9 Ways To Be Successful In Renting Out Your Salt Lake City Home During COVID-19
The COVID19 disease has brought much of our society to a near standstill. Anyone who is sick is required to stay home from work while some companies have taken a preemptive approach and are laying off their employees. With the social distancing initiatives in Utah, the real estate market has not unaffected.
Some sellers are pulling their properties off the market, hoping they will have greater success when society normalizes. However, there remains the uncertainty of if the effects COVID-19 will have on the economy will make the home worth less than it was at the beginning of the year. Because of this, other owners are trying to close a sale as fast as possible. However, this is not without challenges of its own.
With people limiting social contact, buyers may be less inclined to schedule showings, and open houses—usually good for attracting a larger number of buyers to see the home in a shorter amount of time—are discouraged for the very reasons they are a good tool in normal circumstances. Very few things are normal right now, but there is one constant. Whether people rent or own, they will always need a place to call home.
As a real estate brokerage whose primary focus is property management, we deal with many rentals. While we are seeing a slight decline in interest, we are still finding qualified tenants to move into the homes we manage in a matter of weeks even though there are currently extra hindrances and limitations. Many people have to move right now despite the current state of society. That single parent whose lease is ending soon needs to find a new home. The couple who just had their FaceTime wedding but aren’t ready to buy a home need an apartment. The family that relocated to Utah for work needs a place to stay.
Due to the need for housing and the reduced risk of renting since a lease is temporary, people are more likely to rent a home sight unseen than buy. Though renting out your home during this uncertain time is not without risk, with the unknowns and challenges of waiting to sell or selling now, the option of receiving monthly income from stable, long-term residents may seem more appealing. If you are of this mindset but don’t know where to start, you’re in the right place.
Renting out your home is similar to planning a hiking trip in numerous ways, and we have put together this trail guide of nine ways you can be a successful landlord and mitigate your risk through these unprecedented times. Get your backpack ready. You will want to pack these for when you embark on your journey.
Competition is Key
Hikers wending their way down a trail will hear the songs of birds ringing through the trees as the robins call out to find their perfect match. As more robins join the chorus, the competition intensifies.
Similarly, since more homeowners will likely decide to rent instead of sell, this will increase the number of homes on the market, which will become a vast chorus of options for renters to choose from. Renters are attracted to homes that are in the best condition. If you want to maximize the market value of your property you will want to make sure it meets this expectation. With the options that will be available to renters, it will be easy for them to pass up your property if they find something better. Along with offering a home that can compete with the quality of the other homes on the market, you will want to compete with the pricing.
While shopping online recently, I found what I was looking for and then compared products. I found the ones that were the best quality, and, though the prices were similar, I purchased the one that cost slightly less. The same applies to shopping for a rental. As an owner, you can price your home at market value, but if you put the price slightly below market value, you are more likely to find someone who will, metaphorically, add to cart and buy.
Speaking of online, advertising online is going to be one of your greatest tools at this time. Yes, this goes against the hiking analogy since many consider going out into nature to be a time to slow down and unplug from the noise of the internet, but the circumstances of today necessitate stepping away from the traditional isolated cabin or tent in the woods instead making camp at a lodge with wi-fi and cell service, in a sense.
Traditional methods of placing “for rent” signs in yards or hoping to find interested tenants via word of mouth aren’t as effective as they used to be, and they are even less effective now that people are not out driving as much nor talking to as many people. Instead, you can take advantage of the digital age we live in. There are numerous websites tenants are making a part of their world while they aren’t going out into the world. If you use a syndication tool, you can even post to multiple websites with one click.
If you are worried about how to put together an online ad, never fear. Once again, technology is on your side. You can learn what to include in the text by reading other ads as examples, and you can get excellent photos with your smartphone with a bit of editing to make them look more professional without needing to hire a photographer. If you post your photos with a watermark such as your phone number or company website, you can help prevent scammers from using your photos in a fraudulent ad.
Make a Video Walkthrough
Given the size of many national parks, it is impossible to see all the sites and explore all the trails in one trip, so hikers look through guides and maps to find the areas they are most interested in seeing, and they must stick to a carefully planned schedule to make sure they have time to get to everything on their list.
Before COVID-19 hit, prospective tenants were more inclined to browse the market and schedule showings for homes they want to take a look at but might not be serious about renting. Now, they are not browsing. They are looking through websites and ads to find the homes they are most interested in seeing, and they aren’t going to waste their time scheduling showings for homes they aren’t able to get a good feel for from looking at the ad. It’s one thing to include good photos, but you can up your game by including a 2-4 minute walkthrough video. What better way to give tenants a feel for the home than guiding them through the layout and showing them all the great features without them needing to visit the property?
