Becoming a landlord is a great idea if you’re looking to generate passive income. However, being a landlord takes a lot of responsibility. Such as, you have to maintain the property and deal with tenant-related issues. We understand this process can be a bit overwhelming; therefore, we’ve compiled some tips for new landlords.
Some helpful advice can make the whole journey a bit easier! Let’s begin.
The following are some tips to follow if you’re new to being a landlord and want to keep things hassle-free.
Becoming a successful landlord begins with interacting with your tenants personally. You should handle things like a professional property manager to keep things fluid and effective. While having a positive attitude towards these individuals plays an essential role, you should hold firm ground when needed.
Moreover, you should ensure cordial, professional, and concise communication with your tenants regarding the property. There are a few lease technicalities that you should also consider. For example, collecting overdue rent, property checks, completing repair requests, and if necessary, eviction.
Finding a quality tenant is beneficial in the long run. One of the biggest mistakes new landlords make is renting the property out to anyone who shows interest. Your tenant will impact the neighborhood, your property, and its overall value. Therefore, it isn’t a decision to be taken lightly.
During your search, take your time and follow a strict screening process. You should look for someone with good credit, a clean record, and a steady job with sufficient income.
In addition, you should decide whether or not you’ll allow pets in your rental. Future tenants may have allergies and there’s always the possibility they may destroy your carpets or furniture.
Even as a landlord, you need to comply with the federal, state, and local housing laws. Otherwise, you could land yourself in legal trouble.
Unfortunately, some first-time landlords may not be aware of these laws and may make several offenses unknowingly. These offenses can turn into lawsuits and cost you thousands of dollars.
Therefore, you should research your state’s landlord-tenant laws before you start renting out your property. You can also refer to online sources, such as AAOA, to find out specific laws for your city/state.
As a landlord, you need to develop an in-depth lease agreement. The contract should state what the tenant is and isn’t allowed to do and what the penalty is when the lease is broken. It’s important to take the necessary time to cover all the bases. Failing to properly address something can land you in some hot water later on. Therefore, we suggest you formulate your lease with the help of a real estate attorney.
Your lease agreement should include:
So, from the time you purchase the property to the day your tenant moves in, you have a lot of work to do. You need to ensure your lease agreement is in-depth, research the landlord-tenant laws for your area, and implement a strict tenant screening process. These steps will require more effort on your end, but it’s better than running into issues down the road.