1. set the correct lease canon
- Income properties, your main income is Canyon lease therefore make sure you estimate and establish a fair and attractive market price so that you can rent the property immediately.
- It takes into account the recent comparable market, that will give you the real value of income from your property.
- Give more weight to properties that are managed to rent and not which are still available. If in your market you do not have access to this information, it is recommended to seek advice from an expert runner.
- Want to rent $100 above market can make the unit pass months without rent, which in the long run causes major financial losses.
2.-income market does not have a direct relationship to purchase market
- It is very common to hear of customers that we raise incomes because the condominium (expense/Administration) have risen because repairs have been made or simply because the value of buying and selling properties has risen. However, the prices paid by the tenants do not have a direct relationship with the expenses of the owner, these prices correspond to a well-specific income in a city, community, sub-community or building market.
3. consider renewing contracts
- While it is true that there are several elements to consider when it comes to renew the contract with a tenant, from the financial point of view, renew tends to be the best decision, with the renewal would be avoiding costs such as:
- Improvements to the property to put back on the market (painting, cleaning carpets, etc.)
- Time to get a tenant, precalificarlo, negotiate contract and implementation phase of association often translate into weeks or months without generating revenue
- Commissions may be higher in a first contract to renovations
4.-If the tenant is good, trying to keep it
- One of the most delicate elements of income properties is the relationship with the tenant. If the person pays on time, well hold the property, does not bother constantly for minor repairs, you do not receive complaints of neighbors or of the Association, is an excellent candidate to renew and keep him happy.
- It is very common as owner to insist on increasing income and be willing to leave "good tenants" by not reaching an agreement on the increase, however, before leaving a good tenant always thinks that a lottery is who will be your next tenant.
5.-evaluate the tenant
Some aspects to consider:
- Proof of income: request support which demonstrate that they will cover payments of property, such as:
- Last receipts of payroll or income (w2 or 1099)
- Latest tax returns
- State Bank accounts.
- Credit report:
- Request a credit report for the history of how you've paid your bills, in United States you can use as a reference:
- less than 579 (bad) in the lowest 20% of the nation
- 580-669 (just) below the average of the nation
- 670 to 739 (good) average of the nation
- 740 to 799 (very good) in the top 40% of the nation
- 800 or more (exceptional) in the highest 20% of the nation
- Is worth noting that if the person is foreign with no social security number, will not have credit report
- It is matter in the report to determine if you have had any type of eviction
- Police report: provides peace of mind knowing that this person has no previous police history. It is a process very easy and quick to obtain.
- References from former owners where the person has lived: can be a letter, or put information in the form of application indicate where the phone so we can call and ask for references. Although they are calling references give us important feedback,
- Also remember that if your property is in a condo which needs approval before your tenant to move, the person will through this filter which will give you double protection. However this we must apply for all of the above for our security and for our investment.