5 Tips for First-Time Landlords
Buying property to let is a fantastic way to spend your money and secure an additional income stream. Your property should also (hopefully) increase in value over time, meaning you could make a decent profit when you come to sell it (if there are no mishaps or the market doesn’t crash).
There are loads of financial perks when it comes to renting out property – but becoming a landlord is no small commitment. It is a process to learn and master.
…and if you’re going to be successful at it, you should have a good idea of what it entails. This includes the time, funding, and resources necessary to run your business.
Tips For First Time Landlords
Upon speaking to a few good landlords over online forums, these are the five important tips which we came across.
Understand The Legal Requirements
First off – if you’re considering letting your first property, please do some research!
Especially on all the legal requirements. If required, you should also get help from a real estate lawyer to understand the nitty-gritty of landlord laws.
Afterall, you wouldn’t want legal problems later, when you are more than halfway down being a landlord. This can later create problems for you, and your tenants.
Therefore, your rental lease must comply with local, state and federal laws- not just one of them!
It cannot be something you just type. They must be for someone’s benefit.
Buying real estate has its laws, too, so make sure you learn about whatever city and state laws apply in your area beforehand. Also, remember that mortgages aren’t the same for properties that will generate revenue. Therefore, there is a need for more strict criteria with these types of mortgage agreements.
If you are taking out a mortgage on/for a profit-making property, tell the lender.
Plus, you will have to protect yourself from damage. Therefore, get yourself some good quality landlord insurance coverage. This will protect your pockets from damaged or stolen belongings as well as personal injury.
Did you know if your tenants are hurt because of your property damage, your tenants have the right to charge you with personal injury?
Yes, as a first-time landlord you have various obligations under landlord-tenant law (realtor.com). These include having to make repairs, so the house remains habitable, keeping common areas clean and safe, etc…
Look at this article thebalancesmb.com for more information on landlord obligations.
Write Detailed Property Listings
Your listings must include every detail. This is to ensure your potential renters know pretty much everything without even seeing it.
According to Investopedia, the best rental listing sites are Zillow Rental Manager, Avail, and Apartments.com.
Screen Potential Tenants Thoroughly
A bad tenant can ruin any property. They will simply pay you some compensation, receive an eviction, and leave. You will be left with all the liabilities. Afterall, it is your property at the end of the day.
Without even knowing, you will witness a pile worth thousand in default rent or costs of damages.
Therefore, choose your tenants wisely. Please conduct background/credit check(s) to see if they paid their last landlords on time(s) and whether there is a criminal history or a history of violence with landlords/neighbors.
Bad tenants are everywhere, so it is better to protect yourself from them.
Hire A Property Management Company
No matter how gifted you are in real estate, and how many books you read, you are likely to come across bottlenecks.
Getting anxious, and fearing the worst is common. Therefore, as a first-time landlord, you should always take help.
Consider hiring a fully-fledged property management company that takes control of the various aspects of renting. This means advertising, finding tenants, collecting payments, etc., and having little room for stress/hassle.
However, you shouldn’t completely give up control. Do find time to check their process and list and investigate red flags.
Taking assistance doesn’t mean you will not protect yourself against scammers.
To End the Discussion!
As a first-time landlord, getting a little nervous is inevitable.
However, learn the process well. Understand art and get help whenever necessary.
Most importantly, have confidence in yourself that you can do it!
Hopefully, the tips as a beginner were able to help you take your first step as a landlord.
If you have more tips to add to the list which can help our readers, please do so in the comment section below!
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