Is 2020 the year you’ve decided to rent your vacant property or buy an investment property? If you’ve got dreams of bringing in a second income and investing in your retirement as a landlord, you don’t know what you don’t know (yet). Here are nine tips for new landlords you need to keep in mind.
Screen Your Tenants
You need to know more about a tenant than their first name. Background and credit checks will give you an idea about how well they’ll likely pay. References offer an insight into who they are as a former renter. Skipping this leads to destroyed homes, thousands of dollars in lost rent and legal fees, and a huge headache for you.
Get a Good Lease Agreement
Buying your lease off the shelf in an office supply store isn’t illegal but it’s not a good idea, either. Work with a property manager or an attorney to write a lease that clearly lays out your rules and policies, including what tenants can and can’t do. A generic lease won’t list the things that matter most to you. And once you both sign the lease, you’re bound by whatever is in it.
Know the Market
Are rent prices going up or down? Is there a shortage of rentals or tenants, or a shortage of investment properties available to buy? What rates work in a specific neighborhood? This is all information you need to know before you market a rental or set a monthly amount. Price yourself too high and the property sits vacant. Too low, and you don’t make the money you could.
Over Budget for Repairs
As a landlord, you’re going to make repairs. There is no getting around that fact. Some will be small fixes that take a few minutes and little expense. Others will be major expenses that cause potential damage and only seem to happen in the middle of the night. As you’re budgeting for the year ahead, pad your budget for repairs to make sure you have enough.
Check Your Insurance
If you’re renting a former primary residence, your old homeowner’s policy won’t do. Work with a good insurance company to make sure you have the right kind of insurance and enough of it. As a landlord you’ll be responsible for the dwelling but not the contents. You can make renter’s insurance a condition of renting your property so their belongings are protected in a disaster, too.
Decide Your Pet Policy Now
Allowing pets is sometimes seen as a plus to renter’s. They’re willing to pay a little more or an extra fee to have a pet. But pets are also a huge expense due to damage, smells, and other potential problems. It’s completely up to you what your pet policy is. It’s better to decide now before you’re working with a tenant instead of when they show up with a cute puppy you don’t want to say no to.
Familiarize Yourself with Landlord/Tenant Laws
No one expects you to go to law school and learn every detail of Florida landlord/tenant laws or the federal and local laws. But you are responsible for following them. Break a law and you can lose everything. You need to know your basic responsibilities and have good resources, like an attorney or property management company, who can help you stay on the right side of the law.
Make Rent Payment Easy
You want your rent to get paid on time, every time. The best way to do that is to make the process as easy as possible. Online rent collection is extremely popular with tenants and can reduce late payments. You can find, research, and hire a payment processor or you can work with a property management company that offers online payments. Either way, make everyone’s life easier (including yours) by offering a payment solution that doesn’t involve mailing a check.
Work with a Property Manager
Being a landlord might seem as simple as letting someone move into a property and collecting rent from them each month, but there’s much more to it. Between background checks, marketing the property, collecting rent, and evicting someone who won’t pay, there are a lot of moving parts you have to keep up with. If it sounds overwhelming, take help from a credible property management company who can help with as little or as much of the process as you want.
At ERA American Real Estate, we can help you rent one property or a dozen, all with good screening practices, easy rent collection, vendors for repairs, great lease agreements, and the knowledge to keep you from getting into trouble. If becoming a landlord is your goal for 2018, give us a call and find out how we can help.