I’m Going To Talk To You Today About Six Things.
Table of Contents
So what I mean by that is, you know, make sure you have insurance and insurance on a rental home is a separate policy from like homeowners insurance.
And you want to make sure you talked to your provider about that kind of coverage. If you’re going to be…if you do decide to, you know, rent your house out.
Because You Wanna Make Sure You Have A Lease Together, This One’s Not Super Important At This Point In The Process, But It’s Something That You’ll Want To Have In Mind.
Because it might not take you a long time to find a resident. So, you know, just to get that process rolling, you’ll wanna make sure you’ll have a lease ready to go and make sure you get an attorney to review it or an attorney has reviewed it.
You can find leases on…biggerpockets.com has a few that are state-specific.
And then there are other websites, I believe like nolo.com might have some.
You could probably Google it and find some. But make sure they’re reviewed by an attorney.
So like I mentioned, it might not take you long to find somebody, so you’ll want to make sure that you have your screening criteria in place so that way you’re screening everybody by the same standards and there’s not potential for you to get in trouble with, you know, like fair housing or something like that.
So make sure you’ve got your screening criteria ready to go.
So this is like the…this might sound kind of similar to what I just talked about, but this is like the physical aspect of getting your house rent-ready, so.
And there’s a common misconception that when renters are looking for rental houses, they’re not as stringent on the condition of the house, which isn’t true.
If you have somebody that is looking to buy a house, you know, they obviously want the house ready to go to live in. So do renters. It’s not that different.
Do you need any painting? Do you need any carpet replaced? Or you want to replace carpet with some vinyl plank flooring?
You know, that’s the kind of stuff you need to think about and consider before you put your house on the market because you want to put your best foot forward.
So that way, you know, hopefully, prospective residents are impressed with your house right off the bat instead of saying, oh well they have this going on, how long is it going to take to fix, that sort of thing.
Landscaping, you know all the bushes trimmed back, grass cut. You know, that sort of thing.
Curb appeal is very important for getting a house rented and for attracting people that wanna see it. So make sure you’ve got that squared away as well.
In my opinion, this is the most important thing about marketing your house is good photos.
You won’t believe the number of photos I’ve seen online, even from management companies where the photos are either blurry or dark or crooked.
If you have good photos, that’s the residents first look at the inside of the house.
So if the photos look good, your house is going to be really presentable and really attractive for people to wanna see it in person.
Then make sure you write a description. You know, in my opinion, you might hear different opinions from different folks, but in my opinion, the description is not as important as the photos, but you’d still definitely want to have a description.
So the description is just like the icing on the cake of the photos.
Next, and this is probably the most underrated aspect of marketing, especially in today’s cell phone age, is a sign in the yard.
People, you know, even with all these iPhones and Android phones out there with all the apps that you can use to find rental houses, people still drive around neighborhoods to find a rental house.
You know, people want to understand, you know, the feel and vibe of the neighborhood, you know, in the morning and during the day and at night.
So you know, while people drive around, they’re going to see signs in the yard and either call or look the house upon you know, somewhere where it’s marketing.
A sign in the yard is still very important.
And then when you’re actually marketing, market the house on Zillow, Zillow, syndicates, Trulia, HotPads. Facebook Marketplace.
Craigslist you can do, there’s a lot of scheming with Craigslist because it’s 100% free.
So just, you know, be cautious when you’re on when you’re marketing on Craigslist.
We’ve had a few of our listings in the past. You know, they get removed and then somebody, you know, takes the pictures from, even though they’re watermarked with our company name, they still take the photos and put up a listing if you know, at a rent and a price that’s significantly less than sometimes people you know, get close to getting scammed.
So you know, that’s the only thing I would caution you about for Craigslist.
So, and I talked about it earlier, make sure you have your screening criteria set
Also, you want to make sure you have a process to screen these folks.
