10 things I wish I knew when I got started in Roommate Rentals by Gabriel Falk, Founder / President of That Sweet Rental:
Disclaimer: I’m not an attorney, this is solely for educational purposes and I suggest you obtain legal advice from a competent attorney!
Real Estate Investing via Roommate rentals: Separate from your personal life.
Know when to separate your personal phone number and a dedicated business line (such as a telecommunication system like RingCentral or even having a Google Voice phone number) to be utilized for your tenants and other business professionals to reach you so that way you can keep a separation between work life and personal life.
Real Estate Investing via Roommate rentals: Pre-qualify the tenants.
Proper pre-qualification questions with potential tenants to make sure that they’re going to fit your criteria before you decide to meet with them and/or having them do an application for background check. Elaborate with them so that they understand that it is a roommate rental and not just a traditional rental as a lot of people don’t tend to read advertisements and it’s full description that already states everything.
Real Estate Investing via Roommate rentals: Manage your utility bills.
If you’re planning to include all utilities it would be best to consider solar panels, if that’s too cost prohibited at a minimum to cut down utility costs by putting in timers for receptacle switches in common areas such as living/dining room areas, etc. Do not install them in private common areas such as bathrooms. LED lights are fantastic and last a long time and are inexpensive to use. Always add a reasonable percentage to your rent pricing to compensate for the excess usage that tenants tend to overuse when they know that all utilities are included as many times they do not become mindful of their excess usage unfortunately so it’s important to implement things into place to mitigate these excess costs. Something to consider when adding washers and dryers including the utilities of that usage is maybe consider putting in coin laundry it is something that we have not done as of now but I have thought about implementing this strategy next. Providing your tenants with laundry facilities on site keeps tenant staying for longer periods of times but it is not necessary if your pricing is Affordable and you provide good value your tenants will stay regardless I’ve learned.
Real Estate Investing via Roommate rentals: Surveillance Matters!
Surveillance cameras in common areas such as kitchens, laundry rooms, living and dining room areas including exterior of the premises is important it also cuts down a lot of phone calls from “he said she said” when it comes to people taking someone’s food it comes down to the Honor System and tenants need to know how to respect what belongs and doesn’t belong to them. Example: people think twice about doing something that they shouldn’t be when they know that they may be recorded. Be sure to have a good attorney draft up a surveillance addendum for your tenants to sign at lease signing acknowledging that they consent to this surveillance recording in these common areas due to the multi-tenant nature.
Real Estate Investing via Roommate rentals: Keyless is worth doing!
A keyless entry system is a great idea instead of using keyed locks because in the event that you have a move-out occur you don’t need to worry about switching locks out every time! Instead, you just switch an access code out and then add a new code. We presently use Schlage keyless deadbolt and Schlage keyless auto locks and they are just fantastic products! Always make sure to use a name brand 9 volt battery when changing the battery out so that it lasts the longest time frame possible (usually a solid year sometimes longer depending on usage) so don’t cheap out on cheap batteries as you will notice a difference.
Another thing that’s great is that the tenant cannot lose a key since they have a code that is given to them. I always suggest that it’s best to go with this route because it becomes less expensive overall and during move out’s you can easily just remove their code and not have to change the main entrance keyless entry as well and end up giving a new copy of keys out to all of the roommates in the house instead you remove just the code to the bedroom and the main entrance and then add in the new code for the new tenant coming in and all of the other roommates that reside can wind up using the same code that they have been given when they moved in which is different than the one you just removed.
Real Estate Investing via Roommate rentals: Hire a quality cleaning service.
Having a cleaner with a keen eye for detail to provide a monthly minimum of deep common area cleaning is important to keep the household staying nice and neat and allows the tenants to see that it needs to be kept to that degree on a daily basis.
Real Estate Investing via Roommate rentals: Pest Control is something that needs to be done every other month.
Pest Control is something that needs to be done every other month though we do our best to do it every month regardless if the tenant is keeping the household clean or not. It should be taken care of as a priority to keep everything in the household free of pests, it also gives you a way to observe the residence when you’re there so that you can see things that may be missed like maintenance that should be looked at that they might not have told you about and you can also be able to see that they’re keeping the property in good repair order on a day-to-day basis.
Real Estate Investing via Roommate rentals: Being proactive will make you profitable.
Real Estate Investing via Roommate rentals: Be firm yet fair.
Roommate rentals can feel like “babysitting adults” as it’s time-consuming at times so it’s important that you are a person that can handle working with people and be fair enough but yet firm to make sure that they do what they’re supposed to do and you provide a service that they would expect.
Real Estate Investing via Roommate rentals: Better have a system!
See you at a meeting soon!
The Southwest Florida Real Estate Investment Association is the leading source of SWFL real estate investing events that provide investment education and networking in southwest Florida. We analyze the housing market and foreclosures and provide information, education and networking events in order to build a network and knowledge base for investors and potential investors. Our members include real estate agent, brokers, investors, hedge fund managers, rehabbers, wholesalers and more.
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