As a landlord, it’s up to you to determine what you want your rental policies to be.
As long as your policies are in accordance with the law, you can structure your lease agreement based on your preferences.
With that in mind, here are the top 5 rental policies all leases should include.
Security Deposits
Every lease agreement should require a security deposit from your tenant. A security deposit acts as a safety net to cover property damages and unpaid bills when a tenant moves out. In your lease agreement, you should be clear on the deposit amount, when the deposit will be returned, and what conditions warrant your keeping the security deposit.
It’s important to know that security deposit policies are regulated by state laws. These laws oversee the maximum amounts for security deposits, how quickly landlords must return them to their tenants, how security deposits are to be kept, etc. Each state’s laws are different, so make sure to review your state’s legislation before you finalize your lease’s security deposit policies.
Late Fees
One of the key components of your rent policy is late fees. Enforcing late fees is the best way to minimize late payments. Usually, the threat of a late fee is enough to incentivize tenants to pay on time. If a tenant misses a payment, you need to make sure to actually enforce the penalty. That way, your tenants don’t end up taking advantage of you in the future. While enforcing late rental fees manually can be tough, using property management software to automate late fees makes the process as effortless as possible for you.
In addition to late fees, you need to make sure your lease agreement includes information on grace periods. Offering your tenants a few days to get their rent payment in before charging a late fee accommodates circumstances that require flexibility, such as a tenant who receives their paycheck the same day that rent is due.
Pet Fees
Pets are a liability to your property. They are prone to causing scratches and other damages, as well as disturbing other tenants.
With that being said, you most likely don’t want to deny tenants who have pets. According to a recent study by Apartments.com, 90% of renters own pets. If you don’t allow pets, you drastically limit your pool of renters.
Instead, you can implement a rental pet policy that charges your tenants if they want to bring pets into your unit. You can charge a one-time pet fee that a tenant pays when they bring in a pet ($50-500), monthly pet rent on top of normal rent ($10-60 per month), or a combination of both. With this added income, the benefits of allowing pets outweigh the potential damages pets might cause.
Renter’s Insurance
Requiring your tenants to purchase renter’s insurance can save everyone trouble down the road. Renter’s insurance covers damaged and lost property in the event of a break-in, storm, fire, etc. While your own insurance plan will cover damage to your property in such cases, this coverage doesn’t extend to any of your tenants’ belongings.
If accidental damage does occur to your property and your tenant has renter’s insurance, their plan will kick in before yours does, which saves you some hassle with your insurance provider. Furthermore, renter’s insurance can help prevent lawsuits from tenants in instances of damage or theft. Best of all, renter’s insurance is really affordable.
Smoking
Smoking is bad for your property on all fronts. It can lead to yellow discoloration in your walls and ceilings, and the buildup of tar and nicotine leaves unpleasant odors in the unit. Smoking also causes buildup in heating, ventilation, and air conditioning units, which may require costly repairs. Second-hand and third-hand smoke can also negatively impact the health of current and future tenants.
As a result, most landlords don’t allow smoking in their rentals (which is recommended). If you do choose to allow smoking, make sure to establish clear rules in your rental agreement contract as to where smoking is permitted and how damages will be handled.
Conclusion
At the end of the day, it’s up to you to determine your own policies. With that being said, you should strongly consider the five policies discussed in this article. While all lease agreements are unique, it’s important to be clear about all your policies to avoid problems down the road.