Social Distance with a Self-Showing System
With your online ad, great photos, and video walkthrough, you were able to catch someone’s interest, and they want to see the home in person. Now what?
Just as most trails allow hikers to explore the area without a tour guide, you can create a self-showing system to maintain social distancing by allowing prospective residents to explore the home without you needing to be there. We recommend putting the keys in a digital lockbox. You can then give the prospective resident a one-time code to access the property. If you do, be sure to check on the home every few days at a time no one will be there for a showing, and make sure the lights are off and the exterior doors are locked.
Find Exceptional Tenants with an Exceptional Screening Process
Someone who enjoys roughing it on a high adventure trip may decide to pack only minimal essentials, possibly opting not to bring a tent or bother with lugging around large amounts of water. They would, however, recognize the importance of clean water and bring a water bottle with a filter. The best filter would enable the adventurer to get questionable water from a stream and sift out the gunk so they are left with safe water.
While you are embarking on the high adventure of being a landlord, the most important thing you must do at this time is to ensure you have a thorough screening process in place that is in accordance with Fair Housing Law to filter out the applicants who do not qualify. With people being laid off in record numbers and unemployment filings at an all-time high, there may be people interested in your home who aren’t able to pay rent at this time. Though it is saddening to consider all the people in need of help, landlords need to take measures to protect their interests so they are not hurt through not receiving rent payments.
When you get landlord verifications, make sure the applicants didn’t move out of their previous residence for the inability to pay rent. Perform an employment verification to verify that income information and paystubs applicants submitted are accurate and haven’t been forged or doctored.
Don’t let the possibility of unqualified applicants deter you. With your careful screening process, you will be able to sift out unqualified applicants and find someone who will want to rent your home who is qualified and among the many who still have sold jobs.
Go Digital for Document Signing
You should avoid meeting in-person to sign leases. Instead, have a way to sign leases digitally. There are numerous property management and electronic signature software that will make this possible. Make sure your tenants consent to sign electronically so that the signatures will be valid it the status of the lease is ever called into question.
Collect Payments Online
Even during better times, having a way of collecting payments will make being a landlord easier. You will save your tenants the trouble of driving out to deliver a check in person, and you will save yourself the trouble of rent checks getting lost in the mail or tenants making excuses about the checks getting lost in the mail when, in reality, they haven’t sent a check.
Now, having a way of anything online payments is even more important. It enables you to eliminate in-person payments as an option and limit social contact, and it eliminates tenants using being quarantined at home as a reason for not hand-delivering the rent payment to you.
Should a new tenant move in, you can collect the security deposit using electronic methods, a wire transfer being one of the safest options. ACH transfers should not be used. As with under normal circumstances, you should only collect security deposits and first month’s rents via, certified funds.
Use Tech-Savvy Vendors
Non-emergency maintenance should be on hold right now. However, if an emergency arises—the house will flood unless a plumber completes repairs, an electoral issue requires urgent attention, there is a problem with the HVAC, or some other issue that affects the habitability of the home—you will want to work with vendors who are up-to-date on technology. Without your selected vendor needing to meet face to face before completing the work or insisting on a paperwork order and receiving a check in-person, you will be better able to limit your contact with other people. When you are getting quotes for work to be completed, add finding out if the vendor allows for electronic coordination and payments to your list of things to look for.
Have a Plan for a Rainy Day
You’ve charted your course, filled your backpack with tools for success, and made a plan, but nature and property management are sometimes unpredictable. You may stumble upon patches of poison ivy as unexpected situations arise—a maintenance bill, a rent payment coming in late by a few days, etc. Perhaps, a flash flood will cover your path—an expensive major repair, your tenant being unable to pay rent altogether, etc. You get washed away in the stream and find that you are drowning.
However, you don’t have to be taken by the river. Instead, you can have a plan for emergencies and set aside funds for a rainy day. Six months’ worth of rent is the recommended amount to have in savings. Of course, it takes time to build a buffer of this size, so if you don’t already have a reserve, it’s not too late to make a budget and start saving today.
Let the Journey Begin
If you decide to embark on the trail of being a landlord during this time, it is a journey not what risks, but with the market still active, you can find qualified tenants and make rent income through these times. When you begin your journey, be sure the equipment you will need to aid in your success. Despite the current turmoil, you can succeed. Take it from a company that manages over 400 rentals. We know the local market, and it still looks good, and we have numerous new leases coming in and all but a few of our residents current on their payments to show that our tips for success work. However, if you want to be a successful landlord without putting in all the necessary work, contact us today to learn how we can take managing your property off your shoulders so you can focus your efforts on other priorities.