What if your dream job became a nightmare without warning?
Many people become landlords because they want to ditch the day job and work for themselves. However, the new gig can become a major headache if you don’t know what you are doing.
Fortunately, we’ve compiled some awesome tips for new landlords to follow. Keep reading to learn the top landlord tips!
In This Post:
1. All About Rent
Some people become landlords because they like to meet new people. And before long, you might start seeing your tenants as your friends instead of your customers.
However, you must always keep rental payments as the highest priority. If you let people fall behind on payments, then your entire business model may fall apart.
That means you must be willing to make hard decisions like evicting tenants who are not paying. And this can be both emotional and stressful as you hear about their life stories and why they are not paying.
Treating this as a business first takes time and practice. For more tips on dealing with difficult renters, it’s never too early to learn more.
2. Do Your Homework
Another aspect of running a business is complying with the law. And we’ll go ahead and tell you that this is more difficult than you might expect!
There are many different laws that you must be familiar with. And your business must be in compliance with local, state, and federal laws at all times.
This is why it’s important for you to do all of your legal homework well before you go into business for yourself. And to stay protected, consider purchasing landlord insurance to help deal with any problems that you cannot foresee.
3. Research Investors
You may have had enough capital to go into this business on your own. For everyone else, though, it’s important to team up with the right investors.
Unfortunately, it can be difficult to find the right investors. Some of them are so focused on profit that they may lead you into unethical and/or illegal business ventures!
Make sure you research potential investigators very thoroughly. And this research should include multiple face-to-face meetings before you sign any contracts.
Remember, you want to find someone who has the same goals and values that you have. This is the key to developing a real partnership that will last many years.
4. Take It Online
The first rule of business is to go where your customers are. And if you don’t already know, almost all of your customers are online!
It’s important that you list your available rentals online. Fortunately, there are many easy ways to do so.
You can start your own website, of course. And you may consider teaming up with local websites who promote rental listings on their own well-trafficked sites.
You can also advertise listings on social media. Doing so is free and makes it easy for interested people to either message you directly or share the listing with their friends.
5. Screen Those Tenants
We have no doubt you have always been a model tenant when you have rented property. However, there are some bad tenants out there, and you’ll want to avoid them!
One simple way to do this is to screen all applicants. And such screenings should look at multiple different factors.
First, you should run a credit check. Tenants who have had trouble paying back various lenders and creditors may have trouble paying rent when the time is due.
Also, research their past rental history. Make sure they have a record of on-time payments and no disruptive behavior that landed them on the tenant blacklist.
Finally, verify their current employment status. This helps ensure that they have a steady income and make enough money to afford the rental.
6. Know When to Outsource
New landlords quickly discover that the job is a balancing act. In order to maximize profit, you must be willing to do many tasks (such as basic repairs) on your own.
However, some jobs are such a headache that you’ll want someone else to deal with them. And that’s where a property manager comes in.
Such a person specializes in providing help with landlord duties. And they provide the first point of contact for annoyed tenants so that the tenants don’t contact you until they have cooled down.
Obviously, a permanent property manager cuts into your ongoing profits. But having someone else deal with the majority of tenant stress may end up being worth it!
7. Beware Pets
New landlords are happy to start setting their own rules. Take our advice, though, and forbid pets from inhabiting your properties.
There are many great pets and pet owners out there. However, it only takes one bad apple to ruin the bunch. Or in his case, to ruin your carpet!
You might think that taking a pet deposit will offset the amount of damage a cat or dog can do. However, a bad tenant’s pets can cause major damage that requires expensive and time-consuming renovations.
It’s possible to try to screen the good pet owners from the bad ones. But you’ll have fewer headaches if you forbid those pets entirely.
8. The Price Is Right
Earlier, we talked about the importance of focusing on rent. But have you considered what your rental prices will actually be?
If you set your price too high, you’ll drive off potential tenants and end up losing money. However, setting prices too low may mean you’re barely making a profit, and that was the whole point of being a landlord!
The simple solution is to research the fair market price for an area. Next, tally up all of the costs you must pay (such as house payments and HOA fees).
Once you have these two numbers, you can calculate a price that is fair to tenants and profitable to you!
Tips for New Landlords: The Bottom Line
Now you know the hottest tips for new landlords. But do you know how else to make money without a nine to five job?
We bring you the best tips and tricks for turning profits at home. To start making even more money, check out our list of the best side hustles you can do from home!