The Top 5 Ways to Collect Rent From Your Bowie Tenants

Top 5 Ways to Collect Rent From Your Bowie Tenant

Collecting rent from your tenants in Bowie, MD is one of the most important tasks assigned to your property management company.

After all, once rent is collected from your tenants, you get paid.

Today, we are going to look at some of the steps required to collect rent from your tenants, as well as some ways to go about collecting rent.

But first, we will review the more traditional ways of collecting rent, for a quick refresher.

 

How to Collect Rent From your Tenants

How to Collect Rent From Your Bowie Tenant

Here is a look at some of the best ways to collect rent from your tenants:

  1. Online. Allowing tenants to access an online portal to pay their monthly rent is typically considered the best way. It is convenient for your tenant, is secure, and it guarantees that the funds submitted are going to be deposited into your bank account.
  2. Check or Money Order. Though some Bowie property managers prefer not to accept personal checks (unless mailed in), a large majority of tenants still prefer to pay with paper checks. If you do not accept paper checks, money orders are a safe and simple alternative.
  3. Direct Deposit. There may be instances where you want your tenant to transfer their rent from their bank account directly into your bank account. Though not very common, it is definitely secure.
  4. Mail-in Payments. You can always go the more traditional route, and allow your tenants to mail their rent to either you or your property management company. However, the risk of your tenant’s check getting lost in the mail exists, and can cause a delay in your getting paid.
  5. In Person. There is also the option of having your tenants drop their rent off in person at your house (which is always risky) or at your property management company’s office. Again, this requires a personal check, a money order, or cash (which is never recommended).

 

As you can see, there are a number of ways to collect rent from your tenants.

But the question still remains: what are the steps to collecting rent from your tenants?

 

The Rent Collection Process

Rent Collection Process in Bowie, Maryland

The process of collecting rent from your tenants is rather simple if you employ Bowie’s top property management company to do it for you.

Here is a rundown of how your property manager should approach collecting rent from your tenants:

  1. Draft an airtight lease agreement outlining the rent rate, due date, and consequences for paying late
  2. Inform the tenant prior to move-in of the rent collection procedures, including the methods for submitting payment
  3. Collect rent each month through the approved methods
  4. Properly document all rent payments collected each month for tenants, property owners, and the IRS to see
  5. If a rent payment is late, begin the eviction process immediately – serve proper notice, file eviction paperwork, and prepare for legal proceedings if necessary

 

Although the process for collecting rent from your tenants is relatively simple, it is critical to not underestimate its importance.

This is especially true when it comes to dealing with late rent payments.

If, by chance, your tenants fail to pay their rent on time, your property management company should step in and handle the situation right away. You should not let your tenants feel that they can get away with paying their rent late.

After all, this is your rental property business, and you should treat it as such.

 

Additional Rent Collection Methods

Pay Rent Online Via ACH

There are several ways you can collect rent from your tenants during the course of their tenancy.

And, while some ways are recommended, such as collecting payments online, there are additional options that you can provide your tenants, if the situation arises.

 

Local Drop Box

This method is similar to allowing your tenants to drop their rent payments off in person to your property management company. However, this method affords both your property manager and tenant some convenience when it comes to the actual time of day that the payment is dropped off.

Rather than hand in a rent payment in person during regular business hours, having a drop box available makes dropping off rent at any time of the day possible.

Many of your tenants may work during the day and may need to drop rent off after-hours. Allowing them this option of a drop box may reduce late or delayed payments.

 

ACH Payments

ACH stands for Automated Clearing House, and involves the automatic collection of rent payments online.

Using an ACH payment service allows you to collect payments from your tenants electronically either as one-time payments, or as recurring payments by directly debiting your tenant’s savings or checking account.

This method is secure and prevents your tenants from having to use e-checks or credit/debit cards.

In addition, this method can be more cost effective than collecting payments via credit or debit card.

Why is that?

Because accepting credit and debit cards usually involves additional transaction fees in exchange for using the online rent collection service.

Lastly, collecting rent using the ACH payment method is typically faster than any online method, because payment is directly debited from your tenant’s bank account.

Processing this type of transaction is quick and easy.

 

PayNearMe

If your tenant does not have access to a computer, or prefers to pay in person but your property management company does not accept drop-off rent payments or does not have a drop box available, you can always consider offering them a PayNearMe option.

