Being a landlord isn’t glorious, but it can pay off if you do it right. If you’ve got investment property in Georgetown, Texas, here are 7 ways to make it profitable.
- Be cautious when tenants want to pay rent upfront
Sometimes tenants will offer to pay multiple months’ rent upfront or even an entire year. Be cautious about this type of offer – your tenant might be up to no good.
Be cautious, but don’t jump to conclusions. There could be a reasonable, acceptable reason a tenant offers to pay upfront rent. For instance, they might be legitimately wealthy and in the habit of paying long-term bills upfront in lump sums. Or, they might want to prove their reliability in the absence of a qualifying credit score.
However, there are nefarious reasons for paying rent upfront for long periods of time that you should consider. For example, a tenant might:
- Have plans to rent the property to Airbnb guests and want limited interactions with you
- Not want you around so they don’t get caught selling drugs
- Have inherited money they’re afraid to spend frivolously. If this is your tenant’s situation, they may not be able to afford the rent going forward.
- Conduct an in-person screening interview
The tenant screening process can include more than just checking credit scores and running background checks. You can personally screen your tenants by paying close attention to the details of your interactions when they submit their application.
Always require prospective tenants to drop off applications in person and conduct a short interview. They may not be prepared for the interview and that’s perfect. Don’t tell them you’re going to chat with them when they turn in their application. You don’t want to give prospects time to prepare with stories and stock answers to standard interview questions. You want to catch them a little off guard.
Tips for conducting a screening interview
During the screening interview, ask them how many animals they have rather than asking if they have any animals. Asking how many animals they have tells them you know they have animals. If they don’t have any, they’ll let you know.
When you’re done talking, walk them to their car and take a look inside. If their car is filled with garbage and clutter, they’ll probably live the same way in your rental property.
- Watermark all listing photos
Watermarking all of your listing photos is crucial to prevent your listing from being stolen by scammers. Every photo you post online should be watermarked with your name or company and contact information. What’s the big deal if someone steals your listing? Wouldn’t they get in trouble and not you?
The problem with rental scams is that the scammers use legitimate listing photos to create their own listing with their contact information. Often, they tell prospective tenants they’re out of the country and can’t provide the keys right away. They’ll ask for a deposit sent via a money transfer service with the promise of keys being sent in the mail.
Some scammers will go as far as convincing the unsuspecting tenant to hire a locksmith to change the locks at the property. Then the tenant moves into the property you’re trying to rent. When that happens, you’ll have a big problem. If the tenant won’t leave even after discovering they’ve been scammed, you’ll need to go through a formal eviction process to get them out.
By watermarking all of your photos, scammers will skip your listings because it’s time-consuming and sometimes impossible to edit out watermarks.
- Don’t publish the exact address of your rental properties
When you publish the address to your rental properties, your listing becomes a target for scammers, but you’re also putting your current tenant’s privacy in jeopardy. The last thing a tenant wants is to have a bunch of people drive by to look at their house or to park on the street and try to look in the windows. The neighbors also won’t appreciate an extra spike in traffic.
Publish the nearest cross streets rather than the exact address. Cross streets will give people a good idea of where the rental property is located without revealing the exact house.
- Hire a lawyer to help draft your lease
Never use a lease template downloaded from the internet. The boilerplate approach to legal documents is always a bad idea.
Your lease needs to be customized with addendums specific to your property and your preferences. For example, if you don’t want to allow smoking, then put that prohibition in your lease. Your lease also shouldn’t contain clauses that violate state or federal landlord-tenant laws. Only a lawyer can help you draft that kind of document.
- Read your lease to your tenant
It’s tempting to hand your tenant a copy of the lease, summarize the contents, sign the last page, and call it a day. However, that’s a bad idea. Don’t give your tenants any reason to claim ignorance of the rules they’re expected to follow.
When your tenant signs the lease, read them every paragraph line-by-line. Rather than have your tenant initial each page, have them initial each paragraph after you read it to them. That way, if they ever take you to court claiming ignorance of the rules, you can tell the judge you not only read them the lease, but they initialed each paragraph as you read it to them.
- Put everything in writing
Every important communication you make to your tenants needs to be in writing. It’s okay to make a phone call or send a text message or email in order to facilitate fast communication, however, always create a paper trail.
In Texas, text messages don’t count as a legal form of notification. That means you can’t text a tenant 24 hours in advance to let them know you need to enter the property. If you don’t give your tenant a proper paper notice, texting a tenant is the equivalent of not giving them any notice at all.
In Georgetown, Texas, text messages, emails, and voice mails are not acceptable ways to send notice of an eviction. If you’re evicting a tenant, be sure to send your eviction notice by certified mail in addition to posting a printed notice on the tenant’s door. Not following state law can cause you to lose your eviction case.
Green Residential can help make your rental properties profitable
Turning your Georgetown rental properties into profitable sources of income takes hard work and dedication. At Green Residential, we provide landlords with all the services required to turn a profit. From tenant screening, marketing, rent collection, and handling repairs, our experienced team can do it all.