Having a passive source of income has become crucial in this extra-inflated economy. Hence, renting out property is a good move to earn some extra bucks. But is it that easier to execute than said?
Of course not.
Being a landlord comes with its own set of challenges and difficulties. Managing and going through all the crucial landlord tasks is hectic and chaotic. You need to follow certain tricks and tips to keep everything in shape.
This is the only guide you need right now to start with your landlord journey. The pointers mentioned in this guide will help you gain control and momentum in your rental property business.
Why Renting The Property Is A Bright Option
Renting a property can be the right option if you are looking for extra earnings. There are multiple advantages of it when you are looking to get the help of it. Let’s try to understand it here.
First, you do not have to spend money on maintenance. Before putting your property on rent, you hand it over to the tenant. Thereafter, the tenant will take care of your property.
Every property has its value of depreciation. If you do not own a property, then you are, in a way, misusing the life of it. So renting the property can be of a great advantage. Now, if a property remains under the tenants, it goes on to increase its value. It is because the tenants go to buy the property used for a while.
Setting The Right Rent
How much rent should I charge?
Is this the right amount or less?
Will I be able to attract new tenants with this rent?
These are some of the various queries that worry any seasoned or new investor alike.
Well, being a landlord is indeed a challenge to accomplish. But how to find out the best rental rates?
- Firstly, you need to do a quick skimming of your local market rates. Since you are in a competition, it makes sense and will help in renting your property quickly.
- Secondly, use online calculators and other tools to calculate the rent. Here, you can also go for the free rental appraisal available online.
- Thirdly, go through your finances. Your rental income should at least recover your debt if any. It can also vary depending on whether you are choosing your rental income as a main source or just a passive means of earning.
Pro Tip: Compare your income to the expenses. This way you will have a better picture of how the rent price affects your monthly revenue.
Screening The Property And The Tenants
Quality matters. Yes, it matters a lot.
The screening of the tenants helps in getting to know tenants if they will pay the rent on time along with taking proper care of the property.
Henceforth, do a thorough tenant screening and check:
- Their rental background
- Past records ( criminal history if any)
- Their credit score and employment history. This will predict if they will be able to pay rent on time
- Reference from past tenants and other potential tenants.
Remember a chat over the phone is not sufficient to trust someone with your rental property. Be serious about tenant screening and prepare your own satisfactory checklist.
Furthermore, having a thorough screening of your rental property before handing it over to other tenants is also a significant step. You must:
- Check for the necessary cleaning and renovations if required
- Give the appliances and furniture in good working condition
- Investigate for any buildup, pipes, or drainage damage
- Try making your premises pet-friendly
- Check for safety and security
- Check other minor to major maintenances and upgradations
Tenants are more attentive and choosy nowadays due to the increase in rental properties. It automatically magnifies their expectations. Hence, ensure that you deliver the best from your side.
Taking The Help Of Automation
Now, this is a fairly easy means to get through your landlord phase. There are many exemplary tools available in the market that help in reducing your workload and chaos. These tools can help in:
- Online rent payment and collection ( convenient and more secure). No more chasing and unnecessary door-knocking.
- Reminder for upcoming rent
- Payment of late fees
- Managing security deposits
Introducing automation in managing your rental property and tenants will do no harm. Instead, it’s a long-term and productive investment. So go for it without any second thought.
Following The Rules Along With the Documentation
A practical and professional approach to knowing city and state laws will help protect you from any liability. Prepare your documents according to them. Besides the law, there are some other formalities to complete before renting out your property. These are as follows:
- A rental application containing the name, age, current address, permanent address, contact address and income of the tenant
- Renter’s insurance to help avoid any litigation process
- A rental agreement stating all the terms and conditions of living with expectations and modes to communicate. It must be duly signed by both the parties involved
- Any concern regarding noise and other restrictions
Apart from the above rules and regulations, you can add more that suits your personal interests. But make sure the terms are pragmatic and convenient enough for your tenants.
Know Your Duties, Rights And Responsibilities
Being a landlord means you are under obligations to deliver certain things and do the necessary work involved. Hence, maintaining healthy communication with your tenants and keeping a stern eye on the property before and after renting is important.
There are times when things might not run as smoothly as they used to, but be patient in the process and respect the privacy of your tenants.
Renting can be beneficial only if you work on your drawbacks and any other potential pitfalls. The task may seem simple, but it is vital to consult the experts in this area. Know that you have a lot of agency and hold the power to make key changes and become a successful landlord.
Follow the tips mentioned above and get ready to boost your rental property business with maximized returns.