How to be a Landlord

Which is one of the easy ways to earn money, something that requires little effort? Among the options coming to your mind, “Being a Landlord” should be one. But it is easier said than done. To be a landlord, you need more than just financial resources; you need the know-how of all of it and a good level of managerial talent. The following are some useful tips that will set you on the path to becoming a successful landlord around.

Purchasing a rental property

Congratulations if you already have a property to rent, else it is natural to start your process with this step. You need to consider many factors before finalizing a rental property.

• The first thing to do is researching for an appropriate location. You can either hire a property manager or look for yourself, the aspects that will be important for tenants – walkability to school, office, entertainment options, nearness to a subway, metro or a bus stop, etc.

• Check the property taxes and average rent in the neighborhood. Check for future price changes for the property in that area.

• If the rental property is near to where you live, it will be easier and frequent for you to visit the place.

• After factoring all your total costs and the rental rates, in the end, your Return On Investment (ROI) should be at least in the positive.

Upgrade, but in limits

If you have bought a home that isn’t fit to live, renovate it up to standards to increase its market value. But don’t change it so much that your ROI will go in negative. Maintain the property in a habitable condition. The rules for that vary by state, but you ought to give a clean and safe home for the tenants. Typical things to look are the Plumbing fixtures, heating/cooling systems, and good working appliances.

Studying all the Laws

Go through the Landlord-Tenant Law comprehensively. There are rules and regulations of the Federal, state, and local levels. All these laws and rules are regarding anti-discrimination, habitability, giving notice, access to the property, security deposits, eviction process, etc.

The laws are in place to protect and also keep in check, both the parties. Perfecting all the laws will save you a lot of hassles of paperwork and litigation.

Searching for the Right Tenant

A good tenant can be the difference between a positive and negative cash flow. They can make life smooth or a nightmare for you, so choose your tenant carefully.

• Advertise your property in a clean and professional way. Take a photograph of each room, and one of the exterior. Make a good first impression to attract worthy clients.

• Put a “For Rent” sign outside the place, you never know that way you may get a good tenant.

• It’s not a good idea to rent to family or friends; you should never mix relations and business.

• Go through prospective offers in detail, either by yourself or with the help of a tenant screening service/software.

• Check for any criminal background, credit score, employment, eviction records, etc. and get copies of all their documents.

• Put up a realistic rent rate which is near to the average in the area, and which will be agreed upon by both the parties. Sit together and also finalize other aspects of the renting agreement like property maintenance, etc.

Write and Sign a Lease agreement

You can take the help of one of the many online services available for drafting a lease. Customize it as you both agreed upon and document it. The lease should include all aspects and possibilities, in case any party goes out of rules or any due date. Stay organized and keep a record of every document and activity you do.

The whole process can be overwhelming yet exciting, and once you tick all the boxes, you will be proud of yourself being a Landlord. It is just like opening a usual business; it is definitely not any “getting rich quick” scheme. So tackle it accordingly and study everything beforehand.