Owning and managing rental properties can be exhilarating. From working with tenants to keeping the landscape fresh and clean, there are numerous ways of managing a property that can bring joy and profitability to not only you but your tenants, as well. You will profit financially, while they will profit from the value added to each property you lease to them. Becoming a landlord is no small task, but it is highly rewarding. Here are a list of ways to prepare to become a landlord.
1) Live Near Your Properties
Make sure you live near the properties you are interested in. If you purchase and manage properties that are far away from you, you will have a more difficult time keeping up with maintenance and making sure the staff is doing things correctly. Make sure to check the property regularly for any needs it may have.
2) Know the Law
There are many laws governing landlords and tenants and they vary from state to state. According to Laura Agadoni from Trulia.com, “Most states have specific landlord-tenant provisions that cover issues such as security deposits, level of access to the property, and how much notice you need to give your tenants when you want them to leave. There also are federal laws you need to know, such as habitability and anti-discrimination laws.” Knowing the law will keep both yourself and your tenants safe and sound.
3) Research, Purchase, and Prepare a Property for Lease
Make sure to find a property that has inherent value, whether that value is in its ability to be renovated and used or move-in ready. Find out ways to research properties in my blog on real estate investment here.
4) Review Each Potential Tenant
Make sure to run a background check on each tenant, as well as check their credit score. You should not sign on a tenant based on these two factors alone. Get two character references and two previous rental references from each tenant. Interview the potential tenants, as well. These vetting tactics should help you to have a broader idea of who the tenant is and what they are about. You will have a better idea of if they will be caring tenants who treat your property with respect and pay rent on time.
5) Make Tenants Pay Rent
If you are too chummy with your tenants, they can start to be “flexible” with when they pay the rent. Instead of paying the rent on time, they may slide back a few weeks. It is important to A) keep a professional relationship with tenants and B) enforce tenants to pay rent on time. One can enforce timely payment by making tenants pay late fees.
6) Make Specific Leases
If you are going to have leases for each rental property, it is important to hire a lawyer who can create the language for your leases. This will keep you safe financially and legally in the event that a tenant takes legal action against you or you need to take legal action against him/her.
These are simple steps you can take to become a landlord that is fair and reasonable with tenants and profitable at the same time. They are logical steps that make sense in the process of managing and maintaining properties. Make sure to keep in mind that owning and leasing properties do not make your rich fast, but in the long haul, they will richly pay off.