Getting ready to become a new landlord? Then you can benefit from some solid advice for rental property owners. That’s because although being a landlord is associated with several benefits, you must devise a dominant strategy to unlock these benefits. The benefits of becoming a landlord include passive income generation, greater financial security, property value appreciation, and diversification of your assets. However, there may be obstacles in your path that could hinder the fruition of your plans. Sometimes we all wish someone had told us about something instead of learning from our mistakes. As a first-time landlord, there are also things that you can benefit from knowing ahead of time. With that in mind, here’s some brilliant advice for rental property owners to help you make the best investment possible.
Do Your Research
If you want to discover the best advice for rental property owners, your best bet is to do as much research as possible. Find out everything you need to know as a new landlord beginning with finding a suitable property. As with most property-buying situations, it’s about location, location, and location. For instance, if the property is near a university, it’s more likely to generate more income because you will have no shortage of student tenants. You also need to do research to determine the costs associated with being a landlord. Staying on top of your finances is important if you want to make money off your investment. Factor in associated costs, such as property maintenance, paying taxes, repair costs, etc.
It’s important to treat the property like the asset it is. If you want to make the most of the investment, then be prepared to dive into a deep hole of research where you familiarize yourself with all the aspects of being a new landlord. Do your research to determine the best rental price for your property. Too low, and you could be short-changing yourself, while rentals that are too high will put off tenants.
A costly mistake that some new landlords make is failing to understand the implications and responsibilities that come with owning and running a rental property. When you don’t handle your asset like a proper business asset, that means you might not benefit from its full value. In that case, your rental property won’t be as profitable as hoped. So, do your research before investing, set fair rental prices, and here’s one more important thing: Make sure you have at least a basic understanding of the rental laws in your area to ensure you stay compliant at all times.
Establish Good Relations With Tenants
Establishing a good relationship with your tenants shouldn’t be hard work if you try to find the right people from the start. The best advice for rental property owners that want to avoid tenant problems is to screen their tenants. Inviting the wrong tenants onto your property can cause many headaches and financial losses. Good tenants should be responsible for no behavioral problems or potential red flags. If you screen your tenants carefully, this helps you avoid troublemakers that refuse to pay rent on time and force you to evict them. When screening tenants, review and consider things like their credit score, employment history, and property record.
You should also perform background checks and ask tenants to provide you with several valid references. Be sure to follow up on the references provided. Additionally, prepare some questions that help you get to know potential tenants ahead of time. Ask the tenant if they are planning to have roommates, whether they have pets, their lifestyle habits, and the reason for leaving their previous rental. If you consider yourself an excellent judge of character, doing a mini-interview with prospective tenants might help you make a wise decision. Being proactive in this way is more profitable because turning over a rental unit costs money, especially if there’s a period where the unit remains vacant.
Once you have found the right tenant, get the rental contract in writing to protect you and your property. A written lease should clearly outline the terms of your relationship with your tenant and your agreement regarding rental payments, tenant responsibilities, rental deposits, and other pertinent issues. Keep in mind that it’s also your duty to be a good landlord if you want things to remain cordial with your tenant. Communicate with them and try to resolve disputes amicably. Most importantly, listen to their concerns and make sure you meet their needs as much as possible. For instance, if they make a special request, such as extra pipe storage, find out if you can accommodate their needs. Similarly, if they report issues like a flooded drain field, act quickly and hire a septic cleaner to address the problem.
Make Necessary Repairs
As a landlord, one of your most important responsibilities is staying on top of maintenance and repair issues. Common advice for rental property owners is to expect emergency repairs despite all the preventive measures. With emergency repairs, it’s important to act quickly before the problem becomes even more costly. Let’s say there’s a water leak in your rental property. Leaks are one of the most common repairs any property owner might encounter. If left unattended, leaks can cause expensive water damage and mold growth, resulting in disgruntled tenants. To help reduce unexpected issues, be sure to schedule routine inspections with a plumbing service. That way, you can quickly identify potential issues and have them fixed before things get out of hand.
Encourage your tenants to report any issues that may signal a need for repair services. For example, if your tenant notices that the water heater is not consistent, have them report the matter to you and then act quickly when they do. This is much better than waiting until the tenant calls you in a panic because there’s no hot water. Be prepared to cover expenses for repairs around the rental unit. Common repairs that landlords encounter include HVAC repairs, faulty pipes, clogs, roof repairs, overflowing toilets, and electrical repairs. These repairs are necessary if you want your tenants to get maximum functionality from your rental unit. Timely repairs also ensure your tenants enjoy the highest level of comfort, as with HVAC repairs.
