Rental Property Checklist

Many cities have friendly neighborhoods with great properties. However, it’s important to know what to look for in a rental listing, so you can make a smart assessment about each rental listing you’re interested in.

Use this rental property viewing checklist to stay organized and prepared when viewing properties.

  1. What is the cost of rent?
    Clarify the asking price to guarantee you don’t overpay. If the landlord states a higher rent price than listed, highlight the inconsistency to be sure you get the lower advertised price.
  2. Is there an application process or screening criteria?
    Ask the landlord to explain their application and screening processes, and ask about application fees. A thorough screening process shows the landlord is careful about finding good renters.
  3. What payment methods are accepted for rent?
    Landlords can choose which forms of payment they will accept. However, some landlords make it easy for tenants and allow tenants to pay rent online . The option of online payment allows for automation, security, and convenience for both tenant and landlord.
  4. What is the procedure for submitting a maintenance request? Who makes the repairs?
    You want to be sure the landlord appropriately manages the property and responds quickly to repair requests. Clarify the maintenance procedure and confirm there is a plan in place for repairs. When viewing a property, inspect the current condition because it will offer clues to the upkeep routines of the landlord.
  5. Are furnishings and appliances included?
    It is common for renters to provide their own appliances and furnishings. However, this is not always the case. If the unit is furnished, be sure to ask exactly what is included in the contract so there are no surprises when you move in.
  6. Is there any water damage or mold related issues to disclose?
    Asking this question and having proper documentation of the answer can save you down the line if problems should occur.  Landlords are bound by law to provide a home with a healthy environment for their tenants.  No home should have ongoing water damage issues and/or mold growth at any time during your lease.
  7. Does it fit the budget?
    Be realistic about expenses. Confirm the property fits your budget so you are able to pay bills on time, build savings and still have money for entertainment and travel.

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Properly Vetting Tenants

Most investors are all too familiar with the horror stories of what can go wrong when you have the misfortune to land a problem tenant. But the best way to avoid such nightmares – and thus maximize the returns on your investment – is to try and select a good tenant in the first place. Whether or not you decide to leave the tenant selection process in the hands of a property manager, it is sensible to have a solid set of vetting criteria in place.

When it comes to vetting potential tenants, landlords should:

  1. Require them to fill out a detailed application form.
  2. Get both professional and personal references and thoroughly verify them.
  3. Request at least three months bank statements.
  4. Use a credit referencing service.
  5. Get extra information – eg: a utility bill in the tenant’s name.
  6. Ask them to show evidence of assets.
  7. Speak to their current real estate agency and, if possible, some previous landlords to establish their rental history.
  8. Call their current employer and, if possible, a past employer to establish their employment record.
  9. Ask for a copy of their passport and/or driver’s license.
  10. Secure a guarantor – eg: a parent.
  11. Check tenancy databases to see if they have been listed as a bad tenant.
  12. Always meet them in person to assess them and get a feel of who they are.

Essentially, you should be looking for a tenant who is in stable employment and has a regular income; has a solid rental history; and who is reliable, diligent, responsible and house-proud. Finally, it is also a good idea not to rush into a decision too quickly… An extra week or two of rent might pale in significance compared to a bad tenant decision made in a hurry.

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HOA Insurance & It’s Limitations

If you ask most people who’ve owned or own a condo that had a water loss caused by a roof leak, stucco issue, leak from a unit above or any other type of damage not related to plumbing what it’s like to deal with their insurance and the condo board, you may unanimously hear about a back and forth nightmare lasting months to years. Homeowner Associations, HOAs, get hazard and liability insurance for certain areas of condominium projects. However, home owners must understand what HOA insurance covers and what it does not protect. Usually, HOA insurance covers common areas and, often, the exterior elements, such as roofs, of condo units. HOA insurance seldom protects interior components of units, such as walls, any household goods or personal property from certain and sometimes all water damage and resulting mold growth from that initial damage. Should the complex have amenities, such as a pool and clubhouse, HOA insurance typically covers these features.

Depending on the type of condominium project, common areas can be vast or quite small. For example, high-rise condo buildings often have limited common areas, such as lobbies. Conversely, townhouse condominiums may have bike trails, pools, tennis courts, parks and open land. Most HOA insurance policies cover liability issues for home owners should losses occur in the common areas.

HOA insurance does not cover the interior of condominium units. Home owners must get condo insurance that protects interior components, such as walls, floors and ceilings of their units, along with personal property. HOA insurance typically protects home owners for liability or hazard losses in common areas, but not any personal injuries, negligence or hazard losses inside condominium units. Should the condo project, or building, suffer hazard losses, HOA insurance does not cover damage to the interior of condo units. Home owners must examine their HOA master insurance policy before buying their personal coverage. Never assume that HOA insurance protects all issues outside of your unit and common areas. The HOA can purchase coverage that it believes sufficient, but not necessarily cover some important hazards. Get a copy of your HOA master insurance policy and read it. If necessary, have your insurance adviser translate confusing language. Then purchase home owner insurance that covers perils that the HOA master policy does not such as water losses within the unit and a rider for mold damage caused by the initial water loss since mold removal isn’t covered as a stand alone on any policy.

The type of coverage your HOA buys is as important as the scope of the protection. Common area coverage is critical to the value of your own unit, as your resale price will be affected by the condition of lobbies, open space, pools and other amenities. Actual cash value is the least expensive coverage, as payments are based on replacement cost less depreciation and possible excessive usage. Replacement cost is better, but may be subject to stated maximum dollar amounts. Guaranteed replacement cost is the best coverage, with no maximum limits and will restore damaged areas to former conditions.

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