It’s smart to invest in rental property, and you aren’t alone. Individual investors own 16.7 million properties. The industry calls these private owners “mom and pop” landlords. But don’t let this name fool you into thinking that becoming a landlord is easy.
As a new owner, there are several pitfalls that you can fall into. We’ve created this list of tips to help you set yourself up for success. With a little planning and diligence, you can make your new rental property profitable.
Have a Rock Solid Screening Process
You can eliminate a significant number of rental issues by setting a high standard for your property. This will eliminate those who are likely to cause problems once they’re in the unit.
You just need to be sure that the process you’ve put in place is legal. You cannot discriminate or use the following characteristics to choose your tenants.
- Familial status
- National origin
- Mental or physical disability
If you’re worried about following the laws for your state, it can help to hire a property management company. This will take the liability off of you while also leveraging their extensive experience in choosing an ideal tenant.
Make the Rental Collection Process Easy
One of the hardest parts about being a landlord is collecting rent. You can increase the number of on-time payments you receive by making the process as simple as possible. The first step is to set up an online payment system.
Then to make your system effective, require this type of payment in the lease. This will ensure the tenant uses your desired payment method.
Be careful of online rent collection services; many are less than reputable. Another option is to hire a property management service that collects the rent for you. They will already have an online payment system in place.
Create a Rock Solid Lease
Before you accept your first tenant, sit down with a real estate attorney and draft a lease. Do not download a generic lease from the internet. You need someone with knowledge of your local laws to draft a lease that includes terms specifically geared for your situation.
Regularly Inspect Your Property
Do not expect your property to manage itself. Do not depend on your tenant to inform you of maintenance needs and issues. You need to take an active role with regular inspections.
This is not to invade the privacy of your tenant. You’re only looking for maintenance needs or required repairs. If this sounds like a time-consuming activity, you’re right; it can be. Hiring a property manager can take this task off your plate. The property manager will have the experience required to know what to look for and common issues rental properties face.
Know and Follow Notice Laws
Every state has its own laws about how to give proper notice. You need to follow these laws, or you’ll face harsh consequences. There are several notices you should become familiar with:
- Late payment notice
- Fix a lease violation
- Termination of lease
- Offer of renewal
- Notice of non-renewal
- Rent increase
- Notice of intent to enter
- Notice of disposal of abandoned personal property
- Transfer of ownership
- Repairs, renovations, or outages
Effectively Manage Your New Rental Property
To ensure your rental success, you need to take the time to learn the local laws. Then invest in your property by maintaining or even improving upon it. This will ensure you don’t inadvertently incur high costs later on.
One way to take all of the pressure and headache away is to hire a property manager. You can leverage the manager’s knowledge and experience.
Contact our team today and find out how our property management services can help you.