Make sure you always find reputable professionals to handle the repair worker, whether you’re hiring a drain cleaning service, an HVAC technician, sealcoating services, or a roofing contractor. Using reputable professionals ensures quality work that lasts longer. Ask your tenants to work with you in keeping everything in good condition. Provide helpful suggestions, such as cleaning the unit regularly, switching off appliances before unplugging, and avoiding products that damage drains or the garbage disposal.
Ensure Your Property Is Safe
It’s important to ensure that your property is not only in the best condition possible but it’s safe for your tenants. The security and well-being of your tenants should be your top priority because it keeps them happy while protecting you from liability issues. The last thing you want is for your tenants to be constantly worried about the risk of criminals breaking in. Therefore, you should first determine what you need to do to provide secure premises. Perhaps you need to hire fence installation services to deter potential intruders. Or maybe you need to install deadbolts to secure all main entrances, upgrade window security, and add external lighting.
Another common complaint that you want to avoid is health and safety hazards. Problems like a pest infestation can prevent the property from being habitable, so act quickly whether you need to engage termite control services, rodent removal services, or exterminators. If you live in an area, that’s prone to natural disasters, then installing hurricane shutters could help. Your rental property can only be an excellent investment if you address security issues and keep it safe and well maintained. The best advice for rental property owners is to always live by the principle that prevention is better than cure.
Find the Right Insurance
A crucial consideration to make as a new landlord is making sure you protect your investment. That’s where landlord insurance comes in, and before you ask, yes, you need landlord insurance. While landlord insurance is not a legal requirement, it can be a lifesaver in case of damage and liability lawsuits. But first, what’s landlord insurance? This is property insurance specifically designed for people who own rental properties. Thus, it’s a different kettle of fish from renter’s insurance or homeowner’s insurance. It protects you against financial losses that occur because of lawsuits or property damage. Damages can refer to weather, fire, flood damage, or any other damage caused by natural disasters.
As mentioned, landlord insurance comes with liability protection that provides coverage for legal, medical, and other expenses related to an accident that’s your fault. As a first-time landlord, you’ll have more peace of mind from knowing you’re financially protected in case something goes wrong. For extra protection, consider a landlord umbrella policy for a rental property. Umbrella insurance takes over and provides extra coverage in case you’re financially liable for an amount that exceeds your policy’s liability limits. For landlord insurance, consider the unique needs of your rental unit. It’s also a good idea to speak to an expert and get advice for rental property owners interested in landlord insurance.
Consider Hiring a Property Manager
The good thing about hiring a property manager is they can provide you with helpful advice for rental property owners. This is especially true if you find a property manager with a lot of experience. As a new landlord, it might not be worth it to see if you can manage a property without help. Chances are, you have many other responsibilities in your life that require your attention, so trying to wear too many hats can quickly leave you overwhelmed. Remember, hiring a property manager doesn’t mean you lose control of your rental asset. Instead, you still have plenty of room to supervise your manager to ensure they are competent.
A quality property manager can make life easier for you. When you’re first embarking on your journey as a landlord, it will take time before you develop the skills needed to get the most out of your property. In the meantime, your property manager can do all the heavy lifting, so you don’t have to. They can help you advertise and prepare the property. They will give you a deeper understanding of the legal requirements and what to do to find quality tenants. You should delegate a reputable property manager to provide you with the smoothest possible experience as a new landlord. Expect them to take care of everything else associated with the duties of a landlord.
The list includes finding professional services, shopping around for quality appliances like water dispensers, doing monthly accounting and reporting, and marketing your property. They will determine accurate rental pricing and handle maintenance and repairs. All of this offers several benefits, like fewer legal issues, higher occupancy rates, higher tenant retention, and less stress and freedom.
When you’re a new landlord, many unknowns come into play. Hopefully, the information provided in this article has eliminated many of these unknowns for you. When it comes right down to it, it’s all about doing your research as much as possible. Reach out to other rental property owners in particular. Getting advice for rental property owners from like-minded individuals can make a vast difference to your future experience as a landlord. That said, keep in mind that your situation is still unique, so some of the advice you get might work for you, and some won’t. Being wise is knowing which advice for rental property owners applies to you and then implementing what you have learned accordingly. Mostly, if you’re proactive, financially savvy, tenant-friendly, and compliant with your rental rules and regulations, then you should be ready!