When you undertake a new enterprise, you can expect to experience some type of learning curve, no matter how much research and preparation you’ve done ahead of time. Being a first-time landlord is no exception.
If you intend to become a landlord in Seattle, there are certain lessons that can only be taught through experience and the process of trial and error. However, that doesn’t mean you should go into renting properties blindly. With adequate preliminary research, you can shorten the learning curve, be better prepared to handle issues that arise, and avoid the common pitfalls encountered by property managers and individuals who rent out apartments and single-family homes.
How Can I Improve My Property Management?
Being a landlord is a big job, filled with a myriad of day-to-day and long-term responsibilities that are critical to making the most of your investment properties. Without proper management of your rental homes or apartment units, you will have a difficult time maximizing your return on investment (ROI) and ensuring your real estate is kept in top condition. Additionally, your landlord venture can quickly become more of a hassle than it’s worth. To help you get started, here are a few important property management tips designed for newcomers to the rental industry in the South Puget Sound area:
1. Become Familiar with Fair Housing Laws
You will do yourself a big favor as a landlord by familiarizing yourself with federal, state and local Fair Housing Laws, which prohibit discrimination against protected classes. Research the applicable Washington laws that pertain to the business of renting properties in Seattle. You can further enhance your knowledge—and decrease your risk of making a costly mistake—by consulting with an attorney that specializes in landlord-tenant laws. Find out more from them about Seattle renters’ rights and your legal responsibilities as a landlord in the state of Washington.
2. Choose You Partners Carefully
If you are venturing into the rental industry with a business partner or investor, it’s important that you find a partner who is honest and transparent before undertaking such a big business transaction. Evaluate your values and end-goals and make sure those align before you acquire properties together. For example, people can have different reasons for wanting to invest in real estate. Some are strictly interested in making a profit, while others may be purchasing a property that they hope to use for their own family in the future. Also, before you take on a partner, discuss any renovations that may be required at the properties you’re eying and how you will share the costs for those upgrades.
3. Be Pragmatic When Setting Rent
Purchasing and renting a property is an investment, and rent is your revenue. You need to set a rental rate that makes you a profit on your investment and covers all associated costs. However, you also should research the Seattle area and its current market rates to ensure yours are comparable with what other landlords are charging for similar properties. If you overprice your rental properties, you will struggle to fill them. Extended vacancies and high turnover rates are equally detrimental to your investment, and having a good, long-term tenant who pays punctually and takes care of the property is preferable to gambling with expensive rent. You also need to consider what you will and will not allow tenants to have in your rental units, such as pets or will you allow them to paint the rooms, etc.
4. Market Your Properties Effectively
You cannot afford to sit on a residential or commercial rental property in Seattle that is empty and not making you money. To fill your house, condo or other residential property, you have to market it effectively to your target audience. You should implement a variety of strategies to advertise the vacancy and not only reach a wide pool of potential tenants but also to connect with the right candidates. Are the tenants you hope to attract looking for homes on Zillow, Craigslist or Trulia? Do they read the newspaper, in print or online? Do they check community pages on social media? Once you determine your target demographic, you can market your property in a more strategic and efficient manner.
5. Properly Screen Your Tenants
One of your top priorities as a landlord in Seattle is to find qualified renters who will be good stewards of your property, pay on time, and communicate openly with you. By haphazardly filling your rental home or other properties with tenants, you run the risk of putting in people who won’t pay rent on time—which can derail your profits—or who will force you through a costly and time-consuming eviction process. You are also inherently responsible for setting a positive tone for your tenant-landlord relationship.
Begin your screening process with an extensive application and then follow up with an in-person conversation with interested renters. From there, contact their references, which should include past/current landlords and personal and employment references. Finally, run a criminal background check, review their credit report, and look at their eviction history.
6. Don’t Cut Corners on Documentation
Before renting out a house for the first time, spend time collecting important forms and documents, such as condition reports, Washington-specific leases, locally required disclosures, and rental applications. Make sure you create a copy of each important document and don’t rely on the tenant to turn them back in their copy. It’s also a good practice to save an electronic file for each form or document to have available in your archives. Hint: There are technologies that help landlords with this.
7. Maintain a Reserve Fund
You are almost certain to have unexpected expenses when it comes to being a landlord in Seattle. Typically, this includes planned and unplanned maintenance and emergencies. Even if the damage is the fault of a tenant—which means they should cover the cost of repairs—you likely will have to pay out of pocket to fix the damage and return the property to its former conditions. Your reserve fund can also serve to cover large capital improvements, such as replacing a roof or repainting the exterior, putting you in a position to sustain a profitable real estate investment.
8. Hire a Property Management Company
One of the most beneficial partnerships you can develop as a landlord in Seattle is with a professional, full-service property management firm, such Powell Property Management. Property managers, whether individuals or companies, assume many of the responsibilities listed above. They can help you navigate the tenant-landlord relationship and avoid unwanted legal situations; market your properties to your target demographics; keep records of all important transactions and paperwork; vet new prospective tenants; and maintain positive communication with your renters.
What Makes a Good Property Manager in Seattle?
Because your property manager plays such an essential role—filling in for you on many occasions and acting as your intermediary—you must do your due diligence to hire the right individual or company. This is especially important if you don’t live in Seattle or even Washington State and you’re trying to care for your real estate investments from afar.
There are several key qualities that make a top-notch property manager in the South Puget Sound area. Besides ensuring their service area encompasses the location of your property and that they offer the specific services to suit your needs, you should also look for a property manager that possesses deep knowledge of the local area and the real estate industry. Other desirable qualities include strong written and verbal communication skills; knowing how to leverage modern-day property management tools and technology to work smarter; and good organization and planning skills with well-defined processes and protocols for handling rent collection, dealing with complaints, responding to emergencies, maintaining financial records, screening tenants, and more.
Most importantly, you want a reputable company that you can trust to act with integrity and maintain open lines of communication so you feel at peace about your real estate investments. In the best-case scenario, your Seattle property manager can even help you save money in a variety of ways.
Choosing Better Property Management in the South Puget Sound
Finding a local property management company that is honest, transparent and competent is one of the most important tasks you will tackle as a landlord in Seattle. Our team at Powell Property Management is ready to fill that role for you. We work with numerous property owners in the South Puget Sound area to market and manage their residential and commercial properties. Partnering with Powell Property Management maximizes the ROI of your real estate investment and relieves you of numerous daily responsibilities, ultimately giving you peace of mind and confidence as a first-time landlord.