Are you torn between making a monthly rental or getting the proceeds from a sale? Should you find yourself interested in rental property to gain income; it is essential to follow specific guidelines so that your investment is a success. Finding the right tenant fit to rent your property can be quite a task.
Becoming a landlord is ultimately being a rental property manager, and it essential to know that success as a landlord does not come naturally. So as a rental agent this is a skill you have got to develop, and as you become a better manager, the property makes more money and your stress levels drop dramatically. So, if you cannot commit to becoming a great manager, then not do it, here are some trusted guidelines:
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1. Renting Out is a Business, Not a Hobby
Too many new landlords to jump into property management and try to figure things out as they go, but these are the people who end up in trouble with their tenants, their neighbours and their spouses. So, it is critical to commit to treat your rental property as a business, get the right forms, be professional, act like you are managing ten thousand units even if you are managing one.
This means being organized, developing systems and processes that guide your business and making sure that your bookkeeping is in order from day one. Also, if you are trying to sell tenant-occupied property, or are interested in buying or selling in general, visit webuycle.com as trusted professionals in the industry.
Source: Red Star Media
2. Avoiding Nightmare Tenants
If you want to avoid tenants who forget to pay rent, make the process as easy as possible for you and them. You may get tenants who damage your property and cost you a ton of money. To avoid this nightmare, follow a thorough screening process by doing a background check and looking into the history of the potential tenant. Having the wrong tenant can have major facing repairs, the time and effort it takes to find the right professionals who can repair damage caused by nightmare tenants.
Source: RentFax
3. Attract More Than One Tenant
There are a lot of possible tenants out there, some are good, and some are not so good; it is crucial that you only choose the good ones. You need to open up your funnel to as many interested people as possible. Think about it this way; if you list your property for rent and you only have two people involved, you are stuck between choosing one of them or waiting forever for someone else, in turn costing you time and money.
What if you had twenty interested parties? Now there is a lot higher chance that you will find someone incredible from that group. Try a lot of marketing tools to gain traction, put out a sign in the yard, take out a newspaper ad, put up a flyer at the grocery store and maybe even put an ad on Facebook. Ultimately, get the phone ringing and increase your chances of landing a great tenant.
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4. Have a Rock-Solid Lease Agreement
Sign a binding lease with your tenant as rules are there to protect everyone by ensuring you are on the same page. A contract is a legal document that explains all of the terms of the rental period as well as the rules and regulations that govern the relationship between the landlord and tenant.
This gives the landlord a powerful tool, something to rely on when making difficult decisions, and a solid lease can protect you from and the property legally in case something goes wrong. The lease will also specify issues like early termination of contract, living with pets, and problems involving general house and yard keeping. Also, keep in mind that real estate is highly localized, what might be required in one state might be illegal in another.
Source: J&Y Law Firm
5. Be Mindful of Fair Housing Laws
As a landlord, there are some things you can discriminate against and you should; like having an eviction record, being a smoker, or even owning an excessive number of pet friends. But other things like race, religion, sex, handicap disability or national origin, are substantial legal issues.
Different states have added other items of protective classes to the list, so be sure to do research and know your local laws. These laws extend beyond the leasing process and the tenant screening process, it can include advertising, preventing the landlord or property manager from marketing the property to a particular group of people.
The most common mistake that landlords make in their rental vacancy ads is calling a property family-friendly, remember familial status is one of those protected classes.
Source: Cozy
6. Avoid Renting Out to Friends and Family
Renting out your friends and family may happen because you do not want to go through the hassle of finding a tenant. After all, it is too much work, but you know a friend who needs a place to stay. Since you know them from before and they are not a stranger, you inherently trust them to take care of your property. Does that sound familiar? Well, it happens all too often.
Do not fall into this category! Never rent to family or friends, getting them out is always going to be very hard. Increasing your rental rate will always be hard as well. They will most likely pull the family or friend card on you to guilt-trip you into doing things they want. They may also not be looking after your property following your expectations and getting them to meet your expectations can be a touchy subject for you to bring up.
Even if you outline all of the terms of engagement in advance, the situation may get sticky in the future. Think of this as having the same feeling as if you were to lend money to a friend. It is awkward to ask for that money back when you need it, or worse yet, it affects the relationship.
