When it comes time to rent a property, especially if an owner has never had a rental, they receive a crash course in what it is to own a small business. Add into this the sentimental attachment, if it was their primary residence, and you have a tender box waiting for a match that will almost certainly start a fire at some point. This is where an excellent property manager becomes an invaluable resource to an income property owner. Not only for their expertise in the industry, but for preparing an owner for the crazy things that can happen with a rental, and its occupants.

A property manager when screening an applicant can look at their income, credit, job history, and rental history, but must qualify the prospect using a strict set of guidelines set forth by local, state, and federal laws regarding Fair Housing. So, when that 4 bedroom house you raised your children in, and thing is nearly perfect is being applied for by a multi-generational family, which includes 5 children, the criteria that will be used is indifferent to your personal feeling about 9 individuals occupying your home. This is one of the first struggles PM’s will have with a new income property owner. When you decide to make your home a rental, you decided to own a small business, one that will be required to adhere to an ever-increasing amount of laws and restrictions. Simply put, it is no longer your home, it is a business.

Next big question that I ask, can you handle that? The answer is sometimes, no. This is where a person must make the decision to either sell, leave vacant, or drop their personal attachment.

How about maintenance and repairs. Well, what you lived with or repaired yourself, many renters will not. This can be another big pill for owners to swallow. Again, you now own a small business, which will have recurring and unexpected expenses… However, a confident and competent PM will educate you early on into the process about setting aside reserves for unexpected expenses so that they are not an unmanageable blow to your pocketbook. Good practice is to set aside 10% of the rent amount for turnover, and/or large repairs, such as a water heater, flooring, or furnace.

Think about it like this. You have a unit that has received $1500 per month for 5 years. The total revenue would be $90,000. The tenant vacates the property, and beyond what can be deducted for the deposit in accordance with the provisions set forth by the CA. Dept. of Consumer Affairs, the home needs new carpet, some new plumbing fixtures, and paint. The total cost for these items is $5000. If the recommended 10%, or $9000 had been set aside, this expense would not only be covered, but the owner would have a $4000 surplus to do with what they please. Maybe a trip to Maui?

As with most things in life, knowledge, understanding, and preparation goes a long way in making the experience of owning an income property, one that is both pleasant, and profitable as possible.

In today’s market, it is quite likely that an application to rent will have competition. Below are some suggestions of how to make your application as attractive as possible.

1. The application should be submitted online if possible.
It is more convenient for a PM to receive an electronic application, as opposed to a paper copy. This accelerates the screening process, and may help you receive a decision more quickly.

2. Submit all required accompanying documents with the application.
Any missing information will likely delay the process.

3. Complete and legible applications are looked at first.
If an application cannot be submitted online, be sure all boxes are filled in with clear print. Black ink is preferred.

4. If you have had past credit issues that can be explained, submit a letter with the application.
The letter should be factual, and concise. Some personal info is ok, but try to keep it professional, and direct.

5. Follow up after the application has been submitted.
Ensure all necessary items have been received, and ask if there is anything that can be done to help the chances of approval.

Good Luck in your house hunting, and remember the old adage. The early bird gets the worm!

When submitting an application to rent a property, be sure it is fully completed. Include all required documents, and the application fee in the required form of payment. i.e. cashier check or money order.

Fields left blank, or missing documents, could result in a delay of the screening process. This may allow an application with all the necessary items to be placed in front of one that is incomplete.

References are very important. Supply names and phone numbers to people that can provide an unbiased referral. Such as a previous landlord and/or employer. Referrals from friends and family, in most cases, are not sufficient.

Including a letter of introduction, and expressing the funds are available for the deposit, is never a bad idea. It adds a human element to your application and just may be the deciding factor if two similarly qualified applications are received.

If denied, don’t be afraid to ask what caused you to lose out on the property. You may be made aware of items on your credit that you did not know existed.

Good luck, and be sure to visit our website often for current listings and other useful information.

Tenants may sometimes be reluctant to report maintenance issues due to what they perceive as being an annoyance to their property manager or landlord.

Advice for tenants: Always report maintenance issues and/or concerns to your property manager or landlord. Not reporting an issue is doing a disservice to yourself, and your reluctance may result in additional damage being done to the property, when it could’ve been more easily resolved. Any good property manager or owner wants to know about maintenance issues as soon as possible.

Advice for property managers or landlords: Create a culture with tenants in which they’re made to feel like an asset. Their reporting of maintenance issues should not only be welcomed; it should be their obligation. This should be clearly stated in their lease agreement.

Owning an income property should be a positive and profitable experience. Let us help you achieve that goal.