PayNearMe is a way to let your tenants pay their rent in cash to a local 7-Eleven or other business that collaborates with the PayNearMe program.

Using a unique card assigned to them for making rent payments, your tenant simply goes to the local PayNearMe business, pays their rent at the counter, and receives a receipt for payment. In response, you are immediately notified that your tenant has paid their rent in full.

This option is often much easier than getting a money order and delivering it, or mailing a check (complete with envelope, address, and stamp), and is a great solution for those that do not have online payment access.

 

Collecting rent from your tenants is one of the most important things you will do as a property owner.

And, if you enlist the help of Bowie’s best property management company, you will be placing the responsibility of rent collection in your property manager’s hands, which is a big weight off of your back.

If you own rental property and need a reliable property management company to aid you in the collection of rent from your tenants, contact Bay Management Group today.

We can help you with every step of collecting rent – from the drafting of the lease agreement, complete with rent payment details to the eviction process (if need be) – so that you don’t have to worry about any of the stresses involved in collecting money from your tenants.


5 Tips on How to Decide Your Montgomery County Rental Price

Tips on How to Decide the Price of Your Montgomery County Rental Property

You want to make a profit with your rental property.

You want to be competitive.

You want to entice tenants that you are the best.

You want to be known for having an outstanding rental property.

There is much to balance when it comes to setting the monthly rent amount for your Potomac rental property, and it can be exhausting, to say the least.

If you price it too high, your vacancy rates skyrocket.

If you price it too low, you risk losing money.

So how do you go about deciding what the perfect rental price is for your valuable Montgomery County rental property?

Finding the rental price sweet spot can be challenging if you are not sure how to go about deciding on a firm amount.

And, since you have a mortgage, taxes, insurance, and repairs to pay for, not to mention the fact that you are in the rental property business to make a profit, understanding how to set your rental property’s monthly rent rates is crucial to your success as a property owner. 

Luckily, today we are sharing 5 exceptional tips to help you set your property’s rental price.

 

How to Determine Your Potomac Rental Property Price

1. Evaluate Your Property’s Amenities

Evaluate Your Property's Amenities to Determine the Rental Price in Montgomery County

You should always set your rental property’s monthly rent rate based on how desirable it is to tenants looking for a property similar to what you own.

If you base your prices on generic characteristics such as how many bedrooms the property has, or whether it has 2 or 3 bathrooms, you are likely to come up short when it comes to positive cash flow.

Instead, evaluate your property based on things such as:

  • Updates and Improvements. Appliances, flooring, landscaping, and other amenities are highly desirable amongst prospective tenants.
  • Is it one or two stories? Does it have an elongated layout, or is it more mix-and-match with varying levels? Describing your property’s layout in detail will garner more interest from interested tenants.
  • Storage Space. People love extra closets, built-in organizers, and garage space. Highlight these things, and as a result, ask for more rent thanks to these amenities.
  • Square Footage. The more square footage your property has, the better.

In addition, you can take into account things such as included utilities, safe neighborhoods, nearby public transportation, separate or private entrances, off-street or garage parking, and even the fact that your unit is on the first floor, which can be more desirable in some places.

Depending on your property’s amenities, you will be able to determine whether you can charge more per month for rent than a neighboring property that is of a similar style and layout.

 

2. Do the Math

Many Montgomery County property managers suggest, calculating 1.1 percent of your property’s value to determine a super simple starting point.

In addition, for those with expensive properties, staying closer to 0.8% of the purchase price is common when determining a rent price.

 

Utilize Square Footage

If you want to take it one step further, calculate how much neighboring properties are going for based on their square footage, and then do the same for your property.

To do this, simply divide the monthly rental price by the square footage of the property.

Just keep in mind that smaller properties typically rent for more per square foot than larger properties.

And remember, these calculations are simply starting points for determining rent rates.

They do not take into account things such as amenities, competition, market rates, location, employment rates, and more.

 

3. Research Your Competition

Research Your Competition to Determine the Rental Price of Your Montgomery County Property

Look at where your property is located and measure it up against others in the surrounding area.

How does yours compare?

In the end, competition will affect how much you can ask for each month in rent.

