Tips for landlords to minimize risk
08/10/2019 12:08 | Source:
Leasing houses has been an attractive investment in big cities as it makes a stable income out of existing assets. However, to minimize the potential risks, landlords should pay attention to the following tips.

1. Choose tenants carefully

Even if you are desperate to lease your house, make sure to choose the right tenant as they will have the right to use your property once they signed the contract.

What you are looking for in an ideal tenant are honesty, trustworthiness, courtesy, neatness and punctuality. It is not an easy task to find such a person, especially when you only meet them a few times during the leasing process. Still, try to notice their language and behaviours as well as collecting their information including hometown, occupation, rental purpose, number of tenants or opinions about the price. Therefore, it would prevent you from falling into disadvantaged situations such as tenant fail to pay, suddenly move out without notification, or damage your property.

Choose the right tenant
A suitable tenant is who you can trust with using your property

2. Ask for security deposit

It is essential and reasonable to ask for a rental deposit. During the long leasing term, the tenant, at some point, might not be able to pay the rent and suddenly “disappear”. Having a rental deposit of 1 or 2-month rent would prevent the situation. Additionally, the deposit would play as the penalty fine if the tenant breaches the contract. This is usually agreed upon and specified in the lease contract.

3. Make a terms of use

Before signing the lease contract with a tenant, you should notice to tenant about the Terms of Use. Things like the number of tenants or do and don’t in the leasing period should be listed in the Terms of Use.

4. Make a detailed Hand-over Record of housing condition

Hand-over Record of housing condition is what to base on to resolve dispute and conflict once occurred. Therefore, as a landlord, you should make a record of handover of the house’s condition before leasing. It should specify information such as address, usable area, current state, and furniture attached to the home and their conditions (e.g. air conditioners, water heaters, etc.)

Choose the right tenant
Hand-over Record of housing condition is what to base on to resolve dispute
and conflict once occurred

5. Notes for lease contract

We all know the importance of having a specific and detailed Lease contract but deciding which terms should be added is a different story. There should be an apart for term of use and violations to base upon once disputes and conflicts occurred. You should also pay attention to terms such as rental price and price adjustment (e.g. renegotiate of price after 1 or 2 year leasing), the person to pay the monthly rent, term of payment, or rights and obligations of the parties.

The higher the value of the lease contract, the more stringent legal requirements are required to minimize risks and disputes. In this case, the landlord should actively ask for consultation from the lawyer about contents of the contract to minimize possible risks.