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New Landlord Success Tips

Everything you need to know about getting started as a landlord.

 

There are many ways to become a landlord. The most common are investments, inheritance, and convenience.

 

Investment landlords purchased a property with the intention of renting it out for rental income. In most cases, they never intend to live at the property themselves.

 

Inheritance landlords typically receive a property as a gift or as part of an estate. Inherited properties may have already been a rental, or it may have been the primary residence of the original owner and that is now unoccupied and intended to be rented out.

 

Convenience landlords enter the rental game because renting out a property makes more sense than selling it. Convenience landlords typically had no intention of owning an investment property but suddenly find themselves considering rentals.  This tends to happen if a homeowner gets a new job opportunity but doesn’t want to/or can’t sell his current home so decides to rent it.

 

No matter how you entered the game, it is important to arm yourself with the knowledge of what it takes to manage a rental property.   This article reviews the most important steps you need to take to prepare yourself to be a new landlord.

 

Learn the laws. Familiarizing yourself with your federal, state and local landlord-tenant laws is one of the most important things you will need to do as a landlord. Rental laws dictate things like legal tenant screening practices, security codes that must be followed, rights of entry, how to issue notices, and what steps you can do if a tenant doesn’t pay rent one month (HINT - You can’t tell them to just move out! - See “What is a Legal Eviction Process” . Understanding the laws is the best security you can have to protect property, your rental income and yourself from a nasty lawsuit.

 

Inspect the property.  As a new homeowner should make sure to inspect the property immediately. Pay attention to the appliances, roofing, flooring, and any water damage. Equally important you need to prioritize routine inspections of the rental property. Every lease should start with a move-in inspection. Move-in inspections will document the condition of the property and help you determine how much, if any, of the security deposit will need to be kept at the end of tenancy.

 

You will also need to perform a move-out inspection at the end of the lease term. It is recommended to perform quarterly or semi-annual inspections of the property to stay on top of any maintenance that your renters might have overlooked.

 

Screen your tenants. You can’t let just anyone live in your rental property. You want someone with a steady job, qualifying income, good credit history, positive rental history and safe criminal record. You can find this information out about rental applicants by collecting a rental application that includes references, job and rental history and approves access to a credit and criminal background report. Make sure to revisit your landlord-tenant laws on legal screening criteria so you don’t violate any Federal Fair Housing Laws.

 

Get a legal Lease.  Check with your state for what type of lease agreement you can offer your renters. Your lease will include property rules and terms of tenancy and should outline details about rent payments and what will happen if any lease terms are broken. It is a good idea to have a landlord-tenant attorney to review your lease agreement before a tenant signs it to make sure it legally valid in your area.

 

Stick to the Lease Agreement. Make sure to follow the rules you outlined in your lease agreement. If your lease says rent is due on the 1st, but your tenant pays on the 3rd, follow the lease’s stipulation about late fees. Don’t be tempted to fall for a sob story about why rent was late. Your lease is your best protection to get paid on time and protect your investment.

 

Stay on top of maintenance. Give your tenants an easy way to report maintenance issues, like a tenant portal in your property management software. Any required repairs that get reported right away reduce the risk of costing you more in the future due to ignored maintenance. Responding to maintenance request in a timely manner will also strengthen your landlord-tenant relationship.

 

Keep a reserve fund.  Even with an eye on maintenance, sometimes big ticket items need to be replaced. Every landlord should have a good reserve fund to cover expensive repairs that is kept separate from your rental income and operating expenses.  You need to have enough money to cover the unexpected like broken appliances, property damage, maintenance emergencies, and vacancies.



Owning your first rental property is an exciting and daunting process. Lucky for you, there is a ton of free resources available online to help you get started.  Check out property management blogs and join online communities like Let’s Talk Property Management to get answers to all your questions and exchange advice with your peers.

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