Congratulations—you’ve now decided to rent out your property! Being a landlord for the first time can be an exciting experience. If you successfully rent out your property, you’ll be able to pay off your property’s mortgage.
You’ll also earn equity and have a steady stream of income each month. However, being a landlord can also be a difficult task. You will inevitably encounter various challenges and make a few mistakes.
The good news is there are some things you can do to prepare for those challenges. Being prepared will help you protect your property and maximize your revenue. A successful landlord is continuously learning and adapting.
Let’s take a look at some useful tips to help you rent out your property.
1. Consider Your Rental Property as a Business
Even if your rental property is not your primary business, you need to invest time and attention in it. You need to treat your rental property as your business and a source of income.
To manage a good business, you need to prevent problems before they occur. One way to do this is to maintain your property well.
Before you rent out your property, you need to ensure that it’s a safe place in which to live by inspecting it. Be willing to spend money on maintenance and repairs. You can do the following things to ready your property:
- Have the smoke and carbon monoxide detectors checked.
- Make sure the vents are debris-free.
- Check that all the pipes are in good condition.
- Have a team of repairmen on call, especially when your tenant moves in.
2. Study the Fair Housing Laws
Not knowing the fair housing laws is a costly mistake for new landlords. These laws help protect tenants from housing discrimination.
Do your research on the different housing laws. You can also consult with a lawyer who specializes in landlord-tenant laws.
Landlords must comply with federal, state and local laws. By doing this, you’ll be able to keep your reputation and avoid future legal problems.
3. Set the Right Rental Price
One important step is to set the rental rate for your property. The rental price shouldn’t be too low or too high. Moreover, the amount shouldn’t be based on your idea or expenses.
To set the right rental price, you can research the rates of similar properties in your area. If you set a reasonable price, you’ll be able to rent out your property quickly.
4. Market Your Property Well
Post your listings online, as most potential tenants search for rental properties there. Make sure that your property listing is detailed and specific.
You must also upload high-quality photos of your property. Doing so will help potential tenants visualize your property and appreciate it more.
5. Screen Tenants Thoroughly
After advertising your property, you need to make sure to screen all potential tenants. This process will help you find a good and reliable tenant who will pay rent on time.
If your tenant doesn’t pay on time, your cash flow will be affected. Plus, evicting bad tenants can be very costly and time-consuming. Therefore, it’s important to take the time to carefully screen potential tenants.
Ask them basic questions about their work, income and reasons for moving. Check their eviction history, credit report and criminal record.
Include the contact information of past landlords in the tenant’s application form. Afterward, contact these landlords to know more about the tenant’s character and rental history.
6. Create a Lease Agreement
A lease agreement between you and your tenant will help protect your property and protect you legally.
It will also help prevent tenant-landlord disputes from happening. The lease agreement states the terms of the lease, as well as you and your tenant’s rights and responsibilities.
It’s important to make sure that the clauses of the agreement are aligned with state-specific laws. You can consult with a local lawyer to make sure all items included in the agreement are valid.
7. Make Sure to Enforce the Rules
It’s your responsibility as a landlord to enforce all the rules in the agreement.
One example is when your tenant fails to make rent on time. In this case, you need to impose a late fee. When your tenant stops paying rent for a greater period, you need to prepare for evictions.
If you’re too lenient and don’t enforce the rules, your business and monthly revenue will be affected.
8. Don’t Allow Pets
If you make your property pet-friendly, you will be able to attract a larger number of tenants. This is because the majority of tenants in the US own pets.
There are, however, also disadvantages to allowing tenants with pets. Some pets that are poorly trained or neglected can cause significant property damage.
Pets may damage floors, carpets and screens. The pet can also leave an unpleasant smell that will be hard to eliminate.
Before you allow tenants with pets, you need to consider all the pros and cons. If you decide to allow those who own pets, you need to mitigate the risks.
One way to do this is to require your tenant to give a “pet deposit.” This fee is similar to a security deposit and will cover all pet-related repairs and maintenance costs.
9. Make Sure Renovations are Profitable
Renovating your rental property will make it look more attractive for potential tenants. However, make sure that you spend money on renovations that would result in a higher rental rate.
Let’s say your property isn’t located in a posh neighborhood. It would be a mistake to spend money on marble countertops and a luxurious den because you can’t increase rent.
10. Require Tenant to Pay Online
It’s more convenient and secure for you and your tenant if he pays rent online. Your tenant will be encouraged to pay rent on time, which will mean regular income for you.
It’s also possible for your tenant to set up an automatic deduction of the rent. These are just some of the reasons you should require your tenant to pay rent online.
It can be very challenging to be a first-time landlord. However, if you prepare in advance and maintain the right attitude, you can overcome any challenges that come your way. You’ll also eventually gain more experience and wisdom to help you become successful.
If you have any further inquiries about managing a rental property, contact McCaw Property Management.