Here are some things to consider:

  • Check online ads and newspapers to see what similar properties in your area are going for
  • Notice excessive incentives, and make note of the oversaturation in your area
  • Ask local realtors or other landlords you can trust what you think is a fair rent amount
  • Compare your property’s amenities to similar properties, and either add or subtract from your starting monthly rent based on your findings
  • Ask around for vacancy rates of similar properties, and adjust your rent price accordingly
  • Check out useful tools such as this calculator from Zillow to give you an idea of going rent rates in your area

It is best to have a starting point and then work your way up or down, depending on the factors mentioned above.

The more demand you can create for your property, the more rent you can command from tenants.

The key is finding what makes your property better than the others, and advertising that to potential tenants.

 

4. Determine Your Profit Margin

Property owners seek to maximize on their rentals in terms of profit.

After all, that’s why people get into the rental property business.

However, everyone’s idea of profit is different.

Thus, it’s important to decide your base profit margin, and work your way up from there.

Don’t know what your base profit margin is?

Start with this:

  • Monthly mortgage amount
  • Maintenance and repair costs
  • Insurance costs
  • Taxes

At minimum, the monthly rent you charge your Potomac tenants should cover these costs.

If not, you could easily find yourself dipping into your own pocket to cover the costs, and eventually end up in a financial crisis.

In addition to covering these costs, it is a good idea to calculate that you want to profit approximately 6-8% of the monthly rent amount each month.

This is a reasonable expectation, and should not hinder most tenants from wanting to lease from you.

 

5. Enlist the Help of a Property Management Company

Enlist the Help of a Property Management Company to Determine The Rental Price of Your Montgomery County Rental

If you have tried to make the best of all of the above-mentioned tips, and still feel like you are not sure what to set your Montgomery County rental property’s rental price at, get in touch with Maryland’s best property management company, Bay Management Group, and let us help you.

Dealing solely in the management of rental properties, Bay Management Group offers property owners all the help they could need when it comes to leasing a vacant property:

  • Aggressive marketing of vacant properties across multiple channels – major search engines, online classifieds, direct mail, and other helpful online sites
  • Advanced advertisement of vacant properties, highlighting every unique detail and commanding the highest rent possible
  • Complete tenant screening and lease drafting services

And this is just the beginning.

The staff at Bay Management Group understands what it takes to lease properties for a profit, and will help you to do just that by hitting the market hard, finding only the best tenants that are willing to pay for a property worth a high rent, and keeping them there long-term.

If are looking for the best when it comes to property management, contact Bay Management Group today.


5 Reasons to Collect Rent Online

reasons-collect-rent-online-howard-county-maryland-rental-property

Collecting rent from your Howard County tenant is no easy feat.  Especially if you have more than one rental property.

Remember, you must keep accurate records of all rent payments accepted and balance any other financial transactions that may dip into this rent collection income for when tax time comes. In the end, this adds up to a lot of work that many property owners or their property management companies do not want to deal with.

But did you know there is an easier way?

Have you ever considered collecting rent in the form of an online payment?

Well, if you haven’t, you are in the minority.  In fact, a recent survey taken by TransUnion states that 6 out of every 10 property owners prefer to collect rent online.

If you are wondering why online rent collection is becoming increasingly popular, or are just looking for some property management tips that will help make your life a little easier, keep reading to find out the top five reasons why you should start collecting your Howard County rent payments online.

 

Leading Reasons Why You Should Collect Your Howard County Rent Payments Online

 

1. It Will Save You Time

collecting-rent-online-saves-time-howard-county-rental-property-landlord

Collecting rent online from all of your Howard County tenants will save you loads of time.  Instead of frequenting your P.O. Box at regular intervals (especially if rent payment due dates differ for all tenants) or picking them up from your property manager’s office, all rent is sent directly to you.  And don’t forget, physical rent payments equate to multiple trips to the bank for depositing.

With online collection, the money deposits right into your bank account.  In the end, there is nearly zero effort on your part.  Just wait for the tenant to pay and watch your bank account grow.

 

2.  It Makes Rent Collection Easier

Not only does online rent collection act as a great property management tip that is beneficial for property owners, it makes things easier for tenants as well.  Remembering to send a rent check or grab a money order and drop it off with Howard’s leading property management company can be tough sometimes.  This often leads to late rent payments that not only upset tenants (because of late fees) but also delays the process of you getting paid.  With online payments, especially those that are automated, this doesn’t happen as often.

