So you found someone great to rent your property to and you’re on your way to the easy street as a landlord… not so fast. Real estate investing is one of the least passive investment vehicles you can use to generate wealth. Here we will cover some of the many moving pieces of what will be required for the day to day management of your rental property.
This seems simple but it can be daunting because it involves more than just collecting a check. When a tenant pays you rent, you are required by Maryland law to issue a receipt in most jurisdictions. You will also want to note the payment and the receipt number a ledger. This way you know you have accurate records. If you’re not using a property management company you can buy a simple receipt book like this one and use excel or google sheets for your rental payment ledger like the one pictured below. Sample Resident Ledger- Download.
Day to Day Management Maintenance
When a tenant has an issue you are the go to person! This can be made much easier by keeping the following in mind.
First, your tenant probably has a job and you will want to work around their schedule as much as possible nothing hurts tenant retention more than an inflexible schedule, vendors who don’t show up, and an issue that is not fixed or wors, not fixed properly the first time.
Second, this is a customer service business and you want to make sure that you have great contractors doing the work, they are a representation of you and your property.
Third, do not expect your tenant to coordinate their own repairs, this is the best way to create mass confusion for everyone involved.
Best practices for maintenance:
Tip 1– Keep track of your maintenance requests like this. Date reported. Issue reported. Issue overview, what was repaired, before and after photos, and communication between you, the vendor, and the resident.
Tip 2- Screen your vendors. Do your homework on the vendors you hire and get quotes whenever possible over the phone for issues over 300.00
Tip 3- Home warranties are great… on paper. Google search your favorite home warranty company and you will see that very rarely does the work get done right, by a qualified vendor, the first time and that is assuming you can get someone to pick up the phone without a 40 minute wait time.
Tip 4- Know the laws. Maintenance issues that relate to life, safety, or habitability such as no hot water, a sewage leak, or an inoperable refrigerator must be fixed within 24 hours in Baltimore. It is important that all repairs be done quickly and efficiently this will mitigate your liability as a landlord as well as keep your resident happy.
Lead and Property registration:
To legally rent your Baltimore area property you need to obtain a lead certificate for any property built before 1978. There are four different types of lead certs issued by the MDE and two types of rental registrations in Baltimore.
Lead certificates– All properties built before 1978 must have a lead certificate to be legally rented.
Types of lead certificates:
- Limited lead-free.
- Full risk.
- Modified Risk
Inspections are due every 1-3 years depending on several factors, however, your payment to renew the registration is still payable annually.
Multiple Family Dwelling Unit ( MFD)
We cover lead certificates in another article so the above are just the basics!
No matter what type of registration or lead certificate you have you will need to pay annual fees to the MDE and in most cases the jurisdiction where your property is located as well as tracking when the payments are due.
Day to Day Management Bills:
Water bills, electricity bills, Oil heating bills, vendor bills, tax bills, etc are going to come in monthly, quarterly, and annually. You will need to track them as they come in and make sure that your tenant reimburses you for the bills that they agreed to pay for. An important note with water bills, Baltimore City recently changed the law, you will need to give the tenant a copy of the water bill within a timely manner. You can read up on all the changes here.
As you can see the day to day management of your rental property can be either a headache or a rewarding long term experience in wealth building it all depends on the management. If you are looking for a Baltimore property management company to handle the daily grind of your rental property schedule a call with us!