Being a landlord may be a hard job, but it’s worth all the effort. Whether you want to try it part-time or full-time, you will need to do your research. The job comes with a lot of plus points, but you can’t deny the fact that you will need to give as much as you expect to get in return. You can easily generate a stable income if you decide to become a landlord; however, being a landlord is a big responsibility; you will need to keep exploring your options, gain knowledge constantly, and commit to being a good landlord.
When entering a new business, you tend to make mistakes and learn from them. However, many mistakes are easily avoided if you do a bit of background research and learn from other people’s experiences. Here are a few tips that can help you avoid a few grave mistakes that can become a big hurdle in your dream of becoming an ideal landlord.
Give It A Long And Hard Thought:
Don’t leap into anything without thinking it through; this is the first rule of business. You can learn anything and everything, but that doesn’t mean it will work for you. So, before diving into real estate, plan and research for a while. This will help you see many things clearly. Think about your current workload, will you be able to manage both at the same time, do you have enough resources? Apart from that, how are you going to manage the rental property? Will you be able to hire a manager, or are you planning to do it all by yourself? Being a landlord is a full-time job; hence before committing yourself, make sure you understand the deal clearly.
The answer to these questions isn’t a guarantee that it will work for you, but these answers will help you shape how you want to take this leap, and it will pay off in the long run.
Research about the Market:
Being a landlord comes with a stable income and an easy way to earn extra cash, but make sure that you are well prepared for unpredicted stressful situations. The research and attention to detail will save you from many such situations. Start by researching the rental market in your estate. Check out the competition, their rate, and how they advertise their properties. Apart from that, start researching about what the average tenant is searching for, what upgrades do potential tenants look for in a rental, as well as what amenities and facilities will help you get the ideal tenant.
Researching the market and getting an insight into your competitors’ rates will help you set your rent price. Don’t or too high or even too low, try and keep equal or close to the market rate.
State Laws Regarding Rental Properties:
You know when you are a landlord, that’s not the only hat you wear, you need to be an economist and judge the demand and supply in your areas, you also need to study the country and state laws on a rental property, so you also double as a lawyer.
Don’t be scared; you don’t need to learn the laws by heart, but you will need to get legal advice time and again to stay stable on your feet. Reading up on some legislation's will help you get a clear picture of the duties and solutions of both parties. The landlord/tenant law will help you protect yourself as well as keep your tenants in line; it will also help you avoid some common law-suits. If you are unsure of anything, it would be best to get professional legal help.
Give It Importance:
Whether it’s your side business, or you, have just one rental property to deal with, treat it as your business and give it importance. This is the only way you can move forward with success. Treat is just like you treat your daily job, which will help you grow and expand your expertise. With time you can even quit your job and become a landlord full time, but for that, you will need to put extra effort into your real estate business. Stay professional, build a reputation, keep researching the market and stay polite. You will need to treat your tenants as your partners, not like your inferiors.
This may be your first gig but refrain from renting your property to the first person who comes through the door. Make a habit of screening your tenants, run a credit and background check, and check their rental history and job history. Call all the references they provide and also do a quick interview with your potential tenants. All this will help you learn details about their history and their personality, and your decision will become a lot easier after this. The process of screening enables you to protect your property from bad tenants and also to get you ideal ones who will stay with you for a longer period.
When interviewing, small talk will also help you gauge the personality of your potential tenant. Ask the following question, and you will know exactly who you are detailing with.
- Why did they move out of their previous apartment?
- Why did they like your property?
- What do they do on weekends?
- Do they have pets?
- Do friends come and stay at their rentals?
More than half of the renter’s pool is filled with people who own at least one pet. If you are thinking of renting out to people who haven’t any pets, we suggest you rethink and make your rental pet friendly. Add pet clauses in your rental agreement, have a separate pet security deposit, and demand a higher rental rate if you allow pets on your premises; these are all the plus points you can gain by allowing pets in your rental.
These tips will help you understand how becoming a landlord works and how much you will gain from it if you put in the effort and commitment.