While each rental agreement is unique, the questions landlords ask are often similar. Here are some of the most common questions answered.
How can I get the most for my rental?
The market will determine the range of what you can charge for your rental. Prices are influenced by the type of structure (single-family house, duplex, apartment, etc.), the size, the location, and the configuration.
Within the range, you can make your property more valuable by making sure it is clean, in good repair, and functional. Do the doors close properly? Do all the burners on the stove work? Does it have a fresh coat of paint and clean carpet? All of these contribute to higher rents.
In California, we cannot raise rents more than the cost-of-living adjustment plus 5% per year (with a total increase no larger than 10%) until there’s a new tenant. And sometimes, as during COVID, the governor will declare an emergency and limit rent increases to 10% for the duration of the emergency (which can last years), regardless of tenant turnover.
How much time should I plan to prepare my property?
Preparing a unit takes more time than you might think. If things are already in good repair, then a coat of paint and a deep clean of the whole place (including carpets) will probably suffice. It is also wise to go through and address all the little issues that make the place more livable: tighten loose screws, replace burnt out lightbulbs, change HVAC filters, etc.
If the property needs bigger repairs or replacements, it can take weeks. Sometimes landlords don’t find out about leaks until tenants move out. By then, more extensive damage may have occurred—like having to replace the bathroom floor. Ordering parts for repairs or updates to appliances, electrical, or plumbing can take a while.
If you want to be able to charge tenants for any damage they may cause, before they move in you must take “before” photos, so that afterwards you can compare them to “after” photos. Documenting the condition of your property with photos and/or video takes time.
So, with all this, preparing your property could take anywhere from a couple of weeks to a couple of months.
How much time does it take to find a tenant?
Obviously, the time and money you invest in marketing your property should depend on how much you can earn from that property. Regardless, step one is to do a little research to see how much you can charge (what will the market support)? Then, determine what sets your property apart from others like it.
If you go all in on marketing, it can be great to create a website featuring photos and videos, detailed descriptions, and your contact information. You can promote the property online via sites like Facebook Marketplace and Craigslist, as well as via social media channels and paid advertisements. You can also advertise with traditional media. And, don’t forget old-school methods like “For Rent” signs on the property.
Once potential tenants show interest, it’s not as simple as accepting their deposit and handing them the keys. You’ll want to be sure the tenant is qualified, which requires a process to verify current and future income and a credit score that shows they have a track record of making payments on time.
I recommend checking with the last couple of landlords to verify the tenant’s caliber. Why more than one? Because the current landlord may be in the middle of evicting this horrible tenant, so they’ll lie through their teeth: “Gee, I hate to see this young man go. He’s so sweet.” TRANSLATION: This creep isn’t paying, he trashed place, and all the neighbors hate him. By checking with a previous landlord, you’ll find someone who has no reason to sugar-coat their experience with the tenant.
Be aware that legally you cannot and morally you should not decline a tenant solely because they are subsidized by the state via a Section 8 voucher. Penalizing someone for being poor isn’t fair. On the other hand, it’s perfectly fine to refuse to rent to someone who has a poor rental history, who doesn’t pay on time or is difficult to get along with. Sometimes it’s worth following your gut instinct. You don’t need a good reason to say no, but you cannot discriminate based on protected classes.
If you have questions about property management or real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.