Owning property is almost always a great investment strategy.
What better way to earn a passive income than through leasing that property out – all while maintaining your long-term investment? Rental properties are an effective way to help save for retirement – and, in some cases, facilitate early retirement.
Being a landlord can be intimidating at first, especially when screening potential tenants and collecting rent. The good news is that the worst parts of being a landlord, like fixing problems or collecting rent on time, can get outsourced to a property management company.
That means that all you need to do is sit back and watch your investment work for you. As great as that might be to read, that does not mean you do not need to know a thing or two about being a good landlord.
In this article, you will learn about ten things that you should be aware of if you want to become a stellar landlord:
1. Comply With Laws
The only way your rental business can be above board is to make sure that it complies with all state and federal laws and regulations.
Housing people is a regulated industry, so you must ensure that your properties follow any laws and regulations that are applicable.
Not only will that help to keep your tenants happy, but it will also stop any lengthy legal battles that may occur down the road. As a responsible landlord, you need to research and understand all laws that will pertain to your rental business – or consult a professional to explain it all to you.
One of the most crucial things to consider before buying a property to rent is its location.
Multiple factors affect a tenant’s decision to move into a house, but a safe and convenient neighborhood is always at the top of their list. Look for a property in an area with good schools and safe public transportation.
Choose areas with a booming local economy, those three elements are guaranteed to draw in qualifying and reliable tenants without a problem.
3. It Is All Business
One of the most crucial parts of making this work for you is to accept that renting properties should be treated like a business – and a successful one.
If you choose to not use a property management company to look after your rental properties, ensure that thorough tenant screenings are performed before anyone moves in. Switch your mind into business mode and go through each tenant application with a fine-tooth comb.
4. Rental Agreements
Verbal contracts are never a good idea for rental properties.
You should only ever rent out your property to a screened tenant who has signed a comprehensive rental agreement. That is a binding contract between you and your tenant and helps to clarify each person’s role in the agreement.
That is the best way for you to both be protected if your relationship sours at any stage.
5. Pest Control
While not all lease agreements contain a pest control clause, it is your responsibility as a landlord to ensure that your tenants are provided with a habitable living environment.
That means you should curb and control any infestation problems at the first sign of trouble. Rodents carry and spread multiple illness-causing diseases and breed at a rapid rate.
Do a quick Google search for how to get rid of mice in a house and choose a reputable company to assist.
6. Advertise Your Property Online
We are living in a digital age where most people under the age of fifty use the internet for everything. From making doctor’s appointments to buying new shoes, and everything else in between – including house hunting.
Get a professional photographer in to take photos of your rental houses on a gorgeously sunny day and use these to attract the perfect tenants.
7. Rental Price
Setting the right rental price is not always a cut-and-dry thing.
Apart from location and size, many factors will increase the amount of rent you can demand for your properties. Consider making improvements to your property’s curb appeal to add an instant boost to your price.
If the property was vacant for a while before you bought it, consider getting a pest control company in to get rid of any lingering pests that might not want to move out.
Click here to learn more about how pest control can affect you as a landlord.
8. Renters Insurance
America is the land of the free – it is also the land of the lawsuit.
By requiring renters’ insurance for any property you lease out, you can help mitigate litigation and liability if your tenant’s belongings get damaged during the rental period.
Renters’ insurance does not come with a hefty price tag, so most tenants are happy to oblige.
9. Credit Checks
All landlords should ensure that a thorough credit check is part of their tenant screening process.
Those checks will help you get to know the financial situation that your tenant is in and whether they are a financially responsible person. When reviewing these financial reports, look for red flags such as a large debt, unpaid bills, or an eviction history.
10. Keep Digital Records
Keep digital records of anything to do with your rental properties.
That should include receipts of deposit payments, rental payments, and any maintenance or repair work that gets done on the property. Record all communication with your tenants and maintain an organized tenant system or file for each.
That will help to professionally manage your rental business and keep all communications up to date.
By following the above tips, you can become a responsible landlord in no time, and you will soon be running your rental business without taking on any unnecessary costs or stress. Passive income management should be about staying organized and on top of your game.
With proper methods, being a landlord does not have to be a difficult job – it can be as enjoyable as any other career.