Being a landlord is not an easy job. It becomes even more difficult when you are just starting out because of your inexperience. If you are buying a rental income property, it is important to learn from the experience of others. We have compiled a guide based upon 8 principles that will help you in becoming a successful landlord.
Create a lease agreement that safeguards your interests
The lease agreement you sign with your tenants on rental property is the most important document that will protect your interests in case of a dispute or violation by a tenant. Instead of downloading a template or a generic from internet, it is better to pay a lawyer to draw up a custom lease agreement keeping in mind your specific requirements. Paying a lawyer, a little amount of money means you will have a perfect lease agreement with no mistakes and errors. Using a ready-made lease agreement to save money can prove costly later when you are dragged into a court of law by a tenant in case of a dispute.
Create a tenant screening process
You need to deploy a foolproof tenant screening system to make sure that only good quality tenants get entry in your property. This TSS should include a detailed questionnaire to get information about the financial, professional, and educational background of the applicant. Read the answers given by the applicant to decide whether he is fit to become a tenant in your property or not. Remember that you cannot discriminate based on region, color of skin, gender, or familial status among the applicants.
Set the rent right
If you are planning to attract many tenants to your property, it is very important to set the monthly rent right. Compare the rents being charged by other landlords having similar properties in your area. You can pose as a potential renter to know the real rents quoted by landlords in your area. Inability to set the right rent will lead to high vacancy rates and lower the profitability of your rental property.
Fix the security deposit
You need to ask for a security deposit from your tenants refundable when they leave your rental property. This security deposit safeguards your financial interests as you are entitled to use money from this deposit to pay for any damages caused by the tenants. It is also handy in case your tenant does not pay rent. This security deposit needs to be roughly equal to what other landlords are asking from tenants in your area. The lawyer who drafts your lease agreement can help you in setting the security deposit.
Make house laws
It is very important to set the rules of the house pertaining to activities, behavior, and proper care of your property. Make sure you hand over a copy of this document to each of your tenants at the time of singing of the lease agreement. Make it clear that you expect your tenants to follow the rules of the house.
Know about the best ways to advertise your property
It is very important to properly advertise your property to gain exposure among large number of your target group of tenants. There is fierce competition among landlords to get their share of the pie and you need to highlight the positive aspects of your property to attract large number of tenants. Internet and social media platforms must be sued aggressively as every potential renter looks at properties online these days.
Behave in a professional manner
You become a member of an elite group when you become a landlord. It is expected from you that you will behave in a polite and courteous manner. Learn to behave in a professional manner if you want to become a successful landlord.
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