Rental agreement: What is all about?

A rental agreement is a legal contract between landlord and tenant. This agreement contains various things like:

Rent – In includes the amount of rent and due date of rent. It is the responsibility of tenant to pay the complete amount of rent before or on due date. It is duty of landlord to mention the both points in rental agreement to eliminate the any kind of future dispute. This agreement also contain the clause when and how much rent landlord can increased.

Security deposit – This legal contract contains the information about the security deposit. Landlord has no right to use the amount for any personal purpose. It is a refundable amount which has to return by landlord to tenant at time of eviction.

Damage – According to landlord tenant act, both parties should involve the amount of damage in rental agreement. For example what kind of damage tenant has to pay etc.

Rental agreement plays important role for landlord and tenant because these kind of legal agreement can reduce the probability of disputes between the two parties. Here, you can include the number of people allow in rented property.

Source:http://www.landlordtenantact.co.uk/rental-agreement-what-is-all-about

Why Landlords Run Credit Checks on Potential Tenants

A popular adage says "those who do not remember the past are doomed to repeat it." A landlord that does not check a potential tenant's credit report is doomed to renting to someone they should not have. This is why landlords should run credit checks on potential tenants. Landlords can pay six figures for a property that they will rent to people. Before you turn the keys on your six figure investment over to a tenant, shouldn't you at least know something about the person who will be occupying your property?

A credit report is a snapshot of a person's financial history at the time the report is run. It provides a bevy of information that a landlord can use to determine whether or not to rent to a potential tenant. Although a credit report is not a perfect indicator of whether or not the tenant will always pay his or her rent on time, it is better than having no information on the tenant.

A credit report reflects how well or how poorly a potential tenant has maintained their financial obligations. If the tenant has a history of buying something and then having the account fall into collections, this will be reflected in the report. On the other hand if the tenant consistently pays his bills on time each and every month, this will be reflected in the report. If your potential tenant fails to pay his bills, would you want him or her living in your house? If they don't pay their VISA bill there is a high probability that they may not be paying their rent someday.

A credit report will also tell you if the potential tenant has a large number of charge-offs or collections on their report. A charge-off occurs when a company is not paid what they are owed and they give up on trying to ever collecting that money. A collection is when the company is actively trying to collect the money they are owed. If there is an abundance of collections and/or charge-offs, this tells you that the tenant has difficulty paying their bills. Why would you want someone like that occupying your property?

The last thing a credit reports shows is whether or not there are any judgments against the tenant or if they have ever filed for bankruptcy. If someone files bankruptcy it is usually because they have accumulated more debt than they can handle which forces them to file for bankruptcy. Landlords do not want to have someone who is unable to manage their finances in their property.

Credit reports are not perfect in determining whether or not an applicant will be a good tenant. Credit reports do tell you something about the financial responsibility or irresponsibility of your applicant. It is that history that you use to determine whether or not to rent to an applicant. Without knowing that history, in the future you will be doomed to being yet another collection on their credit report.


Source: http://www.articlesbase.com/

Keys to Investing in Real Estate

The recent economic downturn has affected prices of real estate properties in almost all localities in the United States. With economists predicting an upswing in the economy, now is the time for investing in real estate. If you have the money to make the down payment and sufficient borrowing capacity, you should seriously look into the option of buying either a second residential property or a commercial property – either of which can easily be rented out.

As any pro in the real estate business will tell you, the key factor that makes a property desirable is its location. By locating a property in a neighborhood that is both safe and clean, you can be sure that your real estate investing decision will pay richly. Proximity to good schools too is a factor that increases the value of a residential property. Commercial real estate, on the other hand, needs to be located in or close to the business district. It also needs to be easily accessible by both customers and employees. When you choose to become a real estate investor you have a few options before you. You need to inspect the property depending on whether you plan to hold the property for the long term or sell it within a few months. If you are a long term investor,
calculate the cost of repairs before the property can be rented out and add this to the total cost of your purchase. You can also choose to invest through a real estate group or a REIT, a real estate investment trust.

These function like mutual funds and are governed or managed by a professional. Though you need to pay fees for the manager, you have an easier time as you do not need to actively look for a property to invest in or deal with the nitty-gritty of locating a suitable tenant. This mode of investing in real estate also limits your exposure to the vagaries of this market. By choosing a good REIT and placing your funds in it, you can sit back and reap the benefits without further effort.

Though many offer estate investing advice, following such advice in real life is not easy. There are many variables that one has to consider and many contingencies that one has to plan for. For instance, if you plan to pay back the mortgage from the rent you receive, you need some reserve cash or periods when your investment lies vacant or unoccupied. By planning for such situations, you are more likely to be able to reap handsome profits from your investment. The main thing you need to keep in mind when on the look out for a good real estate investment is the location. While a run down building can be restored, the location cannot be changed. Both tenants and prospective buyers will be ready to pay a premium for a desirable location – one that is safe, clean, and near amenities such as schools, clubs, and shops.

