Tuesday, March 28, 2017

5 Things You Should Know as a First-Time Landlord

It’s never been a better time to become a landlord than now. Rental rates are on the rise, people no longer strive to own property, and the real estate market keeps on getting stronger. 

As a smart and farseeing person, you might consider rental income as a good way of building wealth. While it is obviously a good decision, there are some facts you should learn first. 

1. Consider it a job, not a source of a passive income

If you have never been a landlord before, you are likely to think that your job will be limited to finding tenants, signing rental agreements, and receiving monthly payments on your bank account. 

It’s ok if you think this way because the majority of movies represent the process just like that. However, the cold truth is that it takes a lot of time, efforts, and money to rent your property out. 

No one argues that becoming a landlord can be a profitable move, but you should realize the amount of work involved. To avoid potential problems, you need to invest your time into tenants screening. 

Plus, you should be ready to make repairs when something gets broken. You need to respond to your tenant’s requests and make sure they are satisfied with their living conditions. You must be ready to receive calls from your tenants in the midnight because there is an emergency. 

Sometimes you need to worry about your tenants delaying their monthly rent or ignoring utility bills. The list is already long but not yet complete. 

2. You need to get some legal education

It’s easy to break the law when you don’t know it exists. Chances are that you prefer to avoid litigations, so you’d better learn the local laws that regulate relationships between landlords and tenants. 

The bad news is that these laws vary from state to state. The good one is that you can easily find them online.

As a landlord, you should know that preferring one tenant over another can be considered a discrimination if the two applicants are of different races. There is a Fair Housing Act designed to regulate such issues and ensure that everyone is treated equally. 

Plus, there are clear regulations regarding the way landlords should deal with security deposits. What’s more, you should always comply with housing safety codes. In other words, you’ve got a lot to learn.

3. Being a landlord is associated with some risks

Decided to become a landlord? Get ready for adventures. Some of them will be fun, but the majority will not. 

For instance, you should be ready to wake up in the morning and find out that a part of your house is damaged. Alternatively, you can learn that your tenants have not been paying utility bills for a while.

Before you become a landlord, you should be prepared for unexpected situations. What you need to understand is that even the most comprehensive tenant screening cannot save you from untidy and irresponsible people. 

The best solution here is to get ready for the worst, but hope for the best. 

4. Not all tenants are created equal

Yes, all people are different. You can rent out your apartment for years and have no problems at all. 

Or you can get dozens of major and minor issues during a short-term rental. It all depends on what people happen to live in your place. That is why tenants screening is so important. There are many guides on how to conduct it, but most of them agree upon the following:
  • Learn about your tenants’ current income
  • Research their employment history
  • If possible, get in touch with their previous landlords
  • Evaluate his credit score
  • Make sure there is nothing to worry about in terms of criminal background
Tenant screening may take some time, but the result is definitely worth it. The good news is that some of the checks can be done online. 

5. There are services that make things easier

As I mentioned in the previous paragraph, modern technologies can make landlord’s life easier. Now tenant screening can be done from your computer. 

The best property management services have already integrated tenant screening options into their online platforms. Thanks to such services, the process of tenant screening gets easier and faster. It’s never been a better time for becoming a landlord.

In fact, modern technologies have affected the world of property management in many different ways. Not only can you screen your tenants online, but you can also e-sign your rental agreements and collect monthly rents from the comfort of your home.

If you are reading this, chances are that your idea of becoming a landlord is serious. If this is so, then you should definitely give it a try. 

Remember to learn from your own mistakes and ask for professional advice in a moment of doubt. Becoming a landlord is way easier than becoming an astronaut, so leave your doubts behind and go for a new experience in your life. This one is going to make you money. 

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