Being a landlord can be personally rewarding and financially lucrative. You have an opportunity to provide quality housing to your renters while creating recurring income from your appreciating asset.
But being a landlord is also challenging. Not only are you responsible for the condition of the building, but you also need to understand how to build good relationships with your renters. And of course you also need the business sense to operate your rental properties profitably.
There’s a lot to juggle when you’re the owner of an income property. But with our quick landlord tips, you can set yourself up for success, whether you’re a first-time landlord or one with years of experience.
Here are our top 11 landlord tips.
1. Do your research on rent prices
Pricing your rental correctly will maximize your profitability, so it’s important to get your price just right. While you might want to consider your ongoing expenses in setting your rental rates, the main factor should be the going rates for other rentals in your area.
Checking the rental rates of properties comparable to your own will tell you how much renters are willing to pay for a property like yours. Find other rentals that are similar in terms of:
- Age, and
When you see how much these other units are renting for, you can set your rates accordingly. You want to price your unit competitively enough to generate interest among qualified renters without going unnecessarily low.
2. Require a rental application, credit check and tenant screening
Don’t let just anyone move into your property. Bad tenants can cause endless headaches in terms of late payments, complaints from neighbors, property damage and even necessary evictions. Good tenants, on the other hand, pay rent on time, get along with the neighbors, and take care of the property.
Make sure your renters are well-qualified by having all applicants complete a rental application that allows you to run a credit check, income verification and rental history check. Checking credit will allow you to see if the applicants have a history of paying debts on time. Verifying income through pay stubs or bank statements confirms that your tenants have enough income to afford the rent. And a quick check with your applicant’s current or previous landlords will tell you if they can be good renters.
3. Research the housing laws in your area
While there are several national housing laws, particularly when it comes to fair housing, most housing laws are governed locally by your city or state. As a landlord, it is your job to understand your local laws to make sure you’re operating within the legal system. Local laws govern important topics like:
- Tenant screenings,
- Property maintenance requirements,
- How to handle late payments,
- Rent increases, and
Check your local laws to make sure you understand them. This one landlord tip can potentially save you from an expensive lawsuit in the future.
4. Provide extra amenities and services to keep good residents
Amenities, like a community pool, fitness center, or playground, draw in new tenants and help you retain existing tenants. They can also help you command higher rental rates.
You may even have an opportunity to charge additional rental income for extra services [Link to make more off your rental blog when live]. Offering premium parking spaces or storage units for an additional rental fee can increase your profit margins. And, in many states, it’s common to charge pet rent for pets living on the property.
5. Have a well-written rental agreement
Your rental agreement [link to the rental agreement template blog when that is produced] documents the legal rights and responsibilities of both you and your renters. It protects both parties by clearly outlining expectations and confirming that both parties consent to the terms of the agreement. Review the agreement personally with your tenant before move-in to make sure everyone is on the same page.
Both parties can reference this document when issues arise. For example, what happens if the tenant pays rent late? Both parties should understand how a situation like this will be handled and should have a copy of the agreement to refer to.
6. Enforce the lease and rules
Strictly enforcing the terms of the lease serves two purposes:
- It sets a precedent for following the terms of the lease. If you fail to enforce a simple rule like quiet hours, renters might not expect you to enforce bigger issues like rent payment due dates.
- It protects against discrimination claims. Enforcing the rules for all tenants across the board shows that you do not provide preferential treatment to any tenant, which could be misconstrued as discriminatory against other tenants.
7. Require renter’s insurance (within legal limits)
Renter’s insurance offers financial protection to cover your renter’s belongings and the fixtures in their unit in the event of an accident (fire, flood, etc). Requiring renter’s insurance can minimize your liability as well.
Interestingly, renter’s insurance cannot be required in Oklahoma, and insurance rates can be capped in expensive cities with rent control measures, like San Francisco. This is another case where it’s important to know your local housing laws.
8. Perform routine maintenance
Routine maintenance is often overlooked by new landlords because of the expense; you’re basically paying money just to maintain the current condition with no noticeable improvement.
But routine maintenance is critically important for a few reasons. First, it prevents the inevitable deterioration in the condition of your property over time. You don’t want to wait until your building is visibly dingy before refreshing the paint, for example. Keeping the property looking sharp will also keep current renters happy and appeal to new renters. But perhaps more importantly, performing routine maintenance checks can help you catch minor issues before they become big, expensive problems.
9. Post apartment vacancies online
Today’s renters head straight to the Internet to find their new homes. Offline advertising is more expensive and has a smaller reach than online advertising. So invest some time in creating a compelling online listing, complete with appealing photos. This will help you find new renters in less time which will minimize your vacancy loss.
10. Keep written and digital records organized
Keeping your documentation organized will make your life much easier when it comes time to renew your leases, file your taxes, or approve expenses. And if you ever need to file an eviction or take a tenant to court (knock on wood), you’ll need documentation to support your case. So keep track of all your records, including:
- Leases and addenda,
- Expense receipts,
- Rent payments,
- Communication with renters, and
- Security deposits.
11. Always be professional
Being a landlord can be stressful, and you may get into sticky situations with tenants, vendors, or leasing agents. But it’s imperative that you maintain your professionalism. Not only does this reflect well on the integrity of yourself and your business, but it also leads to fewer bad reviews online, which can quickly sink your rental prospects.
Do you need some customized landlord tips? June Homes specializes in maximizing rental income for property owners, and we’re happy to review your rental property to provide a custom plan for you. Contact us today to see how we can transform your rental.