You, get a rental application, you know, find somebody to screen them for you or, you know, set up an account with like Transunion or Cozy is a really popular choice.
If you’re you know, like a one-off landlord for right now.
With Cozy, the prospects, they pay the application fee directly to Cozy so you don’t get any of it.
They fill out the application, it comes to you and Cozy figures out if they’re approved or not.
So that’s a good option if you’re just getting started in this and how we do it is we have an account through Transunion.
Tenants pay us the application fee, we send the application to Transunion. Transunion takes a look at their credit report you know, for any derogatory marks.
And do they have any outstanding balances with previously on lowers, that sort of thing? Can they pay bills on time?
And that all affects their credit score. They send us back a recommendation.
Then, you know, we also check to make sure that they have an ability to pay, meaning they have to make three to one three times monthly rent in gross income.
So, you know, they have to be currently employed and make three times the rent.
What you want to check on somebody’s application is the credit score.
This shows the likelihood of somebody paying their bills on time. Rent is going to be a bill.
So you wanna make sure that they have a good track record of on-time payments.
You also want to check to make sure they’re employed. If they’re not employed, they can’t pay you rent.
And then also a criminal background. You want to make sure that you’re not putting somebody in there that is, you know, can be a danger to either your house or to the people around the house.
And, you don’t want somebody in there that’s going to be attracting riff-raff around the house, you know, causing other people that live around there to, you know, feel uneasy.
So I think I mentioned this earlier in the video, but you want to have a lease that’s state-specific as each, you know, laws vary state by state.
So you want to make sure that, excuse me, you wanna make sure your lease is compliant with your state’s landlord-tenant laws and all that good stuff.
A lot of people out there, you know, for some reason don’t collect security deposits.
So the security deposit is in your best interest to have in the, you know, if and when the resident moves out, if there are any damages beyond normal wear and tear, you at least have some kind of safety net.
We had a house that came vacant last year where the owner chose to not accept his security deposit.
When it came time for the resident to move out, there was like $3,000 to $4,000 worth of work to be done.
So do ever not collect a security deposit. You know, ultimately it’s up to you.
But I would always advise you to always collect at least one month’s rent worth of security deposit.
Speaking of the security deposit, you want to make sure you have some kind of escrow account set up for that because illegally, it’s the resident’s money until you know, until move out and there’s work that needs to come out of a security deposit.
So, you know, you can’t do anything with the security deposit. It’s gotta be held somewhere so that way it can be accessed later.
So have some kind of system set up to collect rent. Cozy, I believe you can use Cozy to set…you can set up Cozy to collect rent electronically.
Even if you don’t use Cozy, I would recommend accepting payments electronically.
You don’t have to fool with you know, attendance saying they’re paying late because you know, they sent something in the mail and it never gets there and then you’ve got to go back and forth about getting payment.
And you don’t have to meet the residents anywhere too, you know, physically accept the payment.
Electronic is easiest for everybody. So that’s what I would advise you to set up to do.
I also would not advise and some people do this, I would not advise you to set up direct transfers, but you know, with like your bank account information, that resident’s bank account information that can go sideways pretty quickly.
So I would have, excuse me, I would have some kind of the third party in the middle that accepts those payments that the residents can send it to that you can withdraw from. That’s it.
If you have any questions about any of this stuff, please feel free to reach out to me.
Again, my name is Alex Smith. I’m up here in Chattanooga with evernest.
You can call me, (423) 648-7368, and you can also shoot me an email if that’s easiest, [email protected]. See you.
Spencer is the VP of Marketing at Evernest. He wakes up with Google and Facebook on his mind. Having bought and sold over 150 homes in Birmingham, Spencer gets a kick out of helping new and seasoned investors navigate the mistakes he made as an investor. Spencer is also passionate about his love for Michael Jordan and does his best to explain to the Millennials (who never saw him play live) how much better he was than LeBron. He loves to hang out with his wife, kids, and the world’s best black lab, Jett.
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