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Insurance For Rented Property

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So you finally found the perfect property that a tired landlord wants to sell. You have to wonder why they trying to sell. Do they want to upgrade their property with a 1031 exchange, have all the money they need selling you a ready made money machine, or has the tenant taken control and is now driving them nuts?



You are going to want to get copies of existing leases, statements of security deposits, move-in inspection reports, rent rolls for the last year, tenant contact information, tenant applications, expenses for the last year and any warranty information for warranties in place. Some buyers even go to the extent of getting statements from each tenant as to their interpretation of their obligations under the current lease. To do the latter, you will need the seller's permission to contact the tenants and they may not want them to know the property is selling.

Once you determine the situation and if you still feel good about going forward you then need to consider a few things. What you do next will make all the difference in the world in your cash flow going forward. If the house is rented, after reviewing the existing lease, you will want to include language in the purchase agreement about receiving current months rent and security deposit at the closing. We make the leases attachments to the purchase agreement.

We like to close on the fifth of the month, and request the seller to pay us the full monthly rent at closing. It then leaves the issue of rent collection to the seller if the tenant is late with their current months rent. It also minimizes the amount we have to come up with at closing.

The rent roll will give you payment history so you will know up front which tenants pay on time and which are habitually late. For the ones with the bad habit, you will know to take immediate action when they are late with their payment so they will know you mean business.

Last years expenses will include payments made to service providers. The list may reveal that you have to pay certain utilities such as water & sewer of trash pick up and this information may not have been mentioned by the seller in the negotiations. The last thing you want at the purchase is the seller canceling a service and the tenant being without water or trash pick up.

You will need to send a letter of notification to the tenant of the change of property management, the date of change, where to send future payments, who to call with maintenance issues and the bank account number where their security deposit is now being held. You can use this occasion to reemphasize your expectations of the tenant's performance under the existing leases.

Use the transition of property manager to meet with the existing tenants and find out if anything is in need of repair. This goes a long way toward good will, and it gets you into the property to do a quick inspection.

Handle the transition in a businesslike manor; remember now you are in the property management business.
Insurance For Rented Property
A landlord of a rental property is expected to ensure it is habitable and comfortable for his / her tenants. So much so, certain states even carry laws that govern maintenance of rental properties by landlords. Generally, taking care of one's rental property is split between the two categories of maintenance and repair.

Repair. If anything on the rental property breaks, malfunctions, becomes inoperable, generally it is the responsibility of the landlord to carry out the repairs as quickly as possible, in order not to put the tenant to any kind of inconvenience. Repairs that are considered the necessities of daily life, include running and / or hot water, heating, air-conditioning, proper ventilation, etc., and should be fixed on a priority basis.

Usually, a landlord is responsible for providing repairs when the damage caused is not the fault of the tenant, such as, a broken water line, an inoperable water heater or some such, where the problem is not due to any direct action of the tenant. Even so, if the damage has been deliberately caused by the tenant, such as knocking over a water heater, as a result of which it no longer functions, it is the landlord who is responsible for carrying out repairs and fixing the problem as quickly as possible, since hot water is deemed a basic necessity. While, a landlord may have to cover the initial costs of repair of replacement, he / she can bill the tenant who was responsible for knocking it over, in the first place.

Similarly, if the property's structure has been damaged, a landlord need's to determine at whose door responsibility should be laid. Even if the tenant caused the damage and will have to pay for fixing it, it is still the responsibility of the landlord to get the repairs done. As well, there have been cases when a tenant fixed the damage and then tried to deduct the repair charges from the rent. Whether, you permit the tenant to get away with it or not, you should make sure they know you are to be notified about any accidents or damages, as soon as they occur.

Maintenance. As a rule, the landlord is responsible for the general maintenance and upkeep of his / her property. This can mean anything small, such as, mowing and maintaining the lawn to something as big as having a new roof put in. In case, you want the tenants to remove snow or mow the lawn, then you will have to state it in the lease agreement so that landlord / tenant duties and responsibilities are clear cut.

Certain tenants will offer to maintain your property in lieu of a reduction in rent. It is for the landlord to determine how much rental discount can be given to a tenant for maintaining his / her property.

For someone with several rental properties and little time to provide necessary repairs and maintenance, it makes sense to outsource these duties. A property management company or a maintenance worker can be hired to handle problems. Large apartment complexes will require living accommodation for your handy man so that repairs and other problems can be handled as soon as possible.

A word of advice, it is better to carry out preventive maintenance so that your property does not require excessive repairs over time. Despite all, it is a wise move on the part of the landlord if he / she screens prospective tenants thoroughly to ensure their property will be well looked after. Visit www.e-renter.com for help with tenant screening and background checks.
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Both Mark S. Lackey & E Renter are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Mark S. Lackey has sinced written about articles on various topics from Affiliate Programs, Real Estate. Mark Lackey is a real estate investor in Atlanta and works with The REI Team at Solid Source Realty, Inc. . He frequently helps other investors in. Mark S. Lackey's top article generates over 1600 views. to your Favourites.

E Renter has sinced written about articles on various topics from Real Estate, Property Investment and Real Estate. To Know about Tenant Screening visit: . E Renter's top article generates over 1600 views. to your Favourites.
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