As a first-time landlord, you want to get organized from the beginning to make your life easier. Once you’ve decided to take the plunge into owning rental properties, your next steps will determine your chances of success.
1. Utilize Property Management Software
Keeping records of all your payments and expenses is an essential part of being a landlord. Tax time will go much smoother if you have organized data, and you’ll be more likely to increase your deductions if you have maintained your records all year instead of scrambling last minute to find receipts. You may also use property management software to advertise your property as available on listing sites, send and receive documents, collect rent online, and more. It often helps you streamline your process and limits the number of programs you use to keep up with the aspects of your rental business so that things do not become mixed up.
2. Learn State Laws
Take some time to read the laws on tenant-landlord relations applicable in your state. While this may not be the most entertaining reading you could do, it will help you know what is allowable and what isn’t. You don’t want to accidentally overstep your boundaries because you weren’t aware of current regulations. Always keep in mind that while some laws are federal laws and will cover everyone, there are often state and even city laws that you will be required to know as well. Make sure that you do not cut corners when it comes to keeping up with the legal side of property management.
3. Inspect the Rental Property
While you probably had an inspection completed when you purchased the property, you’re now looking at it through the eyes of a landlord and prospective tenants. Consider updates that need to be made to attract tenants and keep them long-term. Look at the appliances and think about replacing them if they are older and not energy efficient. Make sure the carpet or flooring is in good shape and that all windows and doors work properly. Take a look at the exterior as well. The outside of the unit will be the first thing that the potential tenant sees when they look over the property, and their first impression may be a deciding factor if they apply or not. It will be easier to rent your property if everything is in working order and not too old.
4. Meet the Tenants
If you’ve purchased a rental property that already has tenants, you’ll want to make meeting them one of your top priorities. Introduce yourself and make sure they know how to contact you. Let them know if any changes will be made in the near future. Having a new landlord can be a frightening concept for some people and may cause them to look for a new place. To prevent this from happening, take time to get to know your tenants.
5. Be Insured
If you didn't get insurance coverage as part of your purchase, make sure you do it now. You’ll want to protect your investment in case of damage. You’ll also want to maintain liability coverage for your property for injuries or damage to tenants or guests. Even if you obtained a policy when you were financing the property, you may want to review it now to determine if you need higher coverage. Also make sure that you have the correct coverage. Some policies are meant for property owners that live at the property and may not cover damages if you are not a resident in that home. Check with your policy and make sure that it allows for renters.
6. Determine Maintenance and Payment Schedules
Now is the time to set up a business that’s efficient and productive. Decide who will be responsible for maintenance — whether you’ll take care of all issues or hire someone. Set up a list of contractors and companies to call for various issues, such as heating or air conditioning, plumbing and electrical problems. When you work with one company, it will respond faster when you have a work order.
You also want to decide about payment. Set up a payment system that works for you and your tenants. You may want to hire an outside company to manage payments and late notices. You’ll also want to have an accountant to deal with your finances if you have multiple properties. You may even find it beneficial for your accountant to take care of a single property if you plan to expand in the future.
Start out your business on the right foot, and you can eliminate many of the problems landlords face. You can focus on keeping your tenants happy or finding new tenants and making money from your property.
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