Additionally, you should not be surprised to find that your tenants tend to deal with most of their financial matters online. Therefore, adding the option to pay rent online is a welcome feature for many. In fact, for some tenants, writing you a check for rent is the only time a check is needed, which can be annoying for them. So, save some paper and make things easier for everyone by collecting rent payments online.

 

3. It is More Secure

 

online-rent-payment-more-secure-howard-county-rental-property

Have you ever thought about the information that is printed on the front of a paper check? That’s right, your tenant’s name, address, bank account information, and even their signature appears on the rent check they physically send your way.

This means there is a chance their identity may fall into the wrong hands en route to you and cause lots of problems for both you and your tenant. Think about it: if your tenant is the victim of identity theft and loses all of the money that is in their bank account as a result, what do you think the chance is of you getting your rent payment on time?

By collecting payments via a secure online payment system, you lessen the risk of any personal or sensitive information getting lost and mishandled.

 

4. Increased Organization

One of the greatest things about collecting online payments is that it streamlines the rent collection process.  This is especially helpful if you are managing more than one property.  By sending all payments to one localized online payment software, not only do you create digital payment records showing how much was paid and when, you have definitive proof payment was (or was not) collected in the case you find yourself facing a landlord-tenant confrontation.

In addition, these recorded payments help you evaluate your progress as a property owner.   Depending on the software you or your property management company decide to use, you may be able to gain insight into your property rental business like never before:

  • See upcoming rent payment due dates
  • View past charges that tenants owe
  • Determine annual profit/loss values
  • See detailed payment information
  • Export payment information during tax season
  • Record and view offline payments made by tenants

All of these valuable metrics will allow you to determine if you need to increase your rent come lease renewal time, if your tenants are the high quality type you want to offer a renewal to, and if there are any rent payments that are behind that may require legal action to collect.

Moreover, you can often add in other numeric expenses that can coincide with your collected rent payments such as maintenance and repairs, insurance fees, HOA fees, upgrades, and more.  Altogether, utilizing this type of software provides property owners an easy way to input their rental property finances and make better sound decisions in the future.

 

5. Reduces Rent Collection Hassles

paying-rent-online-saves-less-hassle-rental-property-howard-county

Implementing online rent payments with your tenants will lessen your stress dramatically.  No longer will you have to manually send a monthly invoice, go door-to-door collecting rent, pick up checks continuously from your management company, or even make phone calls that most tenants tend to ignore anyway.

Instead, set up automatic invoices and email reminders for all tenants that opt to receive them and let the online payment software, and your tenant, take care of the rest.  If your tenant fails to pay, the online payment hub will automatically calculate any necessary fines and fees as well as alert you.

Rent collection becomes even easier if you have an experienced Howard County property management company collecting rent for you. This is because they will be the ones alerted when tenants are behind or simply not paying, and it will be their responsibility to handle the situation according to state and local law.

If you own Howard County rental properties and are considering online rent collection, take this bit of advice: include all information regarding the collection of rent via an online portal in not only the signed lease agreement (that should always be thoroughly explained in detail to your tenants prior to move-in), but also in the tenant move-in handbook as well.  This way there is no confusion as to how you want rent to be paid and your tenants have no excuse for not paying on time.

 

If you need an experienced property management company in Howard County to help with your rent collection needs, contact Bay Management Group today.  Understanding that rent collection is how you make your money, and knowing that collecting rent can be stressful if not conducted through an online payment system, Bay Management Group has you covered when it comes to collecting your money.  Let your property management company deal with the small hassle of collecting your rent payment while you rest assured your money will appear in your bank account every month on time.


What to Do When You Find an Unauthorized Person in Your Rental Property

Discovering an Unauthorized Tenant in Your Rental Property Can Be Quite A Hassle

Discovering that an unauthorized person is living in your Montgomery County rental property can be a very stressful situation.

It is your responsibility, as a rental property owner, to maintain the property that your tenants reside in. It is also your duty to ensure that whomever is living in your investment property is authorized to be living there.

Unfortunately, despite having a rock solid lease agreement in place, there will be times when your tenant’s guest(s) may overstay their welcome, a tenant may sublet your property illegally to other tenants, or you may simply find yourself dealing with a squatter that refuses to leave.

Today we will discuss which steps you should take upon finding out that an unauthorized person is living in your rental property. This way should you or your Maryland rental property management company face an unauthorized person, you will be well equipped to handle the situation efficiently, and most importantly, legally.

