Finding and purchasing the right property is the very first step. Where many new landlords fall down is they purchase a property they like, rather than one that fits their business model and ideals.
A great property isn’t necessarily a great rental investment and just because you’ve fallen in love with it doesn’t mean it’ll earn enough rent to cover your costs. Before you buy, check on property websites to find the asking rents for similar properties of similar size no more than a quarter of a mile away.
Think about how much money you’ll have to spend on it and consider how the market in the area is going to act in the future
A little extra time when screening your tenant could save you from a whole world of grief down the line.
Bad tenants can cause expensive damage to your property, they could refuse to leave at the end of their tenancy, or always pay rent late.
Proper screening can help you avoid ‘nightmare tenants’.
Having a good tenant is a two-way street though. Being a good landlord and maintaining a good relationship with your tenants will help ensure the profitability of your property.
So, how do you screen for good tenants? How to Screen Tenants like a Boss
Related Articles: The Best Ways to Greet New Tenants
This is something that a lot of new landlords simply don’t consider. But when you are choosing the finishes for your property, you want to be smart about it. You want designs that are fairly neutral, that look good, won’t date poorly and most importantly you need them to last.
Carpet for example, whilst it can be fairly cheap, it is really easy to ruin. Stains rips, snags mean that they need to be replaced - sometimes between every tenant. This cost very quickly begins to add up.
For a little extra money you could purchase vinyl plank flooring. This not only looks better, but it’s easier to clean, more durable and longer-lasting. It’s worth some serious thinking about, and a little extra money could save you a lot in the long run.
Your lease outlines exactly what you expect from your tenant and what steps you can take if they fail to live up to your agreement. At a minimum a lease should include:
Another thing worth considering is building in something like a break clause, preferably after the six months. Whilst it may be tempting to lock them in for the full year if they turn out to be tenants from hell you may want to get rid of them sooner.
Even worse than a badly written lease is a verbal lease. This is normally only done if renting to friends or friends of friends, but a verbal lease is near impossible to enforce legally and you could find yourself in some serious trouble down the line if relationships between you and your tenant break down.
Allowing tenants to make the space more their own isn’t necessarily a bad thing, and in some scenarios could work out well for both parties. However, this needs to be managed. Your tenant needs to first get your permission. The scope of the work needs to be addressed very carefully and, importantly, you have to ensure that any work that gets done is of good quality.
They should use a contractor that you trust and know will do good work, and you should maintain control of the work at all times.
Too often, people investing in property get lazy. No source of income though is truly passive. The same is true for investments in property. It’s not just a case of purchasing a property and renting it out.
You need to find the ‘right’ property, you need to get a good deal on it, you need to organize any renovations before renting it. Then you need to advertise and find tenants. The tenants you then need to screenand make sure they aren’t going to cause you problems. Finally, you need to get Landlord insurance, run property inspections, gas, and electrical safety checks, scheduled maintenance and repairs, and file your taxes at the end of the year.
However, managed properly these tasks shouldn’t take a huge amount of time and the rewards more than justify the time spent. Understanding what you are getting into from the outset and being prepared to put in the work is vital if you want to succeed.
We mentioned getting insurance in the last point. There are various insurance providers for Landlord insurance. You will have to do some research to figure out how to get the best cost-efficient insurance for you and your property. Without a good insurance policy, if your tenants damage the property - or even hurt themselves on your property, you could be liable to a hefty lawsuit.
On top of this, we suggest that you ensure your tenants get renters insurance too. Your landlord insurance does not protect their belongings.
There is a new wave of real estate investors and landlords. The smart savvy ones who are taking back control of their properties to management companies.
By doing this they can maximize profits - and streamline their business. It allows them greater insight into the marketplace, reduces their risks, and saves them money.
Try Landlord Studio for Free now and unleash your investment potential! All the power of a professional property manager in the palm of your hand.
As the property owner, you’re responsible for non-compliance with snow removal ordinances, so it’s best if you make sure snow removal equipment is available. You may even find if you check the local bylaws that you are required to keep public thoroughfares that cross our property free from snow too...