Buying a property with the intention of generating rental income is often considered a good investment, but it is essential to remember that it is not guaranteed to be a slam-dunk success. Finding success in the rental market requires know-how and a can-do attitude, especially when it comes to finding and managing tenants.
Indeed, many new rental property owners are surprised at how much work is involved. While a rental income is more passive than full-time employment, it is never truly passive. It takes work. In this post, we will run through some tried-and-tested tips for first-time landlords, which should help ensure that your journey into the world of property rentals gets off on the right footing.
Put Together an Attention-Worthy Ad
The more time your property sits empty, the greater the financial implications. You cannot start generating income until the place has been rented, and you cannot rent the place until people are interested. You might be lucky enough to have a property that’s located in a high-demand area where rentals get snapped up in minutes, but more likely, you will need to work to drum up some interest.
The quality of your rental ad will play a huge role in determining the number of enquiries you receive. Rather than assuming that if the ad is online, people will pay attention, work on putting together an ad that demands people take notice. That means quality photographs, good descriptions, and straightforward contact information.
Screen Your Tenants
Your life as a landlord will be much, much easier if you have reliable, trustworthy tenants. The problem? While you can get a good feeling about a potential tenant, your intuition will not tell you everything. When there’s something on the line — a nice rental property, for instance — people will nearly always turn on the charm.
But that charm won’t tell the whole picture. You can get a fuller image by screening your potential tenants to get a better sense of who they are, any past rental troubles they may have had, and their employment. You don’t need to go full FBI to uncover every detail of their lives, but calling past landlords and checking with their employer that they are who they say they are might just save you a lot of headaches further down the line.
Put Together a Lease Agreement
Screening your tenants will go a long way towards ensuring that your tenants will look after your property. Putting together a lease agreement will protect you if they don’t. It’s one to tell tenants what they can and cannot do, but verbal agreements aren’t usually enforceable — lease agreements, on the other hand, are. Don’t worry if you are not a legal expert and don’t know where to start. An online lease agreement tool makes it as easy as possible to generate a legally binding lease that you can send to your tenants within minutes. Once they have signed it, you will have the peace of mind in knowing that your terms aren’t just suggestions; the tenant has to follow them or risk eviction.
Document the Current Condition
There will be things that you are responsible for maintaining and repairing, but there are also things that fall on the tenants’ shoulders. However, they are only responsible for those things if they happen while they are living there. If they existed before they moved in, then that’s on you. The problem is that your tenants might say that an issue was there when they arrived. While that might be true, it is better if you don’t have to just take their word for it. Documenting the condition of the property before they move in by taking photos and videos can give you a full picture of the condition without having to rely on memory.
Consider Landlord Insurance
You are not legally required to take out landlord insurance, but it can be helpful, especially for first-time landlords who are still finding their feet. It is a good way to have an additional piece of mind that your investment is safe and that you won’t have to suffer too many unexpected out-of-pocket expenses. The cost of landlord insurance varies, but it is generally quite affordable, and once you have it, you will find that you are protected against a whole range of potential issues, including damage or destruction, lost rental income during the repair process, and claims against you (for example, someone trips in your rental property and suffers an injury).
Accept That There Will Be Issues
You can hope that things will run smoothly throughout the entirety of your landlording journey, but life’s not like that. You will face issues. Perhaps something breaks unexpectedly, or your tenants run into temporary cash-flow problems and are unable to pay their rent on time. Understanding that these things happen will help to keep the stress levels in check. Of course, if issues happen repeatedly, then it will be important to take action, but if it’s just a temporary concern, then simply chalk it up to a learning experience and move on.
When to Get Help
As we said at the beginning of the article, many first-time landlords are often surprised by how much work is involved when they begin renting out property. There’s a longer list of essential tasks than you might think, and in some cases, the list might even become a little overwhelming. If you are struggling to keep up, then consider seeking help. There is a wide range of professionals who can make up for your (current) lack of experience and make sure that you are doing everything correctly, including accountants and property management companies (particularly recommended if you are managing multiple properties). If you need a little bit of guidance, then consider joining a local landlord association. They can be full of useful tips and advice.
Final words,
Becoming a landlord can be as rewarding as it is profitable, but it is not always a walk in the park, especially for new landlords who have to get up to speed as quickly as possible. Take the above tips on board, and you should find that things run much more smoothly.