 

What Constitutes as Unauthorized Occupant in Your Rental Property?

Defining an unauthorized tenant can be a tricky thing. Some property owners do not care whether their tenants have guests that stay for long periods of time. More so, some property owners do not mind if their tenants take in additional people who pitch in for the monthly rent. The way these types of property owners see it, so long as the rent is paid that’s all that matters.

However, for those of you that do care whether an unauthorized person is staying in your Montgomery County rentals, you must first understand what constitutes someone as “unauthorized.”

Most lease agreements provide that only the tenants on the lease, and no one else, can occupy the rental home. This would mean that any other person residing in the rental for any length of time is technically considered “unauthorized” according to the lease terms.

Nonetheless, there are some more specific ways to label a person as unauthorized in your Montgomery County rental.

 

Long-Term GuestLong-Term Guests Can Be Considered Unauthorized to Reside in Your Rental Property

According to Maryland law, a guest can be a visitor or family member that has taken up residence in your rental home with the permission of your tenant. They may stay for long periods and share in some of the minor expenses, but they do not contribute to the monthly rent.

To add to that, some property owners will consider long-term guests as those who have taken up residence without their permission, even though their tenants invite them to stay. Some of these guests even going so far as to change their mailing address to match that of the property.

In the end, the point is that a long-term guest, often extending their stay past 30 days, is someone who from the outside may look to be an actual tenant.

 

Sublet TenantYour Renter May Have Found Someone to Sublet Your Rental Property

If your tenant has allowed another person not on the original lease agreement to take up residence in your rental property and fulfill the responsibility of paying the rent each month, your rental home has officially become the casualty of a sublease.

 

Squatter

Squatters, also referred to as trespassers, are people who enter your rental property without the permission of property owner. This typically occurs in one of two ways:

Your Rental Has Been Subleased

In this case, your rental home has been subleased to tenants other than the ones who signed the original lease agreement with you. Unfortunately, you might not realize this is happening until you begin eviction proceedings on your original tenant, who in the meantime has been collecting the monthly rent from their sub-tenant and pocketing it.

Your Tenant Refuses to Leave

If your tenant refuses to leave your property under legal circumstances or does not pay rent, they too are considered squatters.

The true definition of a squatter is someone who breaks into your vacant property, has utilities turned on, and begins living there. However, this complex issue involves many federal, state, and local laws. That said, if a Maryland property owner attempts to evict a squatter illegally, or the squatter remains in the property for 20 years with no attempt at concealment, the squatter may retain some rights of their own, making your problems worse.

 

How to Handle an Unauthorized Person in Your Montgomery County Rental

How to Handle an Unauthorized Person Living in Your Rental Property

Now that you have a general idea about unauthorized people in your rental property, let’s look at how to handle this situation should it arise.

Handling a Long-Term Guest

Some property owners build guest restrictions into their lease agreements to prevent over-stayers that are not contributing to the monthly rent. Often termed the “Use of Premises” clause, this might include a 10-day limit on guest stays in any 6-month period. And, should a tenant wish to house a guest for longer than that, the agreement requires written approval from the property owner. In addition, some property owners outline the consequences for “hiding” long-term guests in their home by threatening fines, rent increases, and even eviction.

The reason it is important to incorporate these seemingly strict rules into your lease agreement is because guests are not subject to the terms in your lease agreement. Therefore, you or your Montgomery County property manager cannot hold them accountable for rent or for breaking any of the lease provisions.

This lease provision is necessary because someone, whether it be the original tenant, or the long-term guest, has to be held accountable for the rent each month.

 

Handling a Sublet Property

One of the most surefire ways of avoiding a subleasing nightmare is by strictly forbidding the subleasing of your Montgomery County rental. This way, should your tenant continue to do so anyway, you will have a strong defense in your case.

However, should this scenario play out and you find yourself dealing with an unauthorized tenant, there are some important things to keep in mind while you begin the process of getting the unauthorized tenants out of your rental.

