Owning a rental property might sound like a ticket to a relaxed life as you wait for your passive income to accumulate in your bank account. However, it’s not as simple as that. There are, in fact, many things to know as well as responsibilities a landlord must fulfill to his tenants.
If you’re a first-time landlord, it’s essential to learn how to successfully manage your rental property. You want to retain your best tenants and encourage them to stay for the long term. This is how you can quickly gain back your ROI and expand your property portfolio in the process.
Here are some best tips for new landlords:
#1: Ensure you have a reserve fund.
Taking care of a rental property is never-ending. Avoid getting caught by surprise expenses and put away a reserve fund for any property maintenance expenses.
Your rental property should always be in excellent condition. This way, your tenants will not be inconvenienced and decide to rent somewhere else.
You also want to keep attracting new prospects, so there are shorter vacancies. A reserve fund means you are prepared for any emergencies that may come up. It makes you a reliable and committed landlord.
#2: Market strategically.
Marketing should be planned well. You can’t just advertise anywhere and post anything. You should study your target demographics and think about where they’re more likely to see the ads.
If you aim to target retirees, advertising in newspapers is a great way for them to see your advertisements. Also, take advantage of online marketing since it has a wider reach.
By doing this, you’d be able to acquire plenty of prospects to avoid the gap between tenants’ move out. Further, make your advertisements more attractive by posting high-quality images.
#3: Be responsive.
When marketing your property, take time to answer every inquiry, email and phone call. It’s frustrating to spot a rental unit you’re interested in, but there’s no feedback from the other end. Once you have renters, it’s also vital to attend to your tenants’ needs by promptly responding.
If there are property maintenance requests, renters will appreciate it when you conduct your repairs at the soonest time. This translates to less inconvenience and also highlights the way you value your tenants.
#4: Be well-versed with laws governing landlords and tenants.
Since you’re now a landlord, it will serve you well to learn about the different landlord-tenant laws. Violations equal to lawsuits and heavy penalties, both of which you want to avoid.
These are some laws you should brush up on or consult a lawyer to know more about:
· Eviction laws
· Rights and obligations of your tenants
· Tenant privacy
· Fair housing laws
· Landlord’s rights and obligations
· Non-refundable fees
· Pet deposits (if your state allows it)
#5: Prepare a well-written lease.
A lease is a binding contract and details the terms and conditions of the rental. It outlines both the responsibilities of the property owner and the renter. If there are any confusion or conflicts, it should be clear enough to be a source of solid reference.
The lease should determine whether or not a renter can perform some alterations to the unit or own a pet. It should also state the notice periods for violations, if subletting is allowed and the number of people permitted to live in the rental property.
#6: Act professionally.
As a landlord, present yourself well and act as a professional. It’s easy to follow the authority of someone if they behave and dress appropriately. Remember, you’re running a business and you represent the rental property.
If you become too friendly, some tenants might not respect your authority anymore. If there are brewing conflicts between tenants, refrain from choosing sides by staying fair and levelheaded. Be cordial and polite when communicating with your tenants at all times.
#7: Develop good communication skills.
Communication is very important and the landlord is often required to communicate with the tenants, vendors and contractors. Strive to be clear and be professional when engaging with them. Clear up misunderstandings when they occur and maintain good relationships since you’ll be dealing with them for the long-term as a landlord.
#8: Organize your bookkeeping system.
When you’re running a business, it’s essential to be on top of your financial documentation. Keep copies of the leasing agreement, as well as receipts of billing orders, expenses and rental payments. It’s the best way to keep track of the profitability of your rental business.
You can also gauge your returns. During tax season, your life will be easier since you have a record of everything.
#9: Have a property maintenance checklist.
Keeping your property in topnotch condition requires consistent and meticulous inspections. To be more efficient in ensuring that everything is tracked, prepare a checklist.
This way, you won’t forget the important details and can schedule roofing, heater and air conditioning unit maintenance, as well as basement and attic inspections.
#10: Choose your tenants well.
To make sure you pick a quality tenant, conduct a proper tenant screening process. Keep in mind some questions, such as:
- How much are they earning per month?
- Is their income sufficient to cover the monthly rent and leave leeway for their living expenses?
- Do they have a pet and how well do they take care of it?
Contact previous landlord references and ask how the applicant behaved as a tenant, as well as his reason for moving out. Check credit reports, bankruptcy files, eviction records and their criminal background record. It’s important to establish the true identity, financial capacity and behavior of the tenant without simply relying on first impressions.
Even if being a first-time landlord has its challenges, there’s no better teacher than experience. If you want to learn from the professionals first, contact Realty Management Associates, Inc. at (208) 377-8889 or visit their website https://www.rentalsinboise.com// for a free consultation. Established in 1980, they have expertise when it comes to property management.