It’s the end of another year, and you’re enjoying a hard-earned income from your rental properties. But you’ve got some last-minute tasks you still need to check off, and it feels a little overwhelming. Wish you had a complete rental checklist?
In this article, we’re providing a landlord’s end-of-the-year rental checklist to make it easy for you! This checklist includes everything from renewing leases to planning your financials for the upcoming year. Let’s get started.
1. Verify Market Rent to Ensure You’re on Par with Competitive Rates
The housing market is ever-changing – and for that reason, rental rates are too. Each year, assess the current market rent to determine whether yours are still accurate or need to be updated.
How can you verify an appropriate market rent? Talk with local property managers or with real estate agents. Another option is to browse credible MLS listings like Zillow or realtor.com to compare similar rental properties and rates.
If you find your rate is too low, you’ll want to raise them to avoid losing well-deserved money. If your rate is too high, consider lowering your rates. Otherwise, you risk losing tenants or being unable to secure new ones.
2. Renew Your Leases
Do your tenants pay their rent on time each month? Respect their neighbors? Change their own light bulbs? If so, you will want to consider renewing your leases with them. You will eliminate the hassle of finding new tenants and footing some bills if you do.
Landlords should offer tenants a lease renewal at least 90 days before the lease expires. This way your tenants have time to decide and give you an answer early. Ideally, you’ll want their answer about 60 days before the lease’s expiration. That way if they say no, you’ll have time to search for new tenants and make any rental updates needed.
You can ask your tenants if they would like to renew their lease via phone, email, or in person. You will need to create a new lease with any agreed-upon changes to the rent and lease terms. They may want to negotiate rates or property updates. If so, consider complying with their request if you feel it is worth keeping your tenants.
3. Complete Your Annual Inspections
Many landlords conduct routine inspections to ensure the integrity of their properties. However, it’s vital to conduct a comprehensive end-of-the-year inspection when reviewing lease renewals and rent updates.
During an inspection, look for signs of property damage or other issues like pests or mold. You should also check the smoke detectors, water and furnace filters, faucets, pipes, and other areas where issues may occur.
These are a few steps you should take when conducting annual inspections:
- Schedule an inspection and notify your tenants of when this will happen.
- Complete a detailed inspection of your property. (Tip: Keep a customized checklist for each property to use as a guide).
- Conduct the inspection, or hire a contractor to do so, and complete a report.
- Take any necessary action in correcting issues or addressing issues with your tenants.
4. Request Updated Insurance Policies from Tenants
Although it’s not required by law, you may have asked your tenants to purchase a renter’s insurance policy. A renter’s insurance policy provides renters with personal liability coverage should an injury or property damage in the rental occur. Your own landlord’s insurance policy does not offer protection to renters, so it’s important they have updated renter’s insurance policies.
You can ask your tenants to provide a copy of their policy’s declaration page or ask them to have their insurer provide proof. You can also request verbal confirmation if you trust the integrity of your tenants.
You’re halfway through our rental checklist! Do you have any questions? Feel free to reach out to our team today.
5. Check Your Property Insurance Rates
You can generally expect your landlord property insurance rates to be about 25% higher than your average homeowner’s insurance policy. Landlords typically have higher coverage liabilities to protect against lawsuits or legal fees if a tenant or guest gets injured.
You likely won’t find discounts on your insurance policy. However, you can save by installing safety devices or bundling your insurance policies if you have multiple properties, for example.
You can ask your insurance carrier for current rates or compare with other carriers to find the best deal.
6. Have a Financial Plan
Having a financial plan will give you the best chance for success in earning a cash flow on your properties. Always keep a budget – or “spending plan” – to manage your monthly income and expenses. This way, you can see what money is coming in and – just as importantly – where it’s going. A budget also helps you properly account for and plan ahead for all operating expenses.
You should include and track the following expenses in your budget:
- Property updates or maintenance fees during tenant turnover or vacancies
- Marketing expenses when finding new tenants
- Landlord insurance policies
- Monthly utilities
- Any occurring maintenance and repairs
- Taxes
Also, make sure that you keep your property and personal finance accounts separate to avoid legal or tax issues. Consult with a professional tax adviser to ensure you’re accurately tracking and reporting finances and know what to expect.
Finally, track the time you spend on managing rentals. Some landlords who treat their real estate income as business income may qualify for the Qualified Business Income Deduction. This means they can deduct up to 20% of net rental income through the tax year, 2025.
7. Thank Your Tenants
Last but not least on your rental checklist: say thank you! Your tenants are the reason you can keep your rental properties operating. It’s a good idea to thank them. Wish them a great year with a quick phone call, a visit to the property, or a card sent in the mail. Your tenants will likely appreciate this kind gesture – and who knows, might even decide to stay longer!
Have questions or comments about this landlord’s end-of-the-year to-do? Other checklist items you’ve found helpful? Contact our professionals at Blackarc Property Management to let us know!