Protecting your investment usually means keeping it well-maintained, screening for only the best-qualified tenants, and conducting regular inspections. To effectively protect your property, however, you need to have solid paperwork. Rental applications, policies and procedures, qualifying rental criteria, and of course lease agreements are all essential. Without this documentation, you’re at risk and so is your Dallas rental home.
Strong Rental Agreements Protect Investment Property
The lease agreement you sign with your tenants is incredibly important. This is a legally binding contract that states what you’re providing (a safe, habitable rental home), and what your tenant must provide (rental payments and care for the property). You’ll list all the responsibilities and expectations you have for your tenants. A strong lease will protect you by stating:
- Rent collection policies, including how much is due, when it’s due, how it should be paid, and what the consequences are for late payments.
- Maintenance procedures. You’ll want to explain what your tenants are responsible for, including changing the air filters, keeping the property clean, and reporting repair issues right away.
- What the rules are requirements are, such as pet policies, smoking policies, guest policies, and any HOA standards that need to be met.
The lease must be comprehensive and detailed. It must also be legally enforceable and compliant in the state of Texas. Don’t download any template you find online. Your lease will need to reflect the requirements of the Texas Property Code and other state and local laws.
Leasing Paperwork: Applications and Rental Criteria
A solid tenant screening process will always protect your property, and in order to screen residents effectively and thoroughly, you need a good application. Use an online application that allows applicants to upload supporting documents such as IDs and pay stubs. Look for an application that collects information about:
- Income and employment
- Past rental history
- Prior evictions
- Criminal history
- Credit and bankruptcy issues
The most important part of your application will be the signature. You want to be sure your tenants complete the entire application and sign it, giving you permission to gather credit reports and run the necessary background checks.
In addition to a solid application, you also want a documented set of qualifying rental criteria. This will save you and your potential applicants a lot of time. When you tell your prospective tenants what you’re looking for, they’ll have a good idea about whether they’ll qualify or not. Documented rental criteria also protect you against potential fair housing complaints because you can demonstrate that you have a consistent process for accepting and denying applicants. Provide your criteria in writing to anyone who wants to apply for your property.
Property Management Paperwork
What other types of paperwork do you need to effectively protect your investment property? Here’s a brief list:
- Rent rolls, showing when rent was paid and when it was late or if it remains unpaid.
- Income and expense statements that reflect what you earn and spend on a monthly, quarterly, and annual basis.
- Inspection reports that include photos, detailed notes, and videos.
- Maintenance invoices.
- Warranties on appliances and systems.
- Copies of all tenant correspondence.
- Tax forms, particularly your annual 1099.
- Property management contracts.
This is not an exhaustive list, but it gives you an idea of what you’ll need to have in place to protect the condition and profitability of your Dallas-Fort Worth rental property. We have a lot of documented processes and paperwork in place already. We’d be happy to talk about how our lease agreement and other forms can help you have a better rental experience. Please contact us at Assign Property Management.