4 Tips for First Time Landlords
Purchasing a rental property is a great way to increase your income. It is also more complex than many first-time landlords anticipate. There is more to being a landlord than simply finding tenants and collecting the monthly rent. Knowing what to expect from owning a rental property can be the first step towards success.
Becoming a landlord is not the type of business venture that should be attempted without the proper preparation. It requires research to help you set the correct rental rates, uncover tax responsibilities, and understand the legal implications of having a tenant. Everything from finding the right rental application to deciding whether to use a property management company should be given careful consideration before moving in as your first tenant. Let’s look at a few tips that will help first-time landlords to be successful.
As a property owner, you will be required to have the right insurance coverage, including a liability rider. However, to protect both you and your property, it’s a good idea to make renters insurance mandatory for any tenants. Before you hand over the keys to a new tenant, you should insist on having a copy of their renter’s policy in a file with their leasing information. A renter’s policy will cover any damage or loss to their possessions or injury to guests.
The search for the right tenants takes diligent research and time. As a landlord, you want to minimize the potential problems that may come to light with any tenant, including damage or non-payment. Take your time during the vetting process. It’s essential to thoroughly investigate each candidate before making a decision. Choose a rental application that provides you with sufficient detail to make an informed decision. Follow up with all details, including employment and personal references. You should also check out the credit and background criminal history of each of your tenancy candidates. Before making your final decision, schedule an in-person interview where you can get a feeling for your candidate.
As a landlord, you may be hesitant to allow your tenants to have pets. Pets are known to cause a large majority of the damage to a property during a tenancy. However, landlords that allow pets often have an easier time finding qualified candidates. If you decide to allow pets in your rental property, it’s essential to include a strict pet policy rider in your lease agreement. Your pet policy should outline the costs for damages, a pet deposit amount, and an understanding of how pet issues will be handled.
New landlords may think that once a new tenant has moved in, it will be the end of their work until it’s time to collect the rent. In reality, the life of a landlord has many responsibilities. Landlords receive multiple calls from their tenants to deal with various issues, including repairs, financial issues, or tenant disputes. For property owners that are tight on time, hiring a property management company may be a smart option. A rental management company will take care of all the daily tenant issues, find new applicants and collect the rent on your behalf.
Becoming a landlord can be an exciting opportunity to make money and provide a charming home for your tenants. Having realistic expectations about the amount of work involved can help you prepare for being a first-time landlord. Follow these tips to help you on your journey to becoming a successful landlord.
This article does not necessarily reflect the opinions of the editors or the management of EconoTimes