Memphis has a resilient rental market, offering affordable property prices, growing tourism, and low unemployment. It’s also a vibrant, bustling place with plenty of interesting things to see and do.
All these factors make this city a top choice for renters as well as real estate investors.
Before you rush out and buy an investment home in Memphis, read this guide to what you can expect when you manage rental property on your own and why it’s always a better option to get professional help.
Know the Rental Property Laws in Your Area
It’s vital to familiarize yourself with the landlord-tenant laws in your state, county, and municipality. These will guide you when setting up leases, collecting overdue rent, and even undertaking evictions if necessary.
While long-term rentals are accepted and welcome during the current housing shortage, some cities place severe restrictions on short-term rentals. So, if you’re considering entering this lucrative market, be sure to arrange the correct licenses and stick within the bounds of local laws.
There are two major federal laws you must understand if you intend to manage long-term rentals. These are the Fair Housing Act and the Fair Credit Reporting Act.
If you ever need to evict your tenants, knowing the law will stand you in good stead.
A real estate lawyer or experienced property manager can guide you through all the legalities associated with long-term rentals.
They can also help shield you from some of the losses associated with evictions if you sign up for an eviction protection plan as part of your property management package.
Conduct a Rental Analysis
The next step in property management is determining a fair rental price for your investment home. You do this by undertaking a rental analysis.
This involves researching similar rental properties in your area to find out what the landlords are charging their tenants. You should look for properties that match yours in terms of age, size, and condition.
If your home has extra features, like energy-efficient appliances, a landscaped garden, or an outdoor entertainment area, these features make your property more appealing to renters. This means you can charge more rent.
A pet-friendly policy also means you can charge more, especially if other rental homes in the area don’t allow pets.
While there are risks associated with allowing pets in your rental property, a comprehensive lease agreement and substantial pet deposit may help you avoid some of these problems. Hiring a property manager to keep tabs on pet-friendly properties is another effective way to reduce the risks.
Explore Necessary Repairs and Upgrades
During this research, you’re bound to find out which extra features attract higher rates. Consider implementing some of these in your rental property.
Be sure to focus on value-added improvements that will enable you to increase your rent while adding to your home’s value.
New appliances, a fresh coat of paint, and a new garage door can all add to the appeal of your property. Installing an expensive home improvement item like a swimming pool, might not.
Some people feel that a swimming pool involves too much maintenance and poses a risk to small children and pets. A property manager or real estate agent can best advise on what tenants in your area find most appealing.
Before you advertise your property, you must take care of any necessary repairs while the home is empty. It’s also a good time to engage in a thorough deep cleaning and get all your routine maintenance tasks up to date.
Before you start marketing your property, you should ensure that it’s looking its best.
Marketing Your Property Effectively
The first step in successful marketing is creating attractive images that stand out online. Remember, you can use these creative efforts for years, so it’s worth going all out.
It’s worth paying for professional staging and hiring an experienced real estate photographer to create the best images possible and edit them to perfection.
Be sure to capture all the major features of the home, such as the bedrooms, bathrooms, kitchen, and living areas, as well as some exterior shots. Gorgeous images help tenants picture themselves living in the home and supplement the information provided in your property description.
When describing your property, try to use language that conveys information while highlighting the appeal of the property. Be sure to include important information, such as:
- Distance to nearby amenities
- Lot size
- Number of bedrooms and bathrooms
This is your chance to highlight the extra features that allow your property to stand out, such as solar panels, energy-saving appliances, and whether you accept pets.
Tie it all together with an eye-catching description that draws attention to the home’s best assets. You can also add a video or 3D walkthrough of your investment property if you really want to stand out.
Finally, you should choose one or more listing platforms for advertising your property. Some of the best ones include:
- Apartment List
This might seem like a lot of work, but it will pay off by attracting the right type of tenants. You can also use the listing again if you ever need to find new tenants.
If you don’t have time for this window dressing, a property manager can assist you with this aspect of marketing your property. They know the best places to advertise and how to best capture the essence of a property using pictures and words.
Finding Good Tenants
If you’ve done your marketing right, tenant applications should start to stream in shortly after you list the home online.
It’s vital to ask pertinent questions on the application form so you don’t waste time with unqualified tenants or those who aren’t truly interested in renting the home.
Be sure to consult a lawyer or property manager about whether these inquiries are legal in your jurisdiction:
- Personal information
- Move-in date
- Names of people living in the home
- Eviction history
- Employment status
- Criminal history
You might need to describe these sections slightly differently depending on where the property is located. If you’re renting a pet-friendly property, you should ask some questions about the family pets, too.
