Valuable Tips for Being a Successful Landlord
Becoming a landlord represents a tremendous responsibility. In addition to screening potential tenants and tending to various maintenance tasks, you’ll be tasked with processing assorted complaints and requests from your renters. Needless to say, if you’ve never owned or managed a rental property, this is likely to be quite the adjustment. In the interest of smoothly transitioning into your new role and ensuring the long-term profitability of your rental, take the following pointers to heart.
Seek Out Rentals in Profitable Locales
When searching for profitable rental properties, many investors tend to prioritize location above all else – and frankly, there’s little mystery as to why. After all, when you consider that a small, amenity-light property in a locale with ample demand is likely to generate much higher returns than a spacious, amenity-rich property in a locale with waning demand, the importance with which investors regard location makes perfect sense. So, if you’re hoping to generate massive sums of passive income with your first rental, limit your options to properties found in profitable locations.
In the quest to determine a location’s overall profitability, research the area’s population size, rate of growth, local economy, median income, property values and rent prices. This information should provide you with a clear picture of how much demand for rentals exists within a certain locale and how much income you can expect a local investment property to generate.
Depending on where you live, purchasing a profitable rental may require you to branch out into other cities, townships or states. If you have any questions regarding the best cities to invest in real estate, reach out to a knowledgeable real estate investment company.
Treat Tenant Screening with Due Importance
Without tenants who are willing and able to dutifully pay their rent, you’re liable to have a difficult time generating healthy returns, regardless of how nice your rental is or where it’s located. Fortunately, you can significantly reduce your chances of taking on unreliable tenants by treating the screening process with due importance. Among other things, this means never adopting a “gut feeling” approach to prospective renters. Even if someone comes off as perfectly responsible and trustworthy in-person or over the phone, this should not be taken as an indication that a proper screening is unnecessary.
To form a solid picture of how dependable a rental applicant is, you’ll need to run a credit check and criminal background check, confirm their income situation and get in touch with any references they provide – all with the applicant’s permission, of course. When it comes to references, employers, coworkers and former landlords tend to be preferable to friends and family members, as they’re less likely to be biased. Additionally, since many landlords forgo contacting references, some applicants list them under the assumption that they won’t be reached out to. As such, taking the time to contact references can be an effective way to identify dishonest applicants.
If you lack the bandwidth or patience to screen tenants on your own, consider entrusting this task to a professional screening service. While this will cost you a bit of money, you may find it less bothersome and more efficient than personally carrying out the screening process.
Make Sure Your Tenants Can Reach You
No renter relishes forking over a sizable portion of their monthly income to a landlord who’s are perpetually uncommunicative. So, if you’re interested in keeping your renter retention rates high, make sure every tenant has a work number and email at which you can be reached during normal business hours. In addition, take care to provide renters with a number that should be used exclusively for after-hours emergencies. Furthermore, make a point of answering all voicemails, emails and text messages in the timeliest – and most courteous – manner possible.
If you’ve never owned or managed a rental property, finding yourself thrust into the role of landlord can be a bit overwhelming. Furthermore, the larger the property, the more effort you’ll need to put into maintaining it. While every first-time landlord is bound to hit a few snags, you can effectively reduce the number of problems you face by going in prepared. So, if you’re looking to ensure that your first foray into rental property ownership goes off without a hitch, put the advice outlined above to good use.
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