 

The Wrong Way to Collect Rent

One word: cash.

Cash is hard to trace, easy to lose, and you almost always have to collect it in person. The only time you should even consider accepting cash as payment is if you merely rent out a room in your home or have a single, trustworthy tenant.

But even then, you should always provide your tenant with a receipt that both acknowledges they have paid and provides you with record of them doing so.

Your best bet is to establish a strict “no cash” policy from the beginning – one that is clearly communicated in your lease or rental agreement.

 

Final Thoughts

If you put one or more of these reliable rent collection methods in place and your tenants still fail to pay on time, you may have to get tough. Sure, it’s okay to forgive a tenant who fell on hard times – once. But any more than that and you could be seen as an overly lenient landlord.

To avoid this, you have to make the consequences for late payment known. A repeatedly late tenant should be reported to a credit agency – which can significantly damage their credit.

Of course, you don’t want to report anyone. You may only include this sort of threat in the lease agreement as a means of ensuring you collect your rent on time. But you still need to know how to follow through by calling these credit bureaus:

Equifax: 1-800-685-1111

Experian: 1-888-397-3742

TransUnion: 1-800-916-8800

If you read this and realize that you don’t want to go through the trouble of collecting rent every month, maybe it is time you went with option number five: a Montgomery County property management company.

 

The Difference Between a Security Deposit and Last Month’s Rent

Posted on by Bay Management Group

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When a new tenant moves into your property, it’s time to start generating income from your investment.

And not just from the first month’s rent – you have two other instant revenue options as well: the last month’s rent and the security deposit.

Both of these are excellent ways to test a tenant’s financial stability and sincerity about renting your property for the long term. However, they’re not mutually exclusive. If you wanted, you could charge for both, one, or neither.

You need to understand the differences between charging last month’s rent and collecting a security deposit to make your decision on what you’ll ask for. Today, we’ll explore those differences.

 

How a Security Deposit and Last Month’s Rent Are Different

What is a Security Deposit?

A security deposit is a tenant’s property, and it should be held for a tenant for the duration of their tenancy.

It’s typically an amount equivalent to one month’s rent, and is intended to cover any damages beyond normal wear and tear to a property.

“Normal wear and tear” is pretty straightforward – if the carpeting shows signs of use, then that is considered “normal.” Carpeting covered in large stains, on the other hand, would not fall under the definition of “normal wear and tear.”

If, when a tenant moves out, a landlord finds that damage beyond normal wear and tear have occurred, the landlord doesn’t have to legally return the security deposit.

You should collect the security deposit before the tenant actually moves into the property. You should also be sure to include the amount of money and the date the security deposit was collected in your lease agreement.

Maryland landlord-tenant laws state that a landlord may charge a tenant up to the equivalent of two months’ rent for a security deposit. Montgomery County landlords must also provide a receipt that describes the tenant’s rights to inspections, the right to receive an itemized list of the deposit deductions, and the penalties for the landlord’s failure to comply.

On top of that, Montgomery County landlords must pay interest on any security deposit $50 or more at an annual rate of 3 percent. You can calculate your tenant’s security deposit with added interest on the Department of Housing and Community Development website.

Landlords are required to return their tenants’ security deposits within 45 days after they move out, as long as both parties met the agreements outlined within the lease. If a landlord fails to return any part of the security deposit within that period, they could face a lawsuit and may be liable for three times the withheld amount.

 

What is Last Month’s Rent?

If you require your tenants to pay a last month’s rent, you effectively give yourself a form of insurance against their leaving without giving you proper notice.

Think about it this way: if a tenant signs a one-year lease, they won’t have to make any payments during their twelfth month of tenancy.

Collecting last month’s rent is also a great way to attract higher quality renters. Such a barrier for entry allows only those potential tenants with the appropriate cash on hand to move in. Because it can be so difficult for someone of lesser means to move into a new home and pay such a substantial cost, you’ll have significantly fewer (but probably higher-quality) applicants overall.

