Taking on the role of a landlord is a pretty daunting step to make. You’ve undoubtedly heard horror stories about how landlords get their property trashed, left vacant for months, and have to deal with more of a money-sink than a revenue maker. The horror stories aren’t unfounded, either. Plenty of landlords have had to deal with truly terrible situations. But that doesn’t mean that every landlord has to. To avoid playing the starring role in the next landlord cautionary tale, here are a few focuses you have to develop early.
Be selective right from the start
Nightmare tenants are probably the one warning that you’ve heard most about being a landlord. They can be some of the worst challenges to deal with, whether they’re not paying rent, causing property damage, or forcing you to go to court to kick them out. So, make sure you vet your tenants well in advance before you rent to them. Check their credit rating, ask for references from past landlords, and prioritize people who are clearly in need of a good home, like young families. We like to be sympathetic and give people the benefit of the doubt, but while you only have one property, you should guard it against bad tenants as best as you possibly can.
Know your go-to guys
Paying the mortgage on the home, tax, and other ownership fees is where the majority of your regular costs are going to come out. But unless you’re going for a triple-net property that passes all responsibilities to the tenant, you are also in charge of the repairs and maintenance regularly required. These can add up a lot over time and damage the home’s investment potential. How do you lower the costs of hiring plumbers, electricians, and other handymen? With sites like https://www.angieslist.com/, you can find tips on finding reputable services and start a long-term relationship with them. If you guarantee that you’ll go to them anytime one of your properties needs a fix, many are willing to lower their prices to take advantage of the long-term income. Of course, if you’re willing to do some DIY yourself, you can cut the costs of maintaining the property dramatically. But don’t commit yourself to that course if you’re not 100% sure you can handle it.
Get a helping hand
Some people prefer to treat properties as a low-stress, hands off passive approach to investment instead. It’s certainly possible to go down that route, as well. It might cost a little to partner up with companies like http://vpmpropertymanagement.com/ but you benefit not only from outsourcing a lot of the nitty-gritty details. You’re also partnering up with people well-versed in the world of rental properties. That means broader advertizing for your homes, a decrease in vacancy rates and turnover, and more. There are systems like using online rental payment software that can help you find a middle ground if you want your rental property to be less work, but still want to retain full control, too.
Know your boundaries
It’s not always the tenant that crosses the line and finds themselves on the wrong side of the agreement, either. Landlords, whether well-meaning or opportunistic, can make missteps that lead to legal costs and perhaps even fines. Make sure that you have someone versed in property rental law take a look over any contract your draft up for your tenants. Learn the Fair Housing laws and ensure you’re not putting yourself in a legally compromising position.
Rent is a priority, treat it that way
The rent is going to be the vast majority of any revenue made from a rental property if that wasn’t obvious enough. Occasionally, you’re going to deal with late payments from tenants and you might think it’s fine to accept it every now and then if they have a real justification for it. Indeed, if you have great, long-term tenants and they keep you abreast in advance, exercising a little kindness and giving them some wiggle room isn’t going to sink your investment opportunities. But don’t let your good heart get in the way of making a return on one of the biggest investments in your life. As http://www.landlordtalking.com/ states, minimizing late payments on rent is essential. This might include late payment fees, but you also need to consider the potential you might have to pair up with collections agencies and start choosing a better one, now.
Rental properties are about investment, and investments are all about mitigating risk. With the right systems in place, the right attention to detail when it comes to tenants, and a focus on the business side of things, you can turn the odds much more in your favor.
This is a collaborated post.