Rental homes are in high demand. In fact, more than 36 percent of households rent their homes and that number will likely only increase over the next few years.
If you’re thinking of becoming a landlord, now is the perfect time to get started. However, being a landlord involves more than just owning a house and renting it out.
You need to treat it like the business it is. Here are a few landlord tips to help you get started.
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1. Take Your Time Selecting Tenants
When you first become a landlord, finding tenants as quickly as possible seems like the best course of action. After all, you want someone to rent your property so you can start making money.
However, it’s always in your best interest to take your time screening tenants to make sure you find responsible people to live in your rental.
Run a credit score check on each applicant. People with high scores tend to have steady incomes and a proven history of paying bills on time. People with lower scores can be a risk as they may end up paying rent late or missing payments altogether. You can partner up with the digital tenant referencing provider to do screening tasks and background checks for you.
It’s also a good idea to make sure each prospective tenant has a reliable source of income. This can be through a regular job, freelance work, and even grants through universities and colleges.
If you’re careful and only choose responsible tenants who have the means to pay rent every month, you’ll have renters you can rely on.
2. Get Everything In Writing
Once you find the right tenants, you’ll need to draft a lease agreement for them to sign. Think of the lease agreement as a contract your tenants must agree to before they can move in.
This agreement should outline the types of things tenants can and can’t do on the property and stipulates consequences for late rent payments.
It is possible to find pre-written lease agreements. However, these agreements are very simplistic and may not cover all the things you want your tenants to agree to prior to moving in.
If possible, speak with an attorney and get them to help you customize your lease agreements. Once you have a version you’re happy with, you can use it for years to come and with any additional properties you acquire.
3. You’re Responsible for Repairs
Becoming a landlord means accepting responsibility for the maintenance and repair of any property you own. If your tenants report an issue with an appliance or notice something like a roof leak, it’s your responsibility to pay for the repairs.
This may sound like an annoyance, but it’s actually a good thing. When you’re responsible for maintenance and repairs, you’re in charge of which contractor you use.
This gives you the ability to choose service providers you trust rather than relying on whichever company your tenant could afford.
Keep in mind that your tenants are responsible for any maintenance issues caused by their own negligence. If they break something and the damage isn’t due to regular wear and tear, they can get billed for the cost of the replacement.
Just make sure you outline those details in your lease agreement.
4. Insurance Is a Must for Renters and Landlords
Unfortunately, your homeowner’s insurance won’t be enough to cover your rental property against damage or to protect you from lawsuits. The best thing you can do as soon as you become a landlord is to buy additional liability insurance and property insurance for your rentals.
Your personal insurance agent will be able to help you find the right policy to protect your interests.
You should also require your tenants to purchase a renters’ insurance policy before they sign the lease. This will protect you from liability if anything happens to your tenants’ belongings.
5. Set Competitive Rental Rates
Becoming a landlord is a great way to make money, but it doesn’t mean you’re free to set the rent at whatever price you feel is right. You need to do research to find out what similar homes are going for in your area.
If you set the rent at an overly high price, you’ll have a hard time attracting tenants. If you set it too low, you risk not making enough money to cover all the necessary expenses.
Price your rental at a rate that’s high enough to cover your additional costs easily, but not so high that tenants will want to look at a different property.
At the end of each lease term, reevaluate current rental rates and adjust yours accordingly.
6. Handle Evictions with Care
If you’re lucky, you’ll have tenants that make their rent payments on time and never violate the terms of their lease agreement. However, it’s highly unlikely that all of your tenants will be responsible and respectful over the years.
When tenants violate the terms of their lease, you’re entitled to evict them. This means ending their lease early and legally forcing them to move out of your property. When tenants violate the terms of their lease, you’re entitled to evict them. This means ending their lease early and legally forcing them to move out of your property by sending an eviction notice first.
The process is complex and getting tenants out of your rentals is difficult. Partner with a professional eviction services provider and let them help you through the process.
Reach out to them early on, even if you currently have responsible tenants. This way, you’ll know who to work with if you ever need help.
7. Market Available Properties Online
People rely on the internet for everything from stocking up on groceries to finding a new place to live.
The best way to find qualified tenants is to market your properties online. Take detailed photos of each rental and include them in your listing.
If your home has any features that set it apart from others on the market, list those in the rental description.
Follow These Landlord Tips Immediately
If you’re thinking of becoming a landlord or have just purchased your first rental property, make sure you follow these landlord tips from the beginning. This will help you find and keep tenants that will care about your property each time you lease it out.
Above all else, remember that being a landlord is a lot like being a small business owner. When you keep your tenants’ interests in mind and work to maintain your properties, you’ll be successful for years to come.
Looking for more helpful tips to help you be a better landlord? Check out our latest posts.