Many people jump into the rental property market looking for a steady stream of income. Unfortunately, many do not realize that one of the best ways to ensure their investments produce the desired income requires them to be a good landlord. This requires finding good tenants, taking care of the property, taking care of any complaints or issues quickly.
Did you know that currently in the U.S. 36% of households are rental properties? This is the highest percentage since 1965 and is expected to continue increasing for the foreseeable future. This is an excellent time to invest in rental properties, but you have to do it the right way if you want to enjoy a sizeable return on your investment.
- Good Tenants Are Vital
If you are going to be a successful landlord, you need to take the extra time required to screen your tenants. These are the people who will be living in your rental properties and taking care of them for you. Finding quality tenants, you can count on to take care of your property and pay their rent on time every month is a vital part of realizing your dreams.
Run background checks, credit reports, employment history checks, and prior rental history. If a prospective tenant declines to allow you to run a background check, has prior evictions, or a history of late rent payments, these are all good indicators of someone you don’t want in your rental property.
- Know Your Local Laws
Be sure you are fully aware of all federal and local housing and rental laws. Be familiar with the Fair Housing Act, habitability laws, and federal, state, and local laws. The more you know, the less likely you are to run afoul of these laws.
- Regular Inspections Are Priceless
Move in and move out inspections are a priceless part of being a good landlord. The more of the small issues you take care of at these times, the less likely they are to become large ones. By performing these inspections, you may be able to charge the cost of repairs or replacements to the tenants who are moving out.
Establish seasonal or annual property inspections and put them in the lease. You can use checking the furnace as a reason to give the entire home a quick once over (do not pry). This could help you notice a small problem like cracks in the wall or holes in the carpets that indicate the need for repair and potentially the need to replace the tenants for damage.
- On Time Every Time
Although you must use your judgment regarding a tenant’s late payment, when you have a tenant who abuses this privilege, you aren’t going to be seeing a steady return on your investment. It is imperativethat you collect all rents and any other fees such as late fees, on time every time. Of course, on the other side of the coin, you can always give out rewards for paying their rents and any other fees on time. Consider using movie tickets or gift certificates for local restaurants.
There is so much to becominga good landlord that many try and fail. The reality is that you are only going to get out of your investment what you are willing to put into it. Being a good landlord is a lot of hard work, but the rewards are more than worth effort if you are trying to build a secure future for yourself and your family.