Being a landlord can be incredibly rewarding. The better landlord you are, the better chance you have to attract and keep qualified and respectful tenants. For those of you who are ready to start building passive income, we’ve put together a few simple tips and reminders that will help you to become the best landlord on the block.
First off, becoming a landlord is the same as adding an additional job or responsibility to your plate and should be treated as such. You need to understand the fact that it could inconvenience you if something were to go wrong at the property at an unfortunate time. However, your tenants will rely on you to be a good landlord and to take care of issues in a timely manner.
As a landlord, you should take the time to screen your potential tenants to find the best match for you. Creating an online rental listing is an easy way to find tenants for your property. An informative listing with plenty of high-quality pictures can help you attract interest.
Applications should consist of a criminal record check and ask for references from past places that they have rented. When you are considering an applicant, instead of calling the last place they have lived (rented) try calling the second or third reference first. If they aren’t super great tenants, the current landlord might say anything positive just to get them out of their property.
Would you mind kids or animals living in your property? What about college students? These are all things to consider when you are looking for someone to occupy your space and thinking about your lease agreements. Once you have found the right match, you should advise them to get renters insurance. You should also walk them through every section and clause of the lease so that there are no questions. Although you hope to be friendly with your tenants, it is important to make sure the lease is enforced and apply penalties when necessary. If you let things slide at the beginning of your lease term, your tenants will be less inclined to strictly follow the agreements.
When you are looking for a property to invest in, it can be a good idea to connect with other residents in the neighborhood. Once you have tenants occupying the property, your neighbors can be a good resource to make sure everything is going smoothly while you are not there.
We recommend that landlords complete inspections once every few months. It is recommended that you be the one to change the air filter as a way to “inspect” the property. This gives you access to the property so you can see inside and make sure they are taking care of things. You could also consider having a service provider that you trust perform the inspection.
It is very important to maintain good report and customer service with your tenants. You should always notify them ahead of time of any maintenance work that might disturb them or interfere with their day. It is a good idea to let them know in writing in case there are ever issues. It is a good idea to continue to educate yourself on maintenance work so that you do not have to hire out for every job when something goes wrong.
You must be assertive, organized, and good with money and cash flow in order to be successful. You will be in charge of properly storing their security deposits and should be prepared to supply an itemized list of deductions once it is time to return the deposit.
If you are unable to fully commit to the hands-on responsibility and time to being a landlord, you might want to consider looking into a property manager. This is also something to look into if you are investing in another city that you are not able to travel to easily.
We recommend that you educate yourself on various landlord-tenant laws including the Fair Housing Act and Fair Credit Reporting Act. You should confirm if there are any landlord-tenant laws unique to your city that you should be aware of.
Still feeling uneducated? There are many resources and organizations out there to take advantage of. Groups like REIA, Landlord Association, and more could be a nice method for connections, resources, and other information that could help you. There are also many online communities, such as BiggerPockets, where you can ask and share advice with other landlords in your area. We recommend you become a member of our new Facebook group, The REI Locker, where you can network and engage with other Real Estate Investors.
Are you looking to get your feet wet in the world of “buying and holding” real estate? Check out our newest loan program, EasyRent, that is designed to help you as a landlord. Program terms consist of interest rates as low as 5.9%, 5 year interest only or 30 year amortization, and no junk fees. This offering is your chance to not only own one rental but to build your portfolio of rentals. You can finally begin your journey to achieving true financial independence and kiss your day job goodbye! You can view the full program terms here.