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There are a variety of benefits that come with owning rental properties.
There are tax benefits to be enjoyed in the form of tax relief for expenses incurred in owning and maintaining rental property. Expenses including the management fee to an Annapolis property management company are tax-deductible. Additionally, income made from rent is taxed differently from employment income.
Rental property also provides a safety net or safety cushion to land on in case anything happens. Should an owner lose their job or business and no longer have that source of income, income drawn from property they are renting out can keep them going.
Just like any type of property you purchase, rental properties appreciate over time. This is both in its own value which can be enhanced with improvements and remodelling as well as in the value of the income it brings in. Rent prices typically climb up rather than down over time.
Owning rental property benefits immediate family members. Rental property can be bequeathed to a spouse, children or other chosen beneficiary as a ready source of income. In case any misfortune strikes, those left behind will have a source of income that they can rely on. They will also have the option of selling the property if that becomes necessary.
In order to reap the benefits of owning rental properties, you need to learn how to effectively manage one. There are a variety of strategies that you can use to help you do just that.
It is important that rental property owners understand that homeowners insurance will not cover property that is not occupied by its owner, which is why you need landlord insurance. Generally speaking, renters are not liable for the malfunctioning of a large appliance, when an injury is suffered on the property, when there's a fire or when a place is burglarized. Without coverage, such incidents and natural disasters can leave an owner looking at a hefty repair and/or restoration bill. This is what makes landlord's insurance necessary.
The policies vary from one insurance company to another so it is important to do some homework and buy a policy that covers the risks you face as an owner at the most competitive rates. Broadly speaking, a good, comprehensive policy will cover three important areas:
Sometimes, a renter may bring in one or more people to live with them and not disclose it to the property owner. When it is confirmed that the others are living there and not just visiting, a property owner could opt to ask them to have the additional renters listed, perhaps with a rise in rent payable. If there have been complaints about them or the authorized renter is uncooperative, an owner may be forced to start eviction proceedings. Dealing with the situation can become confrontational and unpleasant.
If an Annapolis property management company is handling renters and everything pertaining to a rental property, they would handle the situation while keeping the owner out of it.
Like other businesses, property management businesses can take different entities. They can be sole proprietorships, partnerships, limited liability companies or corporations. When you begin purchasing and managing rental properties, you’ll need to choose the right business entity to register under to protect your finances and that of your business.
As an owner, the goal is to protect your rental property investment so that it remains a viable investment that never stops turning it into income. One way to do that is to entrust it to an Annapolis property management company. They will handle everything and they will do it within the confines of the law.
They will draw up lease agreements that protect the interests of the owner, handle repair requests from renters with speed, ensure periodic servicing of appliances and maintenance is done and handle mid-lease inspections. They will also ensure that rent is paid on time and that a breach of the agreement such as failing to pay rent on time or at all is handled. If it becomes necessary to evict a client, they will also handle it. It is the best way to protect rental property.
From prepping your properties for rent to managing renters, there are a variety of tasks that an Annapolis property manager will help owners handle. Keep reading to learn some of the biggest jobs that fall on your Rent Estate™ Advisors.
Maintaining a rental property is in the best interests of an owner to protect it and also for the sake of keeping renters happy and comfortable. An owner with several units or condos or single-family homes that are far from their location may find it hard to keep up with repairs and maintenance. That’s what makes budgeting for routine maintenance and emergencies a must.
An Annapolis property management company can help. Alongside handling any necessary repairs, they will also ensure maintenance is done on a schedule. A big part of this is vetting vendors and working only with those who provide high-quality products and services at the most competitive rates and with long-term guarantees and warranties.
In the event that a renter vacates a unit without notice and leaves their belongings behind, your Annapolis property management company will step in. With the reason for this action unknown, an owner is obligated to keep the belongings in good condition. There is an obligation to notify the missing renter’'s next of kin if they continue to be unreachable. The next of kin can then lead the effort to find the missing resident such as by informing the authorities. Depending on the findings of an investigation, the next of kin can take possession of the lost belongings. The unit can then be free to rent. Getting rid of a missing renter's belongings without following due procedure can leave an owner facing legal charges.
Both renters and property owners have rights that are recognized by law. As the party that draws up a lease or rental agreement, an owner has to be fair in recognizing the rights of renters while protecting their interests. This is done by including clauses that allow them to access the property to conduct move-out and mid-lease inspections and to take legal action if the agreement is breached. This could be retaining a security deposit to cover damages, having a renter list additional residents and perhaps pay more in rent or move out and the right to evict a renter for non-payment of rent or gross misconduct such as criminal or disturbing activities. Again, an Annapolis property management company will ably handle the drafting of a lease or rental agreement.
A renter can cause damage accidentally or intentionally. If the damage was accidental, they admit their liability and agree to have the cost of repair deducted from their security deposit and to top it up if they wish to continue living there. If the damage was intentional, the landlord's insurance would cover the cost of repair but it may be necessary to file a lawsuit and start eviction procedures.
Renter should take care of the house they live in and leave it in good condition when the lease lapses. In reality, renters can be careless and neglect to take care of their house. Inspections allow an owner or their agent to catch small problems before they become large ones that cost a lot to fix. This is one way to protect rental property. Random drive-by inspections are also helpful but they should not be done to the point that a renter feels violated or that their privacy is being violated.
In an effort to attract and retain renters, it is well worth it to keep upgrading rental houses. Adding a hardwood or laminate floor, charging ports, high-speed Wi-Fi, enhancing security such as with electronic keys, better kitchen and bathroom countertops, better appliances and other improvements will work to attract new renters and keep them happy. This can be done when a unit is vacated and before the new renter comes in.
The wrong upgrades, such as those that are too high-end for the market a rental is in, can wind up costing property owners more than they can recoup by raising the rent.
When a renter breaches the rental agreement, a property investor has no choice but to enforce it. They may do this by giving the renter a warning letter and a deadline to rectify the situation such as adding added renters on a lease or having them leave. If this fails, they can start the eviction process and pursue legal recourse such as for damage that is caused intentionally.
As is the case with other businesses, owners have to make an effort to keep the renters happy. This can be done by having repairs done as soon as they are requested, ensuring servicing and maintenance are done on schedule and being flexible such as in a situation where they are late with rent with a genuine reason whereas they have always been on time. Treating them with respect and consideration is also important.
