The ancient sage Confucius is famed for noting that someone “Who does not think and plan long ahead will find trouble right at their door.” Planning ahead when it comes to your DC rental home can prevent trouble from finding the doorstep of your investment property!
Thankfully, as your guide to DC property management, there are a few tips and tricks that we can share to provide some insight—and foresight—to avoid looking back in regretful hindsight!
Just a quick note: This blog is not intended as legal counsel. If you need real-time assistance, reach out to the property management professionals at Renters Warehouse DC/NOVA or a trusted attorney.
Don’t Be Your Tenant’s Friend
The line between people in a business relationship needs to be thick and obvious. There’s nothing wrong with being friendly with your tenants, but this doesn’t mean you should try to be their friends.
What’s the difference between being friendly and being your tenant’s actual friend? In a word: intimacy. If you find that your tenant is sharing personal details about their life, you may have crossed the line into an intimate or friendly relationship. By the same token, if you find yourself over-sharing with your tenants, you may also be giving them the impression that you’re trying to cultivate a friendship—even if you’re just trying to find common ground or something to talk about.
The problem with crossing these lines is that intimate relationships come with expectations—and most of these aren’t congruent with a business dynamic. For example, when you share a friendly bond with someone:
- They may expect you to be lax when it comes to collecting timely rental payments
- They may also feel you can do them “favors,” such as giving them preferential treatment when it comes to parking
- Suddenly, they might start to expect to be a priority beyond the relationship they have with you as a renter.
These expectations may result in added stress—and even the loss of income! It’s best to define the relationship early using your lease so that there’s no confusion. Plus, you can use your lease as a reminder—especially if you see your business relationships starting to drift towards the friend zone.
That said, your lease agreement can only protect you and your DC rental property if you carefully craft one from scratch.
Don’t Use an Online Lease
If you aren’t going to hire a professional DC property management company, you should hire a lawyer to help you craft a protective and clear-cut lease. This is one of the most important things you can do! Here are some reasons why:
- A lease is a legally binding agreement. If the language in the lease isn’t crafted with your interests as a landlord in mind, you could be exposed to sticky legal issues.
- The laws concerning rental properties are different depending on the area. While you may think you have a grasp on DC rental law, only an experienced attorney or a capable property manager knows the ins and outs.
- A well-crafted lease agreement can better represent your interests! When a DC property management company or a lawyer write your lease agreement, language can be included that helps protect you or your investment.
Price Your Rental Price Correctly
Pricing your rental—while appearing simple at the outset—can be a lot like walking a tightrope. A little too far in one direction or the other, and you’re in trouble! If you set the rental rate too high, you may price out some good tenants. On the flip side, if you price the rental too low, you run the risk of losing potential revenue. Being an effective landlord requires you to set the right rental rate according to a balance between what you need to make and what the market will tolerate.
- Finding your bullseye price is done by performing pricing comps as well as looking at DC rental rates, histories in the area, and similar neighborhoods.
- You will want to price your rental close to the average price of comparable properties in the area.
- If this isn’t enough for you to recoup your costs and realize a profit, you may want to consider performing upgrades that can help you get a little more each month.
- Keep in mind that if you underprice your rentals, you are losing money that could be reinvested back into your properties or in acquiring more rentals for your portfolio.
If you need help finding your bullseye price, partnering with a skilled DC property management company like Renters Warehouse DC/NOVA can be a fantastic option. We happen to offer this kind of in-depth research from our Professional Landlords to you absolutely free!
Thoroughly Screen Your Tenants
While it’s impossible to perfectly screen every single potential tenant, you can eliminate some of the risk by using a few well-chosen questions and inquiries. For example, you can ask about the following:
- Their rental history: Include how long they’ve stayed at the last few places they’ve lived.
- Their payment history: Tenants who habitually pay on time are more likely to continue doing so.
- A credit report: Rent is a form of debt, and the way a tenant handles debt may carry into how they manage taking care of their obligations as a renter.
If you choose not to work with a skilled property manager for this one, it’s crucial that you select an FCRA-compliant screening service to help you carry out an inquiry into an applicant’s credit and history. This protects you as the landlord!
If you’re determined to screen your tenants on your own, a great place to get started with coming up with ideas for the screening process is with your own copy of our FREE Tenant Screening Checklist! Our checklist provides insight for landlords in this very tricky area of resident placement.