Have you decided to become a landlord?
Buying a rental property or converting your residence into a rental is a big step. Committing to becoming a rental property owner has the potential to change your financial situation for good. You'll receive steady profits and have the ability to make further investments.
But all of this doesn't come easy. As a self-managing landlord, you need to deal with a variety of issues and challenges on a regular basis. Tenant screening, rent collection, maintenance procedures, and routine inspections form only a part of your workload.
In this article, we'll list the essential tips for first-time landlords that will make your life easier. Follow the tried-and-true recommendations that will help you make the most out of your first landlord experience.
How do you find great tenants? Start by weeding out the ones who don't fit your criteria. It's an important process because you want to ensure that your tenants pay rent on time and treat the property fairly.
Aim to have a screening procedure that covers all the basics. Your screening process should cover the following aspects:
You must also be aware of the Fair Housing Act (the FHA) principles. This federal statute is combating discrimination in the housing market. For instance, you can't pick your tenants based on their religion, familial status, race, disability, nor national origin.
You have to find the right amount for the monthly rent payments. It's important to determine what is the correct balance between a rent too high or too low in your particular neighborhood.
When your rent is too high, you'll have a harder time finding tenants for your property. If you've already found them, it's likely that they will move after spotting a much better deal.
That said, setting a rent that is too low comes with its disadvantages as well. You'll fail to maximize the return on your property investment. Plus, some potential applicants may feel that your offer is too good to be true and will skip the listing.
The only way to overcome these challenges is to conduct comparative market analysis. During this process, you check what the other rental owners are charging for comparable properties in the same neighborhood. Then, you can align your price that would fit the general rental pricing trends in your area.
Your lease agreement is an essential document that dictates the relationship between you and your renters. Only Landlord-Tenant Laws hold a higher place in the hierarchy of legal importance.
Check that your lease agreement addresses these points:
Do you feel that strictly enforcing all of the rental rules might make you a bad landlord? Many first-time rental owners think that they have to be more accommodating to their tenants. While a friendly and open attitude is a must, it's still important to implement all of your lease clauses.
When you have a grace period, you should always demand the full amount after this period has finished. Don't make any compromises on initially set rules, including policies on smoking, pets, and painting the walls.
If you get too comfortable with your tenants and give them plenty of unnecessary leeway, it's likely that they will start taking advantage of your kindness. You can always negotiate over certain rules and try to see their point of view, but never accept someone breaking the lease.
As a rental property owner, you are subject to a host of laws and regulations. These have been put in place on a local, state, and federal level. At all times, you need to comply with these laws. Incompliance usually leads to costly legal issues.
Here are some of the things that you should learn about:
Consider hiring a professional property management company to eliminate self-management stress and worries. Teaming up with a reputable company means that you can forget about all the daily tasks and duties of a landlord.
An experienced full-service property management firm will take care of all your needs like advertising, tenant screening, upkeep, and rent collection. You can rest assured that they are maintaining and growing your real estate investment.
The first steps toward becoming a landlord require a lot of research and learning. In order to succeed, you need to know the basics of property management. Among other things, you have to:
You can also hire professional property managers for extra help! Contact Suncastle Property Management today!