Being a landlord can be a rewarding experience, but it also comes with its own set of challenges. To be successful, it’s important to avoid common mistakes and follow best practices. Here are 10 tips to help you become a better landlord.
Before accepting rental applications, it’s crucial to understand fair housing and anti-discrimination laws. These laws ensure equal access to housing, and it’s illegal to discriminate against renters based on their race, color, religion, national origin, sex, familial status, or disability. Many local and state governments have additional protections, so make sure to familiarize yourself with them. A good rule of thumb is to focus on the property and amenities in your advertising and conversations, rather than on who you think the ideal tenant would be or features geared toward a specific group. Treat and communicate with every applicant and renter in the same way.
The three most important words in real estate are “location, location, location.” As a landlord, it’s essential to find a rental in a desirable area that can attract potential tenants. Don’t just go for the cheapest property available; get to know the neighborhood, including access to transportation, grocery stores, area features, and businesses. Research the local market, taxes, and rent prices, all of which affect the potential return on investment for your property and help you predict your monthly rental income.
Advertising your rental property may not be as exciting as advertising a hot new car, but it’s just as important. Feature high-quality photos of your rental, and consider hiring a professional photographer to take them during the spring and summer months when your property looks its best. Write a clear, accurate, and error-free description of the property and its amenities.
While speed is important in filling your vacancy, you still want to end up with a qualified renter. Create a documented process and criteria for finding, screening, and securing your tenants. Ask each potential renter to fill out an application, and verify their employment and residence history. It’s also a good idea to perform a tenant background check and run a tenant credit report.
A lease serves as a binding, legal agreement between you and the tenant, so it’s essential to make sure it thoroughly addresses the rules, policies, and conflict resolution procedures for living at your property. Clearly define tenant and landlord responsibilities, and put everything down in writing. A handshake or verbal agreement won’t hold up in court. Review the lease requirements specific to your state or municipality and incorporate them into your rental agreement. Have it examined by a legal professional to ensure that the terms protect your interests and comply with local and state regulations.
Securing a tenant for your property is a significant milestone, but your work is not done. As a landlord, it’s your job to meet your terms of the lease agreement: Check in with your tenants, stay aware of the condition of the property, complete regular preventative maintenance and seasonal maintenance, and respond quickly to requests. Make sure your property is a healthy and safe place to live, and keep up on your taxes and financial reporting. Neglecting your tenants and your property may result in higher turnover, more vacancies, less rental income, or even lawsuits.
Be prepared for the possibility that your property won’t always be occupied. If you aren’t able to fill a vacancy right away, do you have enough cash set aside to pay for the mortgage, utilities, and other maintenance costs? Maintaining a rental property comes with unforeseen expenses, such as damages and unexpected repairs, and the bills.
Maintaining your rental property is crucial to keeping your tenants happy and preserving the value of your investment. Neglecting maintenance and repairs can lead to bigger problems down the line, such as costly repairs or even legal issues. Stay on top of regular maintenance tasks, such as changing air filters and cleaning gutters, and address repairs promptly. It’s also a good idea to have a maintenance plan in place, whether you handle repairs yourself or hire a professional.
Every landlord knows that, regardless of diligent rental property maintenance, unexpected emergencies arise. Whether it’s unforeseen burst pipes or sudden power outages, being prepared is crucial. Establish a solid emergency plan and ensure your tenants are informed. They should know immediate steps to take and have access to crucial contact details, such as a trusted contractor or quick-response repair service. Additionally, investing in comprehensive rental property insurance coverage can be invaluable, offering peace of mind by covering emergency repair expenses.
In today’s fast-paced rental market, the on-demand onsite service from PortfolioBay stands out as a game-changer for landlords and property managers. By offering immediate, hassle-free solutions for emergencies or routine maintenance tasks, landlords no longer have to scramble to find reliable contractors at the last minute. PortfolioBay’s streamlined service connects property owners with trusted professionals in real-time, ensuring that any issue—be it a major emergency or a minor repair—is addressed promptly and efficiently. This not only saves landlords time and potential lost income but also enhances tenant satisfaction, knowing that their concerns are dealt with swiftly. Leveraging PortfolioBay’s on-demand service also underscores a landlord’s commitment to superior property management and tenant welfare.
Clear communication is key to a successful landlord-tenant relationship. Make sure you’re responsive to your tenants’ questions and concerns, and keep them informed about any changes that may affect them, such as rent increases or planned maintenance. Use a variety of communication methods, such as email, phone, or text, and make sure you’re available to your tenants when they need you. Effective communication can help build trust and lead to a more positive renting experience for both you and your tenants.
By avoiding these common mistakes and following these tips, you can become a successful landlord and enjoy the benefits of rental property ownership. Remember to treat your rental property as a business, stay organized, and prioritize the needs of your tenants. With the right approach, you can build a profitable and rewarding rental property portfolio.