6 Top Tips for First-Time Landlords
If you’re looking for a way to earn some extra money and you happen to own a property you are not currently using, why not rent it out? While this works great as a side income, it is not something that should be done without preparation. In case you’ve never played the role of a landlord before, here are some tips that should help you make the most of this opportunity.
Understand the Laws
Before you decide to put your property on the market, you need to do a lot of research to see what the laws and regulations in your state are when it comes to renting out spaces. Learn as much as you can and consult experts as well to ensure you are doing everything by the book. Landlords face legal consequences in case the property is not habitable and safe. Furthermore, a landlord should not discriminate against tenants as that can result in a lawsuit.
Prepare a Contract
To prevent any legal mishaps, you should contact a lawyer and work with them on drafting an agreement that will include all the conditions when it comes to the space you are renting. You, as a landlord, should specify what is prohibited on the property and what can result in lease termination. Having everything in writing will protect you from a legal standpoint so don’t neglect this vital step.
Improve the Property If Necessary
A little bit of market research can show you what is currently in demand and that can help you see whether your property will do well. If you notice there are some popular features your space does not have, you can work on adding them but keep in mind that you should not invest too much in this space. Instead of installing new floors, countertops and appliances, you should put that money into making sure everything is functional. For instance, check the property for mould and moisture, make sure it’s properly insulated and that all the appliances and faucets are in good shape. Additionally, look for a reliable repair service that is available 24/7.
Make Sure It’s Clean
In addition to the property being functional and having all the necessary amenities, it’s also important for it to be clean. So, once a tenant’s lease is up, make sure to prepare the space for the next renter. Check the property again to see whether any repairs need to be conducted. Clean all the appliances, vacuum the rooms and dust all surfaces. Wash the windows and wipe-down all wardrobe interiors. However, if you cannot dedicate enough time to this chore, you can also turn to professional move out cleaning services. These experts know what to pay attention to so that the space is spotless when the next tenant arrives.
Focus on the Rent
If the tenants are late with the rent, contact them immediately. If they notified you beforehand that they will not make the deadline, you should accommodate them; however, if they ignore all communication attempts, you should take action. This is your source of revenue and you should not take it lightly – you could be without the rent money for a few months. Contact a lawyer to see your legal options and start the eviction proceedings as soon as possible.
Screen the Applicants
To avoid situations like the one we mentioned above, it’s vital to screen your potential tenants. Run a background check and see how high their credit score is. Decide what the minimum score should be for you to select them. Do they have a steady job? Can you expect them to pay the rent on time? Check their history with renting. If they were evicted several times, they are probably not a good fit. Also, conduct a few interviews with the interested renters. A quick conversation can tell you whether they have a family or are single, whether they have pets (decide on your pet policy early on), if they smoke and so on. Based on this, you can make your decision much easier.
These six tips are just some of the essentials you should keep in mind as a first-time landlord. Additionally, don’t forget about landlord insurance which will cover your potential losses. So, if you have a property you can rent out, it’s never too late to start earning money this way.
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