Just remember, if a tenant has reason to legally breach their lease agreement before the twelfth month, then you would be obligated to return their last month’s rent. Instead of finding yourself simply needing a new tenant, you’d also be a full month’s rent in the hole.

For a more extensive look at last month’s rent, check out this recent blog post.

 

What’s the Big Difference?

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The biggest difference, clearly, is that you don’t have to return the last month’s rent. That isn’t the tenant’s property – it’s yours.

The security deposit is not actually “income,” but keeps you free of any financial headaches after a tenant moves out. But if you can’t legally hold onto it, you have to return it within that 45-day period.

Because a last month’s rent is part of the overall money owed by the tenant, it doesn’t technically count towards anything other than your tenant’s cost of living in your property. This forces you to pay for any cleaning or repairs needed at the end of the lease.

Your best bet to keep yourself safe and flexible is to require tenants pay a security deposit, and to follow the Maryland state laws on handling the money. The deposit should be as high as you think necessary to cover whatever potential losses you could face.

 

“Living Out” a Security Deposit

Sometimes, your tenant may try to “live out” their security deposit. Instead of paying their last month’s rent, they ask you to apply the security deposit you’ve already collected from and owe them to their last month of rent.

This can be somewhat risky for landlords. For instance, if your tenant has caused any damage to the property, you probably won’t have enough security left over after you deduct their last month’s rent to pay for the damage they caused. If your security deposit was only the equivalent of one month’s rent, this is especially true.

The best advice in this case is to never allow your tenants to live out their security deposits. If you did not require a last month’s rent when they moved in, collect the last month’s rent as you normally would and return them their security deposit within the legal period minus any necessary deductions.

 

Increased Rent Amounts and Last Month’s Rent

One issue Montgomery County property managers might run into when they choose to collect last month’s rent is the issue of increasing the amount of rent due.

If you increase the rent due every month but fail to require your tenant to increase the amount of their pre-paid last month’s rent, you can’t collect the extra amount when the tenant moves out.

When the tenant moves out, there will be a difference in what they initially paid as last month’s rent, and what the actual last month’s rent costs. But you cannot make the tenant pay the difference.

This may not be the most upsetting outcome – especially if the amount you raised the rent was small enough that its absence doesn’t impact your finances.

 

Final Thoughts

The differences here are pretty clear: a deposit is always helpful, and a last month’s rent can be as well. And whether you want to ask for both, one, or neither is entirely your decision.

Take a step back from your business for a moment, and ask yourself:

What sort of tenants will my properties most likely attract? What sort of tenants do I want to attract?

The answers to these questions are different in every individual case. What’s important is that you understand these differences and decide what you should do to grow your rental property business.

 

Tips for Determining Your Property’s Monthly Rent Amount

Posted on by Bay Management Group

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Determining the amount you want to charge for your Baltimore County rental property can be a delicate balancing act. Charge too much and you will surely experience high vacancy rates. Charge too little and your rental property business will suffer in the form of negative cash flow.

So, how do you go about deciding the perfect monthly rental amount?

Here are some tips that you or your rental property management company can follow that will establish a good rent amount that will make both you and your tenants happy.

 

How to Determine Rent Prices for Your Property

Take a Look at Your Property’s Value

One of the first places most landlords look when determining how much to lease their Parkville property for is the home’s value. The general rule states that a good and fair monthly rent falls within the 0.8 to 1.1% of the rental property’s home value.

Typically, the higher the value of your home, the lower the percentage you will be able to charge monthly for rent. For instance, a home valued at $100,000 could probably easily rent for 1% of the value, or $1,000 a month. On the other hand, a much more valuable home set at $350,000 will probably fetch a monthly rent closer to the 0.8% rate, or $2,800 mark.

In other words, the fact that your Pikesville home is worth a lot does not justify an inflated monthly rate. The only way this would work would be in cases where your property is in high demand, located in an affluent area, and has over-the-top amenities.

 

Check Comparable Rental Listings

Understanding that your potential Towson tenants will typically do their research when it comes to leasing a home is important when setting your property’s rent amount. Your tenants will know if you have priced your property too high and will go somewhere else to lease, leaving you with a vacant home.

