The rental market is booming, thanks to millennial renters who are staying at home longer and baby boomers who are bored of yard labor and property care. The rental industry, like any other company, has its ups and downs.
If you want to be a landlord, you need to prepare yourself by learning how to be a good one and how to stick around for the long haul.
Becoming a good landlord, on the other hand, requires a great deal of effort. So, if you’re wondering about how to be a landlord, you’ve come to the right place.
Continue reading for some sound advice from a landlord’s perspective. If you’re new to rental property ownership and maintenance, this might make things a bit easier for you.
How to Be a Landlord: Treat the Property as Your Own
It’s a good idea to communicate with your renters. And, manage your rental property as if you were a professional property management firm. This applies even if you’re a “mom and pop” real estate owner. You should speak with a renter in a transparent, courteous, and professional manner.
The renter must understand that the person in charge of the property (hint: it’s you) should be respected. Follow through on the lease’s requirements.
Such as collecting rental arrears, checking in on the property to verify it’s in good shape. You’ll want to have things fixed quickly following a request. And, if required, commencing the eviction process as soon as possible if payment isn’t made.
Adhere to a Stringent Screening Procedure
Choosing a good renter is one of the most difficult aspects of being a landlord.
Tenant screening is a difficult task. It’s probable that if your rental is priced competitively and in excellent shape, you’ll get a lot of attention from potential renters. Tenants who won’t qualify due to eviction history, poor income, or other criteria like having a pet will be weeded out by a well-thought-out screening procedure with specified parameters.
The renter should next fill out a formal rental application. Verify their rental history, as well as their earnings. Many landlords adhere to the “three times rent per month guideline,” which states that the renter must earn at least three times the monthly rental cost. Credit and background checks are routine in renting real estate, but they aren’t the only considerations.
If your screening procedure isn’t rigorous, it’s a red signal for tenants. You don’t want to convey the appearance that you’ll allow anybody to dwell in this building since this might lead to problems with tenants.
Obey and Follow the Laws
As a landlord, you have an obligation to obey fair housing laws. There are a lot of landlords out there that don’t know what’s required before renting a house.
It’s vital that you understand and abide by your state’s tenant-landlord standards if you want to avoid a lawsuit. With a little luck, the American Apartment Owners Association provides a map of the restrictions in your state that you may click on to learn more about them.
Have a Comprehensive and Well-Written Lease
As a landlord, your lease agreement is important. It’s a legally binding agreement that spells out what the landlord and renters can and can’t do, as well as what happens if the lease is breached. A two-page lease may suffice for the time being, but anything that was not adequately handled in the lease may later become an issue.
According to your state’s tenant-landlord rules, your lease should have fundamental terms, clauses, and wording, which may be created by a real estate professional.
Make Use of Software for Property Management
You are doing yourself and the renter a favor by not permitting online rent payments in today’s tech-savvy environment. Rent may be collected online and transferred directly into your bank account.
You won’t have to be concerned about bounced checks or cheques that go “missing” in the mail. Most online tenant management applications provide free automated bank-to-bank transfers (ACH) or levy a modest processing fee if the renter pays with a debit card.
There are a plethora of property management tools available that enable landlords to manage their rental properties remotely.
The systems may help you market the property for rent, collect late fines or deposit amounts, handle maintenance requests, and connect with the renter in addition to collecting rent online.
Also, you’ll want to check out these benefits before deciding to become a new landlord.
Send Out Reminders for Periodic Maintenance
Although your lease agreement may stipulate that the renter is responsible for basic maintenance such as replacing the air filter and monitoring the smoke alarm, a pleasant reminder never hurts. You may SMS them a reminder or send them a postcard or letter in the mail.
It may also be beneficial to offer the renter the necessary equipment, such as a year’s worth of new air filters, to guarantee that the property is kept up to your standards and expectations. It may be more expensive upfront. But, it’s far less expensive than replacing your air conditioning since it wasn’t properly maintained.
Increase Your Rental Fee on a Yearly Basis
New landlords are highly recommended to implement annual rental increases as part of owning rental property. If rental prices in your local market have risen since you leased the property, or if property taxes or insurance expenses have risen, you may be able to raise the rent by 5-10%.
Maintain in mind any local rent-control regulations and make an effort to keep the rise in line with the market. Just because you have the capacity to increase your rent does not mean you should. In order to maintain your rental rate competitively, you should aim to increase it every year, even if you have the same tenant.
Landlord Communication and Expectations: Explained
Investing in the real estate market is definitely the right decision for the majority of people. Yet, when it comes to the nuances of how to be a landlord, things can get a bit overwhelming.
Hopefully, our guide has shed some light on the main ways you can be a beloved landlord of the masses, and have potential tenants come over just because of your great reputation.
And, if you enjoyed reading our article, then you’ll love checking out our additional tips and tricks. All of them will be available in our real estate section.