Your ideal rent will be determined by your marketplace and your personal sales skills. Start by researching the marketplace; find out what other people with similar properties charge. The key is knowing your competition. Find out what properties are available for rent in your same general area, what features they have, and what the monthly rates are. Make calls to other rental property owners, introduce yourself as another landlord, explain you are trying to keep up with the marketplace, and ask your questions. People are generally very cooperative and helpful. The better you know your competition, the more likely you are to become allies, working together on common problems. An added bonus is that when you are ready to sell, you will probably approach the other local landlords first to offer your property for sale, and potentially save money on real estate commissions.
If you have done your homework properly, the rent you are quoting should be consistent with the marketplace. If you meet price resistance, say something like this: "I am a new investor, and perhaps I did not do a very good job researching what other landlords of similar properties charge. Do you mind sharing with me some information regarding who is charging the amount you say is fair for my property?" This either calls their bluff, or gives you additional information with which to do a reality check on your rates. Sometimes, your asking rent is fair but you are afraid of losing a prospective tenant. Lowering your rate is not the answer. Instead, offer the first month free, the first month at half price, or some other incentive that works out the same for the tenant.
Many state laws limit you to one month's rent as a security deposit for residential properties. Even if you are legally allowed to charge more, one month seems to be the norm. States that do not have the security deposit limit are usually the ones that have not passed any uniform landlord/tenant legislation. As a result, they are usually also the ones with outdated eviction procedures that can take up to six months, with the tenant paying no rent in the meantime. If you are in a state without security deposit caps and you have a tenant prospect with a poor credit history, obtain at least two months' rent as a deposit. Landlords for business properties usually charge two months' rent as a security deposit.
Even without business failure, large corporations are the worst ones about paying their bills on time because of high turnover in their accounts payable departments. They are also the ones who will simply ignore your bills for late charges month after month and then, at the end of their lease term, practically dare you to sue them over the money. You both know you cannot afford to tackle them in court. You lose the money, unless you have a security deposit.
One of the ways I deal with requests to waive security deposits is to write a new clause into the lease. It says that if the rent is ever received by me on the sixth day of the month or later, the tenant will have to pay the security deposit. I make it the tenant's problem to get that money to me on time. If he or she has to overnight it each month, just so it is not delayed in the mail, that is the tenant's headache, not mine.
Some tenants truly cannot afford the entire security deposit, up front. They will not be able to rent your property if you insist on it. In those circumstances, I charge the full security deposit, but collect only a portion in advance. The remainder is billed to the tenant over the next two or three months. If the tenant prospect cannot afford that, he or she cannot afford your property. That person is living too much on the outer edge of his or her finances. One blip in his or her life, and you will not receive his or her rent check on the first of the month.
Our website is not responsible for the information contained by this article. Webworldarticles.com is a free articles resource thus practically any visitor can submit an article. However if you notice any copyrighted material, please contact us and we will remove the article(s) in discussion right away.
This article was sent to us by:
Jack E. Rogers at
07042010
1. Things to Know Before Selecting an Apartment
All articles in this directory are property of their respective authors. Additionally, read our Privacy Policy
© 2010 WebWorldarticles.com - All Rights Reserved.