Being a landlord isn’t easy but if you can avoid the issues, be prepared, and be diligent, it can provide easy income for many years. Here are 10 lessons to guide you to success.
Lesson 1: Network With Other Landlords
Don’t learn lessons the hard way…by experiencing every issue yourself. Establish a network of landlords and share experiences. Learn from their mistakes and experiences.
Lesson 2: Shop Around for Mortgage Rates
Shop around different banks and compare the mortgage rates and look at different mortgage terms. Monitor them even after the purchase of a house in case the rates go down significantly. You may have the option to refinance for a lower rate and save money down the line.
Lesson 3: Be Organized
If you’re generally not the most organized person, find a way to change for the sake of your rental. Leases and all documents pertaining to the rental property should be in an easily accessible location (such as SnapRoof’s File Storage and Maintenance Tracker tools) in case you need to reference any documents. Keep copies of all rent notices and letters to the tenant. Your organization will pay off when your rental has an issue or you have a dispute with the tenant.
Lesson 4: Know Your House’s Value
Know the average rent and sale prices. Rationally and realistically, set your rental price based on how your place compares. This will allow you to come up with a ballpark number for the monthly rent and if you are selling your house, you will be familiar with the asking prices.
Lesson 5: Keep a List of Contacts
The list should include all the people from whom you may need help – from the real estate agent to the contractor to lawyers in case of evictions. It is best to have a contractor near your house, preferably within driving distance to your house in case of an emergency. If the contractor is good, keep using them; they’ll get to know your house…and that helps resolve issues quickly.
Lesson 6: Be Active
Visit the property and keep in touch with the tenants. They will notice that you care about the property and keeping a good relationship. Maintain the property; see the SnapRoof blog titled “Property Maintenance for Landlords” for a maintenance schedule. Make sure the monthly rent payment comes on time, and if the rent payment comes late, send a notice to the tenants and follow up. The mortgage payments should be paid on time. Be aware of any changes in tenant-landlord laws.
Lesson 7: Always Be Prepared
Problems with the house can arise at any moment so landlords have to be prepared for anything at any time. Be organized, have your contacts list, and know how your property works (plumbing system, heating system, etc.)
Lesson 8: Inspect the House
When the tenants move out, do a thorough inspection to access any damages before returning the security deposit. Do a complete run through; make sure you have a check list. (If you need one, SnapRoof provides a free checklist in the Lease Documents. Sign in to view it.) If there are any damages take pictures and consider taking the cost of repairs off the security deposit.
Lesson 9: Screen Tenants Thoroughly
Use SnapRoof’s Tenant Applications and Tenant Screening tools to accept applications, review applicants’ credit histories, and check income eligibility. Screen tenants very carefully and make sure they fit the requirements. It is important to do a lot of work upfront because the extra checks can prevent many headaches and problems down the line.
Lesson 10: Write Everything in Lease
A lease is a legally binding document and all terms should be defined clearly. Use SnapRoof’s Lease Documents feature to create a lease that suites your specific needs. When there is a dispute, the lease will be the governing document that guides the resolution.