Avoiding potential real estate problems
Avoiding Tenet Problems
Tenant problems are the main reason given for not investing in rent houses. Most tenant problems are avoidable if you rent only to good tenants. Get a copy of the tenant and landlord rights laws or regulation for your state. Check with any large city's apartment owners association for any help they can provide.
Every time I had a bad tenant it was my fault for taking short cuts during the selection process.
Application:
Require that a tenant fill out an application, and check all the information out before you agree to rent to them. If the person lies, do not rent to them. Check all their references, especially the last landlord. If they have no history, get a cosigner on the lease.
Look on line for a company to run potential tenets back ground checks and credit checks for you. Charge a application fee to cover the cost.
Run A Credit Check:
Check their credit report, If they have a history of late payments you will be paid late too, if at all.
Run a police report:
If there is any question in your mind.
Get A Deposit:
Security deposits are a must. If they can not afford the rent and deposit now, how will they afford it later.
Require a Written lease:
Terms of six months or a year. Explain everything to the tenants, and get all persons over seventeen years old who will be living there to sign. Go over every clause in your lease, and have each page initialed.
Late fee:
Charge a late fee, and be strict on payment before the due date.
Pet Clauses and Deposits:
Require an additional deposit from tenants with pets.
A very high pet deposit, $500 is probably to low, and that is per pet.
Parking:
Cover parking in the lease to avoid misunderstanding later. If you do not you may find your lawn is a drive way.
Listing Notes:
Real Estate Sales Commissions Are Negotiable .
Ask for a lower commission rate if the agent is asking you to lower your selling price, or is asking you to pay points to a bank on behalf of the buyer. Just keep in mind that all parties to a real estate deal are making money, or hope to, and everything is negotiable, including the sales commission. Some agents will take a note for their commission or part of it. They do not like it, but once in a while it can help close a money gap and save a deal. This works best with independent agents who are both the listing and selling broker.
If the sales price is over $300,000 you should pay less than the so-called standard 6% commission - 4% to 4.5% is plenty.
If you are in a sellers market and you want to get top dollar for your home, try a commission plan designed to give the agents an incentive to sell at a higher price.
Lets say your agent wants to list your home for $350,000 and they think it will bring between $320,000 and $350,000. Consider setting the commission at 4% of the first $300,000, and 15% of any amount over the $300,000. If the home sells for $320,000, you pay commission of $15,000. If it sells for $350,000, you pay commission of $19,500. The difference is, that you would net more money from the sale plus the agent will be motivated to get the higher sales price.
Do not pay any extra fees to the agency listing your property for sale. The sales commission is more the adequate.
Keep your listings to three months at a time. Six months is entirely to long for residential properties and long listings encourage real estate agents to procrastinate.
Most listing contracts have a clause that states you must pay a commission to the agent if a buyer the agent brings around buys the home after a listing expires. Be very certain that you insert a clause which states that this pay later clause does not apply if you have the home listed for sale with any other agency. You do not need to find out later you owe two commissions.