A client has bought a rental.
I gave him these instructions:
- Get a copy of all closing papers.
- Research various sources to see how much it can rent for.
- Visit property with a memo pad and write down some details:
Tour yard and grounds, note the existence of trees, rose bushes, fences, and other landscape items. This is List #1.
Inspect the interior of the house and garages and any special buildings. Make a List #2 of all personal property or sheds on the property.
- “Cost out” the closing papers by allocating all items on the work papers in our “Blue Client Residence File” known as Cop FormCost of Property Form. We will help you with this.
- Do a “cost allocation” of Lists #1 and #2.
A residence: A duplex
Caution: Other rules apply to apartment units.
Qualify the prospective renter:
- Lease of at least 12 months is required.
- First and last month’s rent is to be paid in advance.
- A late fee of 10% is applied to rents paid one week late.
- Get a strong written lease prepared by a professional for you to use.
- A refundable security deposit must be paid at the time of lease signing.
- Run a Background check on the rental including a credit score.
- Do not offer to discuss any “lease to own options.” They are losers for property owners, because they commit the owner to a required option not of their choosing.
- These rules are for professional owners of rental property.
Anson Avery, CPA