Have you thought about becoming a landlord? You’re not alone! Today’s hot market has rents on the rise, which may have you wondering if it’s time to consider investing in a rental property and becoming a landlord. Who wouldn’t like the idea of cashing rent checks every month?
Knowing how to be a landlord and being a good landlord to your tenants are two different things. It takes work, and sometimes can feel like you’re putting out more than you’re bringing in.
Do you have what it takes? Read more on learning how to become a landlord that not only makes a profit but also keeps their tenants happy.
Can you afford it?
It’s all about balance. To be a successful landlord, you must ensure the money coming in covers what goes out. If not, you’ll be operating at a loss on your real estate.
Always prepare for the unexpected. Your rental may sit vacant occasionally awaiting tenants or it may require repairs. Make sure you have a decent financial cushion in case any of this occurs.
Choose the right property
Selection is key. Do you want a good cash flow or something with low maintenance? Do you want something located close to you? Ask yourself how far you are willing to go for this property.
Identify your primary goal. There are many components that go into selecting a rental property. Once a property is chosen, make sure it meets all applicable codes. You’ll want to assess your property to make sure it’s “rent worthy” for tenants.
Tenant Selection
Having good tenants can make or break your experience as a landlord. It’s important to interview and screen tenants thoroughly before offering them a lease.
Check their credit, income, rental history, etc. These steps are important to prevent the need for eviction later. It’s also important to have in writing and signed by the tenant a document stating the rent, when it’s due, and actions that could lead to late fees and eviction.
Be a landlord your tenants can trust
Happy tenants tend to stay put and pay rent. Be responsive and address concerns. Landlords are legally required to make repairs to their property, to an extent. The key is whether the issue affects a tenant’s habitability. If the electric, water, or air is out, it will generally be considered unhabitable and you’re responsible for fixing or finding an alternative.
But, if the problem doesn’t make living there unbearable and is merely cosmetic, there is no obligation to fix it. Listen to their concerns and address the problem how you see fit while abiding by your legal liability.
Understand your liability
You’ll need to be educated on local real estate and renting laws that pertain to your property, lease, and tenants. Make sure to always read and stay up to date.
Know your liabilities. You can be held liable for tenant injuries, so, seeking liability and landlord property insurance could work to your benefit. Check with an insurance agent to visit your options.
Weigh the pros and cons of a property manager
Do landlord responsibilities seem like a lot? Do you have what it takes? If it sounds like too much of a hassle, consider hiring a property manager. Property Managers handle all the details while saving you the headaches.
They handle tenant screenings, background checks, credit checks, rental history, taking security deposits, and dealing with day-to-day issues. All you do is sit back and receive rent payments.
Look at the pros and cons and determine what’s the right fit for you. Are you ready to take on being a landlord or would you rather pay a small fee to have a property manager take away all the headaches? The choice is yours!
