Becoming a landlord at your first property can be an exciting and scary feeling. This could be a very lucrative real estate opportunity for you. Yet there are so many factors that go into maintaining a property when you are not on the renting side of the fence anymore.
But there's no need to get too overwhelmed or start to have doubts about yourself. You can establish yourself as a great landlord by making sure you take a few extra precautions. Keep reading to check out these 9 tips for succeeding as a first-time landlord.
1. Have a Tenant Screening Process
If you treat your property like a business then tenants are like the customers who keep money coming in for business to stay afloat. But finding good tenants can be like hiring the best candidates to fill a job position. That's why you should put a process of acquiring them in place.
Some of the key things to include in your tenant screening process include background (and sometimes credit) checks, looking at previous rental history and always requiring an application for each adult who would be living at the residence. This helps you gauge how well-equipped an individual may be to take care of your property and pay rent on time.
Don't skip this step at a first-time landlord or you could find yourself stuck with some unpleasant tenants.
2. Write Your Lease Right
Having legal agreements as a first-time landlord will save you a lot of time and energy if stuff ever hits the fan. The thing is that once a tenant signs any contracts, they have opted into whatever rules, regulations and conditions you've outlined in the document. For this reason, it's important to include very specific terms for any and all issues or situations that may arise during the renting period. This includes things such as repair responsibility, rent price raises and evictions.
The more thorough you make the lease, the more you cover yourself from running into legal issues. Hire a lawyer with knowledge of state rental regulations to assist with drawing up the contract and executing any of the legal jargon.
3. Maintain the Property Condition
Although you won't be living there remember that this property is like your place of business. You wouldn't open a bakery and let it sit with a leaky roof for months, would you? Well, the same rules apply for maintaining your real estate locations.
Keeping up with a home or apartment building can start to become expensive. You may be able to cut overhead expenses by learning some basic trades and repair tricks. This way you don't have to go out to spend money on a contractor every single time there's an issue.
It could also be beneficial to develop relationships with contractors who are willing to be your regular repair crew on whatever type of budget you have.
4. Know State Laws
Every state will handle rental regulations differently and this is something that you need to be aware of. Talking to other landlords from various states might confuse you so it's best to know which laws actually apply to you.
Be sure to go on your state's official website for landlord restrictions to research all that is required and expected of you. If there are ever any legal issues with a tenant then you can refer them directly to the page- as long as you are following proper protocol in the situation.
5. Consider a Property Manager
When it comes to maintaining a real estate property, the honest truth is that it might just become too overwhelming for one person. At this point, you should consider hiring a property manager to help you with keeping up with the location and dealing with tenants.
A property manager can handle small repairs (depending on their skills), tenant complaints and other issues that you might not have the time to make it to the property for. If you don't have a lot of money to dish out for this, a lot of people will typically exchange their services for a free place to live.
6. Offer Various Payment Options
As technology becomes more convenient so should you. Remember, you're operating as a business owner and when you walk into the supermarket, for example, they have multiple options for you to purchase your belongings. This same process should be available for tenants.
Make sure that giving money to you doesn't cause your renters to go over hurdles. The easier it is for people to pay you, the quicker you get your money typically. Consider offering online payment options for paying rent.
7. Enforce the Rules
Building relationships with your tenants is an important part of being a good landlord. However, just like a parent, you don't want to be too laid-back. Make sure that you have a set of rules that you notify your renters about and always enforce them.
For instance, you may require that tenants obtain rental insurance by a certain date of them moving in. If an emergency takes place where the insurance would have covered, the cost will probably fall back on you. Create boundaries so that you don't feel uncomfortable administering penalties when needed.
8. Organize a Paper Trail
One of the most important parts of being a first-time landlord is to keep all your documents as organized as possible. Even if you have to buy a separate file cabinet or store everything in a box of its own, do not lose track of vital paperwork.
9. Always Keep Your Word
Plenty of people have had issues with slumlords and, as a first-time landlord, this is not a reputation that you want to have. You can avoid being looked at in this way by simply keeping your word when you've promised to do something.
No matter how small you think an issue is, always handle it promptly because it's probably a big deal to your tenants. Being a person of your word and treating people kindly will help you to have a much more successful real estate career.
Looking to Become a First-Time Landlord
Becoming a first-time landlord is an amazing achievement that many people may avoid because it seems much more difficult than it could be. However, if you follow these tips given and always keep your integrity then you will start to see it paying off for you.
For more tips, tricks and advice on thriving as a landlord, check out the articles in the real estate section of our blog.