  • Should you allow subleasing as part of the lease agreement, include airtight clauses requiring your permission or that of the property management company. In addition, require all sub-tenants be screened as your original tenants were. Lastly, require all parties sign the newly drafted sublease agreement.
  • Never collect rent from an illegal sub-tenant. Once rent is accepted, there are certain tenant laws that activate protecting the sub-tenant regardless of whether they are legally allowed to be in your property or not.
  • If you do not want to allow subleasing, state so in your lease agreement. Some states will not accept your claims of an unauthorized person if you do not state outright in your lease that subleasing is not allowed.
  • If you are going to evict a sub-tenant, make sure to follow the correct procedures for a legal eviction to avoid getting yourself into trouble as well.

 

Handling a Squatter

If you ask someone to leave your rental property—whether that be an unauthorized guest or a squatter who refuses to leave—and they do not vacate the premises, you are entitled to seek an eviction by filing a “wrongful detainer” action in District Court.

A “wrongful detainer” means someone who holds possession of real property, such as a house, apartment, building, or land, without the right of possession. Keep in mind however, you cannot file a “wrongful detainer” to evict current tenants or those who are holding-over.

Here is an outline of the process should you initiate a “wrongful detainer” action:

  • You will file a complaint in the District Court
  • The court summons the person accused of wrongful possession of your property
  • The person will appear in court and explain why they are not in the wrong
  • If the court sides with you, you will then be granted a warrant of restitution
  • You will then schedule a date with the sheriff to have the person/persons evicted from the property

Again, it is very important you follow exactly the legal regulations for properly evicting an unauthorized person in your Montgomery County investment property.

 

Before you find yourself dealing with an unauthorized person in your Montgomery County rental property, it is a good idea to look into employing a knowledgeable and experienced property management company to help you manage all things property related.

Contact Bay Management Group today and let us take care of business for you.

We can draft airtight and legal lease agreements, handle tenants who don’t pay rent or sublease your property without your permission, and set the ground rules for long-term guests. In addition, we will back you in court should things go that far.

Having a property manager from Bay Management Group will give you the peace of mind any unauthorized persons in your rental will be handled efficiently and legally.

 


Landlords Beware: How to Avoid Rental Fraud

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.

 


Tips for Determining Your Property’s Monthly Rent Amount

how-determine-rent-amount-baltimore-county-md

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.

rental-properties-baltimore-craigslist

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.

 


The Pros and Cons of Collecting Last Month’s Rent

Now that you have the perfect tenant for your Howard County rental property, you must decide how much money you would like to collect upfront before you tenant moves in.

While charging new tenants first month’s rent and a security deposit is commonplace, the question remains – should you charge last month’s rent as well?

benefits-disadvantages-collecting-last-month-rent-howard-county-property-management

Deciding whether to charge last month’s rent for your rental property is a decision that requires careful consideration.  There are some advantages to doing so, but as with everything, there are also significant disadvantages to consider.

While there is not one best way for property owners to collect rent from their tenants, let’s take a look at some of the reasons you may or may not collect last month’s rent from your tenants.  This way when you make your final decision regarding how much to charge you can be confident it is the right one.

 

Last Month’s Rent versus Security Deposit

It is not unusual for both landlords and tenants to confuse the terms ‘security deposit’ with ‘last month’s rent’.  Unfortunately, the amounts for each are usually the same which only adds to the confusion.

Before deciding whether collecting last month’s rent is right for you, it is important you understand exactly what that ‘last month’s rent’ means.  The same goes for the security deposit every landlord or property management company should include in their rent collection procedures.

 

Last Month’s Rent

Sometimes landlords would like to collect last month’s rent at the signing of the lease agreement.

But what does this mean? 

In short, last month’s rent is just that, a collection of money equal to one month’s rent that is to be used to pay for the monthly rent due during the last month a tenant resides in your Columbia rental property.  This money can only be applied to the monthly rental dues, whether collected directly from you or your property management company.

If a lease agreement dictates that last month’s rent is due at the lease signing, and the tenant pays accordingly, then no rent will be due at the end of the lease term.  If you decide to renew your tenant’s lease agreement, this payment of last month’s rent typically carries over into the new term and will be applied when the tenant is ready to move out.

 

Security Deposit

On the other hand, a security deposit collection is a much more complex payment made by the tenant at the beginning of the lease term.  Though much has already been discussed when it comes to security deposits, here is a refresher of what a security deposit is:

  • A collection of money made payable to the landlord directly or property management company that is usually equal to one month’s rent.
  • If the rental property is located in the Howard County area, property owners may request a security deposit equal to two month’s rent.
  • This money protects the landlord financially from things such as: non-payment of rent, breach of the lease agreement, or damage to the rental property.
  • Should any damages occur or rent payments go unpaid, this money can then be used to supplement the landlord’s financial loss.

