Are you planning on purchasing a home to use as a rental property but not sure what the best way is to go about managing it? Here are some tips for taking care of your property.
Treat Your Rental Properties Like A Business
A common mistake that new landlords make is taking things as they come and flying by the seat of their pants. Even if you just have one rental property, it is important to treat it like a business rather than a side business to make some extra money. This extends to everything, from having formal ways for tenants to communicate with you to having proper bookkeeping in place for your revenue and expenses. If not, you are going to eventually be in over your head and not know what to do.
Know That Higher-Quality Properties Attract Higher-Quality Tenants
Don't assume that you can do the bare minimum to get by with your rental property. If a landlord puts in the minimal amount of effort to care for a property that will be rented by another person, chances are that the property is going to attract a low-quality tenant or something that does not want to live there for a long time. Putting in the work to make the property nice is going to justify a higher rental price, attract a better tenant, and make them want to keep renewing their lease. Remember, each month that you go without a tenant between leases is lost revenue.
Screen For Great Tenants
A key element of finding a great tenant is going to be to properly screen them. Come up with income requirements so that you know that they are not spending too much of their monthly income on rent. Check out their references for previous rental history to make sure that they paid on time every month to previous landlords. You can even check their credit score to make sure they are not the kind of person that doesn't pay their bills or that has collection agencies out to get their money back.
Draft A Solid Lease
A key part of having a successful rental agreement is drafting a solid lease that your tenants have to sign. By having rules set in place for everything that can potentially go wrong during a lease, it helps give you a course of action that you can take to protect you from potential problems caused by your tenant.
Work with a property management company if you need assistance in managing your rental property.