FACT: As a new landlord, you want to turn your rental property into a successful source of income. But, the process can be daunting if you don’t have the right skills. In order to guarantee the rentability and profitability of your rental, you must learn how to work smarter in order to avoid common pitfalls. Our tips below will help you ensure you run a lucrative business.
1. Maximize Income Possibilities
As a landlord, you want to get the most you can for your rental and part of the process lies in attracting the deal tenant. Location is an important aspect of a rental, but you also need to be realistic about your property’s condition. Keep in mind that landlords can claim maintenance and repair costs on their properties, so find out what your ideal tenant is likely to want and invest in it. Even small changes in fixtures and decor can make a difference marketing your rental and how much you can charge for it.
2. Market your rental efficiently
Keep in mind that by spending time on advertising, you are increasing your chances to sell a qualified tenant on the property. Once you’ve defined your target market there are several routes you can take. You can start with newspaper ads and online services like Craigslist, Zillow, and Hotpads, use your Instagram account, or even create a website. Make sure your photos and videos highlight your rental’s most important features: views, appliances, flooring, and amenities. Also, consider rewarding referrals from friends and other landlords. If your time is limited, enlisting a rental agent is a great option. It will cost you, but it can save you a great deal of time in communicating with potential renters, home touring, and devising an adequate lease.
3. Screen tenants properly and fairly
Evictions are costly, your best way to avoid them is by finding a qualified tenant. Screen potential renters through a rental application, an interview, and current employment and previous landlord references. Run a criminal background and check their credit report and eviction history to further gauge how responsible they are likely to be. But, before you make your decision, become familiar with the Fair Housing Act, as it is the primary law protecting tenants against housing discrimination based on race, color, national origin, religion, sex, family status, or disability. To reduce possible complaints, have guidelines comply with applicable laws set before you begin screening, post them on your ads, and approve or deny your rental applications solely on the basis of your criteria.
4. Document everything
You must have your tenant sign Lease Agreement, which protects you in case of a dispute. You can find standard leases online and customize them, but make the time to learn about landlord-tenant laws. Leases can be overturned if they violate federal, state or local laws and regulations, so consider consulting with a specialized attorney. State your landlord rights on the lease, making the tenant aware that you can enter the property for maintenance on a notice and that you can evict them if they don’t comply with the lease.
5. Have a pet policy in place
If your new tenant is bringing pets into the equations, you have the right to charge an additional security deposit and advise them as to where the pet is allowed. Be aware that service animals are not considered pets and they are excluded from pet restrictions and rules, such as exclusions from common areas, an additional deposit, size, weight, or breed restrictions.
6. Make rent the priority
As a landlord, rent is your source of revenue. Consulting online rental services for current rates can help you ensure that you are charging the right value, based on a cost vs. revenue equation. Have a Renter’s Inspection Worksheet for tenants to fill out upon moving in and collect a security deposit to cover any possible damages and cleaning charges. Make sure you streamline your rent collection process by making it possible for them to pay online, on the same date every month. If your tenants stop paying rent and ignore your efforts to communicate with them, you need to start eviction proceedings.