Assuming the role of a landlord can be tricky. This is why many real estate investors are afraid to manage their own real estate investments. But the good news is, you don’t necessarily need to be an expert before you can become a good and successful landlord. You may need more time, patience, and experience to understand the ins and outs of “landlording.” But you can always start with the basics.
To help you navigate your new role, here are some must-knows you can’t ignore.
You Need to Update Your Insurance Coverage
Now that you are a landlord, it only makes sense that you no longer rely on homeowner’s insurance. This is only good in covering the things inside your house, where you live, what structures are inside the property, and what liabilities are tied to the property. What you need is to invest in the right landlord insurance.
In the insurance world, insurance for landlords is often referred to as DP3 policy. This helps cover the basics like what a homeowner’s insurance would. But it offers additional coverage, such as the following.
Unoccupied space
It offers protection in case your unoccupied unit or space is damaged. Even if no one is occupying the unit and no one is around to report the issue, you can have that peace of mind knowing your investment is insured.
Fair Rental Value
This helps protect your rental income in case a unit is deemed unfit for occupation. You can still maintain a regular income stream even if you lost rent payments after your claim was accepted.
It is important to understand that there are things that your new policy won’t cover. This includes your tenant’s belongings and your property maintenance costs. You are to shoulder the maintenance of your property while your tenants will invest in their own renal insurance policy.
Determine a Reasonable Rent Amount
It is crucial that charge a decent amount of rent to your tenants. Putting it too low can help you attract more tenants while missing out on your potential profit. Price your rental for far too high and you can scare tenants away.
To determine how much you can set the rent amount, there are a few steps you can take.
- Check the rental value of similar properties in the area
- Research rental control laws where your property is located
- Factor in utilities
- Budget for maintenance and repairs
- Stay updated on the latest news in the local market
- Work with a local lawyer
- Determine the best ways to accept rent from tenants
Make the Property Move-in Ready
If you want quality tenants, then you need to invest in making the property move-in ready. Make sure you already invested in the necessary repairs. Ensure the property meets the health and safety requirements.
It is also crucial that you keep the units clean and organized. You don’t want any bad odors lingering in the air or even molds growing somewhere on the property. The last thing you need are pests making a home out of one of your rental units.
Staging your property can help make it more marketable to your target tenants. This can help boost the rental price of each unit. You can even give your future tenants an idea of how they can decorate and how much furniture they can invest in.
Aside from handing out flyers and posting posters showing your rental property is not up for lease, consider advertising this online. You can market our property on different social media platforms and in property listing sites and apps. Make sure you already have rental applications on hand to make tenant screening easier.
Screen Tenants Thoroughly
Screening potential tenants offers many benefits. You can increase your chances of finding a renter who pays on time, will respect your property and the other tenants, and won’t cause any trouble within your property. You can even give your existing tenants extra peace of mind knowing you do your part in protecting their rights and safety.
To screen tenants, you can consider the following steps:
- Have them fill out an application form containing all relevant questions
- Consider a background and credit check
- Call their former landlords and ask relevant questions
- Contact their current employer
- Set a personal interview with the tenant
Schedule Regular Maintenance and Repairs
You want to maintain a rental real estate investment in tip-top shape. So, make sure you create a regular property maintenance schedule and give each of your tenants a copy. This will give them enough time to prepare every time scheduled maintenance jobs are due.
Also, avoid delaying any maintenance or repair job. Make sure to tell your tenants to reports necessary repairs the soonest time possible, or they can be held responsible for the possible costs. Make sure to include such a clause in your lease or rental agreement.
Running and managing your own rental real estate is a tough business. It requires lots of legalities and hard work. You want to make sure you stay on top of your tasks so avoid complications and financial headaches. Knowing the basics is only the start of your journey as a landlord.
