Owning a rental house is a dream for many. So, congratulations now that you have made it that far. Now, just like every other business, investing in a rental property comes with its own set of challenges and risks you ought to navigate. Below are a few essential tips that will help you through this new journey as a first-time landlord:
Get your Insurance Right
Protecting your investment property should be a priority, and a homeowner insurance policy is not enough. You will need landowner insurance in this. Landlord insurance will cover your property in the case of an unforeseen natural crisis such as fire outbreaks or any other damage to your property. A landlord insurance policy is also essential as it takes care of the tenants if they injure themselves on your property.
Remember to Screen your Potential Tenants
Having tenants is not the goal. You should ensure that you have reasonable and reliable tenants. The types of tenants you have will determine the success of your rental property. Good tenants will pay the rent on time and will handle your property with care. Bad tenants will cost you more than you make in your rentals. Some will delay paying their rent (or not pay at all) while some might cause damage to your property.
Before renting to a tenant, you should conduct a background check. Try to find out more about them. For example, find out if the potential tenant has a steady income, a good credit score, no history of eviction, and a good reference from their previous landlords, among other qualities. That said, some states have limitations on how much screening you can do for your tenants. Make sure you do your research before you get into the screening process. The screening will help you avoid eviction processes, as it is an expensive and time-consuming process.
Set the Right Rental Price
One of the best things about investments is that you have the freedom to determine the rates. However, you will need to be wise when it comes to setting rental rates. Make sure that the rent is not too high to scare off tenants, neither is it too low that you run at losses. When you price your rentals correctly, you will be able to get tenants faster.
Well, you can survey the properties nearby to be able to know the base rental price. The process may be overwhelming but you can find a reputable property management company equipped with the proper knowledge and experience to help. Yes, you don’t have to do it all on your own!
Reward your Good Tenants
Remember that not all landlords are privileged to have good tenants, and if you have some in your property, you should not take that for granted. Offering incentives to your good customers is a good way to show that you appreciate them. Offering upgrades in their houses is one of the best ways to reward them.
Have a Well-written Lease Plan
A lease agreement is a document that states the terms of the lease. Your lease will be legally binding between your tenants and you as a new landlord. The lease agreement should have the rights and responsibilities of both you and your tenants to avoid tenant-landlord disputes from happening. You must make sure that everything is stipulated and signed by a lawyer.
Being a new landlord will be exciting, but you make sure that you have all the facts at hand as you start the journey. Better even, seek professional help to avoid costly mistakes and increase your odds of getting returns on your investment. We hope that the tips above will be of help to you as you start this new journey as a landlord!