Purchasing your first rental property is a memorable achievement. It means finally fulfilling your dream of sitting back and generating some passive income. However, before spinning fantasies of spending your days at the beach while waiting for your bank account to grow with the extra income, you need to check in with reality.
Being a landlord is not an easy job. It comes with its own set of tough challenges. You need to be adaptable, responsible and knowledgeable about relevant laws. If your performance as a self-managing landlord is inadequate, you’ll soon find yourself with vacant rental property.
Here are some tips for new property owners to follow and become topnotch landlords:
#1: Be knowledgeable about landlord-tenant laws.
Since you’re now a self-managing landlord for your property, you must know your rights and obligations to the tenant. It’s critical to follow state laws and local regulations. Otherwise, your tenant can sue you, and you’ll be required to pay for penalties.
Here are some important definitions of which to be aware:
• Nonrefundable fees – this refers to fees that you’re permitted not to return to your tenant. Some states allow this while others don’t.
• Tenant’s rights and responsibilities – each tenant has basic renter’s rights and there are different terms for different states.
• Security deposit – different states have guidelines on the amount of security deposit a landlord can collect. There’s also a required period to follow when returning the security deposit to your tenant. Some states allow as long as 30 days while other states give less than a month.
• Landlord’s rights and responsibilities – the landlord also has his basic rights and obligations to the renter.
• Tenant privacy – tenants have a right to privacy. If a landlord wishes to enter the rental property, a notice is required. The period differs per state.
• Required landlord disclosures – landlords are mandated by the state to inform their renters of certain issues in the property, such as the presence of bed bugs or lead-based paint.
• State laws on property maintenance – states require landlords to keep the rental property clean, safe and habitable.
#2: Be firm with leasing terms.
As a first-time landlord, it’s easy to feel intimidated by your tenants. Some of them may even capitalize on your fear.
As a property owner, you have to be firm with the lease policies and terms. If your tenant has signed on the agreement that he must pay his rent every first of the month, he must stick to it.
If you allow payment delays, especially at the outset, your tenant may take advantage of you. Be firm and confident. If you let a renter stray from his responsibilities, you’ll suffer from income loss.
It will also become a habit in the tenant’s pattern of behavior once he can get away with it. If there are delays, impose late charges and collect them. If a tenant has been negligent and causes damages, he needs to shoulder the repair costs as well.
Remember to act with maturity and approach your client with respect. You’re not running a free retreat, and if you fail to collect, you’ll find yourself at the losing end.
Avoid being at the mercy of your tenant by going along with when he wants to pay. Set the tone of your landlord-tenant relationship at the start by expecting adherence to the leasing conditions.
#3: Conduct meticulous tenant screening.
When an interested prospect inquires about your rental property, it’s easy for first-time landlords to get excited. They immediately welcome the applicant without conducting a background check. The results can be disastrous, as the new tenant may have past issues.
Perhaps he’s been recently evicted, or he has plenty of debts. It’s hard judging people’s circumstances, but it’s also necessary to protect yourself and your rental business.
It’s good practice to request concrete proof of an applicant’s financial standing. Ask him for finance documents, such as pay stubs and bank statements.
You can also ask for previous landlord references. These will help you ascertain his suitability as a tenant and gauge his ability to pay the monthly rent.
You can also take it a step further to see if he has a criminal record. Some landlords have rented their units to criminals before without prior knowledge. It’s best to be aware and study the submitted documents for false information.
#4: Perform property maintenance.
State laws include property maintenance as a landlord’s responsibility. It’s also a crucial factor for customer retention.
If the tenants see that you take proper care of your property, they’re likely to renew their leases. Also, if you keep your rental unit in immaculate condition, its value will continue to rise each year.
Make it a routine to perform regular maintenance and inspections. For every season, make sure to reserve time to clean up.
For example, during autumn, leaves can gather and fall on the gutters. They may result in a blockage and lead to water damage. During winter, too much snow can also ruin the roof, so it’s practical to clear the accumulated snow. Clean spaces also make a property more attractive.
Another way to keep up the value of your rental home is to pay attention to the curb appeal. Consistently schedule mowing of the grass and trimming of the shrubs to enhance the beauty of your rental property.
#5: Hire a trusted property manager.
As a first-time landlord, you’re bound to commit plenty of mistakes. One of the best ways to avoid costly ones is to simply hire a property manager to oversee the operation. This lets you observe management practices and learn from professionals in the industry.
If you’re looking for full property management services, call House Match Real Estate Sales and Property Management. We can help you market your property, screen tenants, provide professional maintenance and install an advanced rent collection system. Feel free to contact us at (951) 225 -4020 or visit our website.