Renting out your house can be a lucrative venture and provide a stable passive income for you. But managing a rental property is far from simple. Landlords must take charge of property maintenance, rent collection, addressing tenant requests, property inspections, and even bookkeeping.
Doing all these things by yourself can be stressful, especially if you’re just getting started. Putting your home for rent for the first time can be a daunting and challenging process, but you can rest assured that the effort will be worth it.
To help you become a successful landlord, the experts at Action Properties, Inc. have written this article. Keep reading for the best tips and tricks every first-time landlord should know.
Understand Rental Laws
Rental agreements are protected by many regulations. As a landlord, it’s crucial that you understand your local landlord-tenant laws so you can abide by them.
This will not only help you build a better relationship with your tenants but can also help keep your investment protected. After all, breaking Fair Housing laws, safety regulations, and security deposit laws can lead to costly fines or even legal disputes.
Invest in the Right Property
If you’re thinking about purchasing an investment property, it’s important that you do proper research first. Not every property is suited to be a rental unit.
For instance, properties in bad condition or in unsafe neighborhoods are less likely to get you a good return on your investment since they’re not attractive to potential tenants.
Learn About Rental Property Marketing
The key to finding long-term tenants is an effective marketing campaign. Knowing how to successfully advertise your rental property cannot only help you fill your vacancies quickly but also find reliable tenants.
Luckily, you don’t have to be an expert marketer to rent out your home.
However, you must know how to write a good rental listing, invest in quality photography to showcase your property’s best attributes, and advertise your rental across a variety of mediums, from real estate listing websites to social media or your local newspaper.
Screen Tenants
Problematic tenants can cost you a lot of money in legal fees and repairs. Luckily, you can avoid many renter-related issues with an effective tenant screening process, which should include credit, employment status, background, and eviction history checks.
Whether you do the screening yourself or hire a professional, you will have a much better time as a landlord knowing that the people occupying your home are financially prepared and responsible.
If you’re allowing pets into your rental, you must screen them too! This will keep you and your property protected from liabilities.
Write a Solid Lease Agreement
There’s no better way to keep your investment safe than with a solid lease agreement. This simple document can help you avoid many misunderstandings and even legal disputes. When writing your rental agreement, it’s important that you:
- Outline the terms of the lease, including specifying the start date, tenancy length, and termination date.
- State the price of rent, as well as your late fee policies.
- Clearly explain your tenant’s responsibilities regarding property maintenance.
- Outline your policies for subletting, pets, and breaking the lease early.
- Be clear about the penalties for lease violations.
Document Everything
Keeping detailed documentation is crucial for landlords. Documenting the state of your property before and after a tenancy can help you avoid security deposit disputes.
Additionally, it’s important that you keep track of tenant requests, complaints, maintenance requests, mov-out and move-in inspections, and even tenants’ infractions. If there is ever a misunderstanding or even a legal dispute, you can rely on your records to show that you complied with your duties as a landlord.
Have a Good Bookkeeping Process
Renting out your house is a business, and should be treated as such. Landlords must keep detailed financial records of all their expenses and earnings.
Having good bookkeeping habits from the start can save you plenty of headaches in the long run. The good news is that there are many tools you can use to help you, from online rent collection platforms to financial tracking software.
Additionally, as a landlord, you must do your taxes every year. Taking a proactive approach and planning for taxes can go a long way in keeping your investment protected.
Get the Right Insurance
While it might seem like a big investment, purchasing insurance for your rental property is a must.
Renting out your home can be risky. Even with great tenants, your property is always at risk of property damage caused by natural disasters or hazards, or even theft. A good rental insurance policy can significantly reduce the costs associated with such emergencies.
Find Reliable Contractors
Unless you’re a seasoned handyman-turned-landlord, DIY repairs are never recommended for your rental property. Doing repairs by yourself can lead to bigger, more expensive repairs or even safety hazards, such as fires or faulty wires. It’s best to delegate such tasks to an expert.
As a landlord, it’s crucial that you have a reliable network of contractors and vendors, from handymen and electricians to exterminators. You never know when an emergency might come up. Ensure you have someone you can call at any time of the day to deal with an emergency issue.
Hire a Property Manager
Landlords have a myriad of jobs, and doing it all alone can quickly lead you to burnout. That’s why many landlords choose to work with a trusted property management company.
These professionals can help you with anything from picking the right investment property, marketing your rental, screening tenants, dealing with maintenance, and collecting rent. This way, you can enjoy all the benefits of owning a rental property without the hassle.
Bottom Line
Being a landlord is no easy job, but renting out a property for the first time can be especially difficult. Luckily, you can find success as a first-time landlord by understanding rental laws, picking the right tenants, having a good financial reporting process, and working with professionals when needed.
Are you ready to make the most out of your Silicon Valley rental? Contact Action Properties, Inc. today! Our team cannot only help you with the day-to-day operations of your rental but can also help you ensure you get the best return for your investment.
Disclaimer: This blog should not be used as a substitute for legal advice from a licensed attorney in your state. Laws change, and this post might not be updated at the time of your reading. Please contact us for any questions you have in regards to this content or any other aspect of your property management needs.