First-time landlords should know they’re in for a whirlwind of experiences as they step into the real estate investing game. Becoming an owner of a rental property can be a very lucrative form of investing. If becoming a landlord is in your future, it’s important to know some things about the road you’re embarking on. This article is for those who are interested in the prospect of rental property ownership and want to know more before buying an investment property. Below are 5 tips for landlords renting property for the first time.
5. It Shouldn’t Be Viewed As A Hobby
Nothing worth doing is easy. Real estate investing is no different. If you’re becoming a landlord for the first time, you’ll have to take this venture seriously. It’s a business and should be treated as such. This means approaching it like a business and having a plan. What kind of return are you expecting from your investment? What renovations need to be done? How long will you hold the property? All of these should be answered before purchasing any property.
4. Your Property Will Not Be Filled With Tenants At All Times
Plan to see 10-11 months of payable rent from tenants every year and expect to cover the other month(s) yourself. This may come as a surprise, but it’s something every first-time landlord should know. This is a general rule of thumb, as every area is different with regards to vacancy rates. Don’t underestimate your costs, and always anticipate vacancies. If you can get year-long leases, this is preferable.
3. Getting Reliable Tenants Can Be Tough
Do not underestimate the value of good tenants; this is one of the most useful tips for landlords that we can offer. Tenants that keep your headaches to a minimum are very desirable. Hold on to tenants that pay on time, keep your property orderly and are nice people. Remember, you are in a business relationship with them, so treat is as such. Be respectful, but firm when it comes to things like late payments.
2. Understand Your Responsibilities As A Landlord
If your tenants call you at 3:00am because of a broken appliance, you have to be available to handle the emergency. Investopedia writes that it’s important to:
-Keep all common areas, such as hallways and stairways, in a safe and clean condition.
-Make sure structural elements (e.g., floors, walls, stairs, roofs) are safe and intact.
-Ensure that electrical; plumbing; heating, ventilation and air conditioning (HVAC); and sanitary systems are properly maintained…Read the full list here.
1. It May Be Best To Use A Property Management Company
If becoming a landlord seems overwhelming, then hiring a property management company may be the route you want to take with your property. By hiring a property management company, your total cost will go up (minimizing your cash return in the short term), however, a property management company may be better suited to deal with tenant issues. This saves you plenty of time in the long run. This is one of the most pivotal tips for landlords: you don’t have to do it all yourself.