This means you too should do your research and find out the going rate for properties similar to your own.

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Look at online ads and in the newspaper. Track this for at least a couple of weeks before setting your amount to account for any abnormal price settings. In addition, try doing the following:

  • See which incentives properties similar to yours are offering. Too many special deals may signal an over-saturation of properties available for rent. If there is an overabundance of incentives, you may have to adjust your rent lower than you had anticipated.
  • Visit some of the comparable properties. See how they actually compare to your valuable Essex rental property. Further, ask the landlord what kind of interest has been shown in the property to see what kind of activity you can expect on your own property as far as interested tenants are concerned.
  • Ask experienced professionals what they feel a fair current market rent amount is.

By investigating the rental rates of properties similar to your own, you will be able to see if charging a higher rent is justified and how likely it is to be leased quickly. If you choose to use Baltimore County’s best rental property management company, this can be done for you. Aggressively marketing your property at the highest possible rate while getting it leased quickly is Bay Management Group’s specialty.

 

Take Note of Local Amenities

Tenants are more likely to pay a premium price for your Owings Mills property if it is located near amenities such as shopping centers, restaurants, parks, and schools. This is why becoming familiar with your rental property’s surrounding area is a key factor in advertising the value of your property and justifying a higher rent.

 

Factor in Your Property’s Amenities

In addition to being geographically close to amenities that tenants like to frequent with their friends and family, don’t forget to factor the amenities your Catonsville property has into the monthly rent. Here are some of the most popular things tenants look for while deciding which home to lease:

  • Recent Renovations – Highlight any external renovations to the property, this including recently added landscaping decor, a pool, well-maintained foliage, and even on-site maintenance services. Inside your home, some of the most attractive features to offer tenants are new flooring and updated hardware and appliances.
  • Parking – Tenants are always interested in where they can park their vehicles, especially if they have more than one. If you have special covered parking, a multiple car garage, or designated off street parking spots, your tenants will want to know. And the more convenient their parking is, the higher the rent can be.
  • Utility Inclusions – Including payment of small utilities such as the sewer, water, and trash can make a big difference in how much you charge for rent.

These are just some examples of the amenities that can play a role in how much you decide to charge for rent. The more exclusive the amenity, the higher the rent can be without causing people to look elsewhere.

If you are using a rental property management company to manage your White Marsh property, you can bet they will help you with the advertising your property’s best amenities. In addition, they should be able to give you some cost effective ways of boosting your property’s value. These tips will ultimately help you attract high quality tenants willing to pay a premium rent for a great property.

 

Other Quick Tips

In addition to the tips mentioned above, here is a list of other tips that can be used to help you determine the monthly rental rate of your Dundalk rental property:

  • When your property goes vacant, experiment by trying to bump up the monthly rate a bit. If you do not get any potential tenants within the first week or two, you know that it is too high. You can then lower it back down to a more reasonable rate. The point is, vacancies often allow you to “raise the rent” easily. And, it can’t hurt to try.
  • If your property is made available and you have tons of interested tenants, step back and re-evaluate the asking monthly rate. Chances are, you have priced your property too low and everyone knows it.
  • Factor in your own expenses for running a rental property business. You have to know what your expected return on investment will be for every rent rate you are considering. Factor in expenses such as the property’s mortgage, interest, property taxes, and insurance. And don’t forget other things such as HOA fees, maintenance and upkeep, emergency repairs, and property management fees. After all, the whole point of leasing your home is to make a profit.

 

Final Thoughts

In the end, deciding how much to rent your Baltimore County home for can be complex and involves many factors. Luckily, Bay Management Group is here to aid you in your quest to find the perfect sweet spot when it comes to a monthly rent rate. We can help you with everything including property advertisement, amenity upgrade ideas, and making your home competitive with other rentals in the nearby area in regards to both looks and price.

Call us today and see how we can help you set a competitive rent and keep high quality tenants in your home for the long haul. Have the peace of mind that your home is in good hands and is bringing in the highest return on investment possible by using Baltimore’s Bay Management Group.