Finally, you must get the applicant’s permission to perform a background check on them.
Go through all the applications and set the best ones aside. Your next task is to carry out tenant screening or background checks on each of the applicants according to local laws.
Some things you should check up on include their identity, employment status, eviction history, and criminal record. Make arrangements to meet qualifying tenants at your property and show them around.
Draw Up a Fair and Legal Lease
It’s best to draw up a basic lease before you find tenants, as it can take some time to finalize this document.
Don’t download a generic lease from the internet. Rather, consult with an experienced real estate lawyer or property manager when setting up a lease. These experts can best advise you about intricacies like security deposits, pet policies, and more.
If your tenants want to negotiate some terms of the lease, you should only indulge their wishes if your lawyer or property manager agrees.
Your lease will guide the relationship you have with your tenants, so you must ensure it protects both your rights and your tenant’s rights.
Go through every clause of the lease with your new tenants and encourage them to ask questions. This will prevent future misunderstandings about your responsibilities.
Carry Out Regular Property Inspections
Property inspections are one of the most time-consuming aspects of managing a property. They’re also one of the most important.
During these visits, you can check up on whether your tenants are complying with their lease agreements and make a note of any required maintenance.
It’s also a good chance to carry out routine maintenance to prevent expensive repairs and replacements down the line.
Property inspections provide a chance to interact with your tenants and build positive relationships with them. You can find out about any problems they’re experiencing and question them about desired upgrades.
Keeping your tenants content is the best way to encourage lease renewals and protect the value of your investment. Unfortunately, it’s also a time-consuming task, especially if you live in another city.
A property manager can carry out these inspections on your behalf to save you the time and effort involved.
While the state of Tennessee doesn’t mandate any notice period for property inspections, you should give your tenants at least 24 hours’ notice before you arrive for an inspection.
Stay Up-to-Date With Property Maintenance and Repairs
All landlords must compile a detailed checklist of routine maintenance tasks and stick to it year-round. Routine maintenance is a vital part of keeping your property in good order and helps maintain the implied warranty of habitability between landlord and tenant.
Some of the most important things you need to stay up-to-date with include:
- Roof inspections
- HVAC and air-conditioner servicing
- Checking for leaks
- Servicing appliances
- Testing carbon monoxide and smoke detectors
- Cleaning gutters
- Servicing water heaters
- Pruning trees
If you perform these tasks regularly, you contribute to your tenant’s safety and convenience. You also protect your property from damages due to failures in these systems.
Encourage Lease Renewals
Property inspections, routine maintenance, and good tenant relations all contribute toward lease renewals, but there are a few other things you need to do to encourage tenants to renew their leases.
You should advise your tenants of your desire to renew their lease at least three months before the expiration date of their lease.
If your existing tenants don’t accept the offer, this gives you enough time to start your search for new tenants before the current lease expires.
Should your tenants seem a little hesitant to renew their agreement with you, you can consider sweetening the deal with incentives. These may include things like:
- A delayed rent increase
- A gym membership at a local fitness center
- Discounted meals at a nearby restaurant
- Implementing a desired upgrade
It’s human nature to continuously search for better circumstances, so there’s a good chance your tenants will have their feelers out for a cheaper or more convenient property as their lease nears its end.
Building a good relationship with them from the start and making your lease more attractive can help keep them in place.
Consider Property Management Software
One of the most useful landlord tips is to make use of property management software. This technology acts as an important portal for keeping track of all your responsibilities.
It’s useful for communicating with tenants in real-time and helps you keep track of the following:
- Rent payments
- Tenant correspondence
- Maintenance requests
- Vendor payments
- Tax information
Online tenant services help streamline rent collection by offering varied payment options and sending rent reminders.
Property management software is one of the most effective ways to save time and simplify everything when you manage your properties on your own.
If you work with a property manager, these technologies are part of the deal. It helps you stay in touch with your property manager and keep track of payments, disbursements, and invoices.
You Need Professional Help to Manage Rental Property
To succeed in property management, you need to give your attention to each of the above tasks as and when required. This can take up a considerable amount of your time, especially if you own more than one property or need to manage rental property in another city or state.
That’s why most landlords choose to hire an established property management firm to act on their behalf when it comes to keeping their rental properties running smoothly.
When you hire an expert to perform these tasks, you’re assured of the very best service, which ultimately means happy tenants, fewer vacancies, and a good return on your investment.
Reedy & Company has over 20 years of experience in property management services. We can assist you with marketing, finding tenants, keeping your property well-maintained, and avoiding vacancies.
Get in touch to experience the best benefits of hiring an established, professional team of real estate experts.