 

So, Why the Confusion?

There are several ways landlords and tenants can confuse the two monetary collections.  Let’s take a look at the most common:

  • Landlords believe that a collection of ‘last month’s rent’ can be used for the same reasons a security deposit can (non-payment of rent and damage to the property). However, it can only be used to pay for last month’s rent if designated in the lease agreement as ‘last month’s rent’.
  • Landlords believe they can charge a new tenant first month’s rent, a security deposit up to the maximum amount, and last month’s rent. Most states consider last month’s rent collections to be a part of the security deposit when it comes to collection limits.  This means a landlord cannot collect first month’s rent, the maximum security deposit limit, and last month’s rent.  The security deposit maximum must be split between deposit and last month’s rent.
  • Tenants believe they can apply a security deposit to their last month’s rent. Unless expressly written into the lease agreement, this cannot be done.

To avoid any confusion when it comes to the security deposit and last month’s rent, it is important to thoroughly outline the collection of each in your lease agreement and make sure your tenant understands the uses for each.

 

Pros to Collecting Last Month’s Rent

Quality Tenants

If your rental property is located in the affluent area of Ellicott City, chances are your property has a significant amount of value to it.  working-with-howard-county-property-management-company

By collecting first and last month’s rent, in addition to a security deposit, you are more likely to gain a higher quality tenant.  By having that amount of money upfront, the tenant is showing they are financially responsible and the chances of missed rent payments are lower.

 

Additional Landlord Protection

By collecting last month’s rent, you add an extra layer of financial protection on yourself.  Should your tenant stop paying rent, you are already one month ahead of them.  Plus, you have the security deposit collected for issues such as non-payment of rent that you can now apply to any addition loss you are experiencing.

Some tenants will try to ‘live-out’ their security deposit by not paying for rent and just letting the security deposit pay for the non-payment.  By not collecting last month’s rent in advance, this leaves the landlord in a bind especially if the tenant owes any excess beyond the security deposit for additional non-payment or damages.  You are now looking at a day in court which every property owner tries to avoid at all costs.

 

Cons to Collecting Last Month’s Rent

Smaller Tenant Pool

First and last month’s rent plus a security deposit is a lot of money to ask for upfront, even in the well-to-do area of Elkridge.  Some tenants struggle to come up with first month’s rent and the security deposit, without last month’s rent added into the mix.  Plus, some tenants may not want to pay that amount of money all at once.  These things can lower your tenant pool.

While you may get a better quality tenant in your home by asking for last month’s rent, it may be more difficult for you to find a tenant with the proper funds, leaving your property vacant for longer than you wish.

 

Rent Increase Dilemma

Sometimes, you may want to increase the monthly rent your property management company collects on your Laurel rental property.  If your original ‘last month’s rent’ was $1000 and now you would like to charge $1200 a month, but fail to collect an additional $200 from your tenant to cover the ‘last month’s rent’ at the time you increase the rent, you will not be allowed to collect that additional amount when your tenant moves out at the end of their lease term.

This is why proper rent collection procedures by you or your property management company are essential.  Unfortunately, all of this extra money collection will probably not sit well with your current tenant either, which can strain the landlord-tenant relationship.

 

Final Thoughts

Last month’s rent is money that is paid by your tenant to live on your premises.  The security deposit is your financial protection against any unforeseen non-payment or damage.  Whether you choose to collect last month’s rent from your tenants at the start of their lease term is up to you.  Just make sure that you enlist the help of your favorite Howard County property management company, Bay Management Group, to help you draft a lease agreement that makes all of your rent collection procedures clear to avoid unnecessary confusion on both yours and your tenant’s part.

 


8 Ways to Collect Rent from Tenants

Depending on your tenants, collecting rent is either your favorite time of the month, or your worst nightmare. howard-county-property-managers-collect-rent

When you have reliable, high value tenants, your investment in rental property truly pays off, but when tenants repeatedly pay late – or not at all – it can take the joy out of owning real estate.

It is always the tenant’s responsibility to pay and to pay on time, but your method of rent collection might make the process more difficult than it needs be.

