Being an independent landlord is challenging, especially when you are just starting. It gets a little overwhelming, from preparing the rental property to screening the best tenants in town.
You must feel like there’s too much on the plate, and one careless step can lead to losses in your rental property. And, it is true. You must understand that the key to a landlord’s success lies in their ability to rate their property well, maintain a successful relationship with their tenants, and provide value for the tenant’s money.
But don’t worry; we’ve got you covered. This article mentions some vital information that will help you set up your property rental and earn profits as a first-time landlord. So, let’s cut to the chase and read on!
1. Treat the Rental Property Like a Business
When we speak of treating your rental property as a business, we mean that you must maintain it and follow all the federal and state rules and laws. Every business requires an initial investment before it can start giving off benefits. Ensure you follow all the rules to avoid legal issues and problems that may hamper your rental property’s reputation.
Besides complying with laws, you must ensure that the property is well maintained and has all the features that would make the residents comfortable. Hire a professional cleaning company to spruce up the property and eliminate mold, mildew, dirty windows, mats, and more.
2. Use Technology to your Advantage
Speaking with the local brokers about your property is an old-age idea. Landlords use technology to rent their properties and manage further communication with tenants.
You can choose the best property management software for landlords to help you with everything. Such software and tools help landlords screen out the best tenants; you can chalk out your tenants by setting your requirement criterion. Moreover, many apps also allow you to send requests to people looking for a rental property to visit your home or give them a virtual tour. You can check their credibility and ensure they have a clear history with police clearance.
After you have them on board, you can enable in-app push notifications for rent reminders and give access to plumbers, electricians, and other essential services to make it easy for your tenants to resolve the issues. It will help you keep things under control, thus, increasing your chances of earning better profits.
3. Set a Reasonable Rent
We understand that setting the right rental price in your location can be challenging. There are many speculations regarding how to fix it right. Many landlords get aggressive and charge high fees, which leads to long-term vacancy, thus, reducing the credibility of your property.
According to a survey, landlords do not receive on-time payments when they have high rent. In simple words, you lose your chance of finding a reliable tenant if the rent is too low for your location and increase your chances of losing your monthly income if the rent is too high. Therefore, you should find a fair market price for effective ROI.
The best way to gauge the fair market price is to know your competitors and the rent range in your location for the property size. You can add or subtract the amount depending on the extras you offer. Next, many landlords follow the 2% rule, wherein the rent should be 1-2% of the real property’s value.
4. Get a Renter’s Insurance
Renter’s insurance is essential documentation for landlords. You must speak with your lawyer to sign the right renter’s insurance with your tenant. It will help you avoid litigation in case of theft or damage to your property or people living on it.
It is a small financial burden that the landlord and the renter can take off by paying it off monthly. It covers damages to your property due to fire, lightning, a frozen plumbing system, impact by a vehicle, and more. Connecting with legal professionals is essential because the renter insurance laws may differ depending on the local authorities and the state government.
Along with the rental insurance, you must also have a written rental agreement that should mention all the clauses. It would help if you got it made by a legal professional to ensure that it has all the proper provisions and says the essential pieces of information. The legal agreement is binding for the parties, thus, providing security on both ends.
Bottom Line
We hope the above-mentioned information helps you become a successful landlord. There are various things that you might have to do extra to get returns in the future. But, also understand that in the race to offer everything nice to your tenants, be aware of your rights as a landlord.
