Are you just getting started out as a landlord? The rental property business is an exciting adventure, and now is a crucial time to make sure you’ll succeed. In order to thrive as a landlord, you’ll have to familiarize yourself with many aspects of the industry.
You’ll need to ensure your property is up to code and in great shape. You’ll have to promote your units both online and in the real world. You’re also responsible for screening and selecting tenants, and responding to their needs and concerns.
This article will provide you with a great jumping off point to prepare yourself to make a big splash in property investment. It’s important to set yourself up with a solid foundation to build your dreams upon.
Get the Rent Right
Charging the right amount for rent is a delicate balance. If you set your rents too high, your units may sit vacant. Experienced landlords know that there is no greater drain on their property investments than empty units. If you don’t have the regular income stream of rent flowing in each month, it can set off a negative chain reaction.
You also don’t want to undercharge. Undercharging on rent will result in your units being filled, without you maximizing the potential of your investment. You’ll still be responsible for the same general maintenance and upkeep, but without as much revenue to show for it.
That’s why you should conduct comparative market analysis before setting your rent prices. Once you have looked at other properties in the area, you’ll be able to determine what fair market value for yours is. Then you’ll know what you can reasonably charge.
Draft Detailed Leases
A lease agreement outlines the specific relationship between an owner and a tenant. A lease document describes the regulations and expectations an owner has for their renters, and vice versa. Good communication is the basis of any productive financial relationship, so it’s important for a lease to be clear and comprehensive.
A detailed lease should include:
- specific responsibilities of both the landlord and the renter
- policies for whether pets will be permitted
- conditions for smokers, and the consequences of breaking them
- the rent amount, as well as how it is to be paid and when
- the consequences of late or missed rent payments, including fees and other penalties
- lease renewal and termination conditions
- terms and conditions related to eviction
- clauses specific to local regulations, or the particular unit you’re renting out
A lease form should also clearly state who is responsible for fixing broken appliances, which is a common point of contention.
Be Both Firm and Flexible
Succeeding as a rental property investor is all about striking that golden balance between enforcing your terms and being receptive to change. You’ll need to be as comfortable serving a tenant a 3-day notice as with making new tenants feel welcome.
When you start out as a landlord, you’ll want to closely adhere to the terms set out in your leases. If you don’t show tenants that you’re serious about your conditions, they might take advantage of you.
However, with experience comes knowing when to cut your renters some slack. For example, you may decide to modify your pet policy after a tenant has proven their pet policy. Being lenient with tenants can earn their favor, encouraging them to stick around.
Add Some Personal Touches
Moving into a new home is always a major life event. When someone moves it is often because there has been a change in their life, such as a new job or a growing family. During major life events, our senses are heightened, which can lead to stronger memories.
That’s why when you are first interacting with a new tenant, it’s important to make an effort to make them feel comfortable and cared for. They’ll likely remember the consideration you showed for a long time.
A personal touch doesn’t need to be a grand gesture. Being there to give a new tenant their keys when it’s time for them to move in will help form a stronger personal connection than leaving the keys in a lockbox. You could leave some unexpected flowers for the tenant moves in, to provide a splash of color and instantly give the unit a feeling of home.
Learn Local Laws
When you’re a landlord, you’re responsible for knowing local landlord-tenant laws. These laws will dictate the rights of both you and your tenants, so familiarizing yourself with them will protect both you, your tenant, and your investment.
Some details that may be specific to your local jurisdiction include:
- when you can enter a tenant’s property, and how much notice you need to give
- what fees and penalties you can charge
- when inspections can be conducted
- what eviction protocol is
- your maintenance responsibilities
You’ll need to ensure any terms and regulations you decide upon adhere to the Fair Housing Act, or you could face legal troubles down the road.
Think About Hiring a Property Manager
Though rental property is a great investment and can be very rewarding, there are many challenges that new landlords face. After you’ve taken care of all the steps above, you may find yourself with less free time and more stress than you imagined when you decided to become a landlord.
Unexpected developments are always around the corner when you’re a landlord. An established property management company will have experience taking care of every aspect of helping a rental investment earn to its maximum potential. They’ll know how to get quality tenants and to maintain good relationships with them.
Cavalier Estates, LLC are a leader in the property management industry because of unwavering honesty and transparency with clients. Get in touch to see how we can put our simplified management plans to work for you and your real estate investment.