While investing in real estate is no easy task, anybody with the willingness to work hard can succeed in this market.

Source: http://www.articlesbase.com/

Why Professional Landlords Should Use Tenant Management

Why? Well the answer is a simple one. The relationship can be mutually beneficial and surely that has to be good news for the bank balance of the professional landlord? Having said that, there are still professional landlords and property landlords who do not see this and, come hell or high water, they will not use tenant management software. There may be a number of reasons for this reluctance; property managers can be protective of their property portfolios and business reluctant to hand over some control to another business and in the current economic climate all businesses want to keep functions in house where they can control and save costs.

So, what are these reluctant and hesitant property managers missing out on? What can property letting agencies offer the professional landlord?

Letting agencies find suitable tenants for the professional landlord. It sounds obvious and it sounds simple but it can be a daunting, time consuming and resource hungry task. There is also a lot of regulation surrounding tenancies, contract and property law can be a minefield. Good letting agencies are experts in these areas, it's what they do. Most professional landlords employ specialist to manage tax liabilities and carry out complex building and maintenance work why is this aspect of business any different? After all it is finding the right tenant for the right property that should secure the long term benefit of a good and regular rental income.

So, how should it work? First the commercial landlord needs to meet the letting agent in order to view the property and to discuss and determine where it fits in the rental market and what an appropriate rental income for it is. There is often no charge for this initial service and rental income assessment. Once an appropriate rental income has been agreed then the letting agent will advertise the property. You should discuss with the letting agent what the advertising options are and what is best for the property and the area. Letting agencies these days can advertise properties in their shop windows, in the press, in trade magazines and on-line.

Once the advertising has generated interest then the letting agent will show the property to the prospective tenants. Remember they are your agent and as such are acting on your behalf and under your instructions. You should be very clear about what you are prepared to negotiate in terms of rental income and lease provisions. The agent has a legal duty to act within the terms and scope of the authority that they have been given by you and if necessary they must refer any counter offers or other areas of negotiation back to you for further instruction. The law of agency affords the professional landlord some protection in this regard but you should be very clear and specific in your instructions to an agent.

Once the negotiations have been completed and agreement has been reached, the letting agent will draft and produce the paperwork, the tenancy agreement. Do make sure that you read and understand everything in it and if you have doubts, especially at the beginning of a professional relationship with an agent, then have it looked at by a lawyer specialising in commercial property. By building a professional relationship with a good letting agent you can get on with what you do best, acquiring and managing good property, confident in the knowledge that the right tenants are in them paying you a regular and good commercial rent.


Article Source: http://ezinearticles.com

Need to Conduct a Tenant Background Check? Here is How to Do it From Home

Are you looking for how or where to conduct a tenant background check? In as much as an empty apartment is a goldmine not being put in use, no landlord would like to have a renowned armed robber as a tenant in his or her house also no landlord will like to rent out a house to someone that has a history of not being able to come up with the rental fees as and at when due. The only way to get the details that can prove if a person is a credible tenant or not is to run tenant backgrounds check.

A good tenant background check result will include the employment status, credit ratings, names of former landlords and payment records of the tenants. The employment status will help the landlord know the kind of job a prospective tenants is doing, this will go a long way in determining if the person will continue making payments on the property without much fuss. The credit reports will help the landlord in verifying the tenant's credit history. A credit report will also let you in on all cases of convictions and evictions that the tenant must have gone through in the past.

There are things you have to do your self when it comes to the tenant background checks. Ensuring that the tenant application forms are filled out with the best details is a very nice starting point. The details to watch out for are firstly, name of the prospective tenant's last landlord, the applicant's social security number and also their driver's license number.

With this information you can head to any of the background checking services out there. You have to make sure the service is a reliable one so as to get optimal results. You can get these background checking services both online and offline. The online companies will do all the work for you and submit a report on time. The offline option is to go to apartment service providers and for a nominal fee they will do all the work for you.

To conduct a search, you will need the full name and the city and state of the said tenant in order to conduct a tenant background check via a public records lookup directory.

These directories are not free to use but the very best among them are able to provide you the information you need for a very small amount of money and you can be sure of the accuracy of the information provided for you.


Article Source: http://ezinearticles.com

7 Ways to Identify "Tenants From Hell" and Avoid Financial Disaster

Having the skill to recognize a problem tenant before renting to them is perhaps one of the most important a property manager will ever develop. Tenants do not all of a sudden become "tenants from hell". There is a pattern of behavior over their entire adult life that will show up when conducting a thorough background check. A good property management company should be able to identify the signs of a potential "dead-beat tenant" and disqualify their application.