 

8 Basic Ways to Collect Rent from Maryland Tenants

Each rent collection method has its own advantages and disadvantages.

Direct Deposit

PRO: Direct deposit is a great option for collecting rent. Automatic monthly withdrawals from tenants’ accounts simplify the rent collection process, making it convenient for both you and your tenants.

We offer landlords direct deposit for rental payments as part of our property management services in Howard County, MD. It allows us to disburse payments quickly to our clients.

CON: Direct deposit has very little downside, but does require some additional set-up. Speak to your banking institution about the requirements for direct deposit and automatic debit.

 

Check/Money Order

howard-county-property-manager-collecting-rent-checksPRO: Accepting checks and money orders are traditional methods of collecting rent. Both offer physical documentation of payments. Money orders are more secure than checks, in that they cannot bounce.

CON: These two methods have some serious drawbacks. A tenant can write a check that will bounce, and money orders require more steps for renters to obtain them.

In addition, both are quickly becoming outdated. People are relying more on debit check cards than on physical checks. If you are only accepting paper checks or money orders, you might be making it more difficult for your tenants to pay rent.

 

Bank Deposit Slip

Some landlords prefer to set up separate bank accounts for each property they own. To collect rent, they require tenants to make deposits into these accounts. Tenants then provide a copy of the deposit slip as proof of payment.

PRO: Your accounts will be well documented with this method.

CON: Besides the amount of paperwork involved, this method can be just as inconvenient as requiring checks or money orders. It requires you to keep track of multiple accounts. The tenant must run to the bank whenever rent is due.

 

Cash

CON: While an option, we cannot recommend accepting cash for rent. With cash there is no record for you or your tenant to keep as proof of payment. Beware of tenants who insist on paying in cash.

 

Face to Face Pick-Up

PRO: Collecting rent by visiting your tenant personally has one great advantage: you make monthly checkups on your property. This allows you to easily assess how well your tenants are maintaining the property.

CON: If you live next door to your tenant, face to face rent pick-up may not be a hassle, but it still may not be a great idea. If you own more than one property in several locations, face to face rent pick-up can be exhaustive and time consuming.

 

Mail

PRO: Having tenants mail rent payments can be useful if you live far from your rental properties. To make it easier, some landlords provide self-addressed stamped envelopes to tenants. You can purchase these in bulk from the Postal Service to reduce the added cost.

CON: While the USPS boasts about its dependability, tenants are less reliable when it comes to mailing rent checks. They may take liberties, like waiting until the payment date to drop their check in the mail, preventing you from depositing it into your account until after it arrives days later.

 

Drop-Off

PRO: If you own an apartment community or building, providing a designated drop-off location for rent is a suitable option. It is a convenient means for both you and your tenants. Tenants can easily drop off rent in a timely manner and you don’t have to wait for the mailman to arrive to get paid.

CON: You must be diligent in checking the rent box at the same date and time every month in order to keep track of late payments.

Be sure that your drop-off location is secure, as it could become a target for theft. Rather than a rent box, we recommend using your leasing office as a drop-off location.

 

Rent Collection Software & Services

There are a number of online companies that offer rent collection services. Similar to online bill pay, tenants and landlords use these as platforms for exchanging money online.

PRO: Like direct deposit, tenants can pay rent quickly and easily through these online platforms.

CON: As with any website, there are security risks involved with online rent collection software.

While some of these companies allow tenants to also submit maintenance requests, they do not offer a full line of property management services. At Bay Management Group, we handle rent collection and repairs, so you can enjoy all the benefits of owning investment property without the worry of dealing with maintenance.

 

General Rent Collection Tips in Maryland

ways-to-collect-rent-from-howard-county-md-tenantsNo matter what your preferred method of payment might be, here are some general tips for collecting rent:

  • There are some landlords who swear by incentives. This means discounting rent if the tenant pays early or sets up automatic payments. However, it makes more sense economically to charge a late fee if the tenant fails to pay rent consistently.
  • Always enforce rent policies. Forgiving a late fee or accepting payments more than five days late can make collecting the rent even more difficult the next month. If you make an exception for a tenant once, he is more likely to be late on his rent again (and may pass the word on to his neighbors).
  • If you would rather not worry about rent collection, consider working with a property management company. Bay Management Group offers complete services, including rent collection, for property management in Howard County and throughout Maryland.