5 Must-Know Tips for New Landlords
Deciding to rent out your home can be difficult at first. You may be out of doing it because you think it is too much effort. There are some truths to the rental nightmares that you've no doubt read about. These should be taken as a warning for your decisions from here on out.
If you are moving out of your current home and you don't want to sell it, the next best option is likely for you to rent it out. Being a landlord is not an effortless duty - but, if managed correctly, it can be a breeze.
Below are five things that every new landlord should be made aware of:
1. Get the Right Tenant
If you're not going to hire a property management team, you need to know that sourcing a tenant will be your responsibility - likewise, so will vetting one.
These days it is crazy to not vet your tenant beforehand, do a quick Google search for what you should ask from prospective tenants, and then put together your own rental application form.
That form should include credit checks, background checks, and employment checks. Also, do an affordability check and an interview.
2. Maintain the Exterior
If leasing out more than just one property in a new business venture, you should seriously consider hiring a property manager. They will handle all the maintenance issues and repairs and manage the rental collections.
If you happen to be leasing out an entire apartment block for the first time, make the effort to get the exterior refreshed and looking its best. That will help solidify your standing as a landlord, and get you a higher rental price per unit.
3. House Warranty Plans
Take out a decent house warranty on your property before you lease it out. These plans can cover just the basics, or you can get practically all aspects of the home covered. Remember that it is the tenants responsibility to replace something if they have broken it - but these policies help keep you from paying thousands of dollars to replace appliances.
Check out this review of American Home Shield to help you make your decision.
4. Separate Your Bank Accounts
Set up a separate bank account for the tenant to pay rent into every month. Your new account should be viewed as a savings account, if possible, and no debit orders should be linked to it.
Being a landlord might sound like free money, but there will likely come a time when you'll need that money for more important things. If you need to use that rental money to cover your expenses, then you may as well leave it going into your current bank account.
5. Take Action on Non-Payments
For the average household, rental payments make up the majority of their salaries. If a tenant defaults on a rental payment it will make it almost impossible for them to catch up on it.
Keep this in mind if your tenant ever defaults because you should then take immediate action.