1) The applicant has little or no credit history. If the applicant is young than most likely they just have not established any credit of their own yet. But there are other instances when this means the applicant is using a false social security number. Often times it will be the social security of an elder person who does not check their credit history. Our Tampa Property Management company has even seen applicants use the social security number of a deceased person in an attempt to cover up their own bad history.

2) Verify the Employer information. Applicants who have recently lost their job will often have a friend or family member pretend to be their supervisor. I require our property managers to find and call the main phone number of the business and ask to be patched through to the supervisor or HR Dept. Most legitimate companies will require you to fax in the application before releasing personal information on their employee. We also require two recent pay stubs. If you do these two steps, you will find the tenants who are attempting to lie to you very quickly.

3) Question the Landlord. If the previous address was managed by an individual versus a verifiable property management company, pay close attention to their answers when speaking with them. Similar to their employment history, applicants will put the phone number of a friend or family member as their current landlord so that you don't find out they just skipped out on a month's rent and trashed the unit. The person posing as their Landlord will often pause and use "umm" and "uhh" when trying to come up with an appropriate answer to your questions. They do not know how to answer them in a professional manner. Ask detailed questions and if you feel uneasy you can ask for a copy of the Lease or the rental verification to be sent on Letterhead.

4) The address listed on the application for previous address does not match the address reported on the credit report. Credit reports will show previous addresses reported by the tenant when applying for credit. If the tenant's application says they lived at Tranquility Lakes from 99-2009 but the credit report shows they lived at a different address from 2007-2009, do the research on the address listed on their report so that you can receive the most accurate rental history. You should require landlord information for their two most recent addresses. If those addresses do not appear on their credit report, you should be concerned that the tenant is lying. This is not always the case, but it is better to be safe than sorry.

5) The credit report shows a balance due to a Utility Company. If you ask the prospective tenant, they will usually pretend to be surprised. Owing money to a Utility company is a major red flag. In our experience, 90% of tenants with this kind of history turn out to be serious problems. Do not approve anyone with this issue on their credit report.

6) Immediate Move Ins. It is hard to resist someone with some cash in hand that wants to rent the unit you have had vacant for 15 days, but often times the people looking to move in the same day are hurrying to get in because they have just skipped on their current lease or are hoping to get in before something very negative hits their credit history. Be very thorough and ask a lot of questions.

7) The tenant has no rental history. You will encounter younger people on a regular basis with no previous rental history. I realize that some of them will be decent tenants; however, it is not worth the risk. They should only be approved with a qualified co-signer.

If you keep these 7 items in mind when qualifying your prospective tenants, your property management company will save a ton of money and aggravation by avoiding the dreaded "nightmare" tenants.


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A Landlords Insurance Holders Guide to Keeping Good Tenants

The most important asset in a landlords insurance holders portfolio is not their property, but the tenants living in that property. Finding the best tenants and keeping a hold of them once you have them is the main struggle landlords face. Following this guide should make such worries a thing of the past.

For most landlords insurance policy holders, the worst thing that can happen is for their property to become vacant. Empty properties are not only a massive risk for the landlord, they also cost more to insure, and to make matters worse, they don't bring in any revenue. While some vacant periods are unavoidable, many are not, and by improving relations with their tenants, many landlords could save themselves a lot of hassle as well as some money on their insurance premiums. The following four steps should help landlords to both find good tenants and hold onto them as well!

The first step to having a good relationship with your tenants is making sure you've picked them out wisely, you could be the greatest landlord the world has ever seen but if your tenants are bad, you will suffer for it. A good tenant referencing agency and a legal expenses and rent guarantee insurance policy can help bring to light any potential problems before they become actual problems as well as giving you a safety net just in case the worst does happen.

While nice guys may finish last, there is no denying that your relationship with your tenants will be greatly improved if you treat them kindly. No one likes being treated as an inferior, especially when they have to pay the other person every month! Treat your tenants badly and they will eventually leave, leaving you out of pocket. In addition to leaving, tenants who are treated badly are more likely to treat your property with the same amount of respect you treat them, getting over a bruised ego costs nothing, repairing the damage caused by tenants can be very pricey indeed.

Conversely however, your relationship with your tenants is likely to be better if you don't let them walk all over you. Fair but firm is the motto to go by, remember, you are your tenants friendly landlord, not your tenants friend. At the end of the day both parties have obligations to one another that come above any friendships. Another relevant saying is "give them an inch and they'll take a mile" or allow them to pay late once and that will quickly become the norm.

The final tip for keeping a good relationship between you and your tenants is to keep your property in great condition. If you make your property somewhere you would want to live, your tenants are likely to want to stay there too. This can have a knock on effect, increasing the overall value of your property and encouraging further good tenants to want to move in if the situation arises.

Do unto others as you would have them do unto you, wise words for any situation but particularly apt with regards to the relationship between landlords and tenants. Follow these tips and your landlords insurance policy should be nothing more than a safety net if the unimaginable happens, rather than a clean-up policy for unwanted tenants.


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