So you’ve decided to become a landlord and are ready to post your first “For Rent” sign. Though as a new landlord you are eager to fill your rental and start making money, set yourself apart by taking the time to learn the ins and outs of the business. Don’t leave money on the table by rushing into your first tenant agreement; there are several things to consider before you cash that first rent check.
Avoid problems down the road by completing a property assessment before you put your rental on the market. Though you’ve always had a rental value in mind, it is a good idea to take stock of the repairs and appearance objectively. You will also need to determine the marketing strategy and rental value for attracting the right tenant. It is possible for you to do this yourself, but an objective opinion with extensive market knowledge will help you achieve best results.
- Do fairly assess your rental property to determine repairs needed and the right price.
- Don’t fail to be objective about your rental property and lose out on rent or overlook repairs and create future problems.
Finding a Qualified Tenant
Vacancy is one of the biggest risks of owning an income property; however, don’t panic and accept the first tenant that comes along. The only thing worse than no tenants is bad tenants. Bad tenants can cost more in unpaid rent, damages and if it comes to it the lengthy and expensive eviction process. To avoid a bad tenant start by advertising your rental as widely as possible, utilize the local real estate multiple listing service as well as an eye-catching sign. By attracting the most applications possible, you will surely be able to find a tenant who passes your screening process by meeting your income, credit and employment qualifications.
- Do attract as many tenants as possible and screen each one.
- Don’t take the first application that comes along.
A lease agreement can be one of your most powerful tools. Make sure you use the lease to your advantage, don’t just print something generic off the internet. A lease agreement is an opportunity to negotiate tenant renewal, security deposit, repair process and budget as well as a payment schedule. The lease agreement isn’t just a commitment for the lessee; you are making a commitment by signing it. Take the time to protect your interests by using a custom lease agreement.
- Do make sure to address all of your specific needs and concerns.
- Don’t just print something off the internet.
Renters insurance doesn’t just protect the tenant, it provides essential protections for you, the landlord, as well. Renters insurance protects your tenants and their belongings from unexpected expenses. This means that if the property catches fire and the tenants have to pay to stay somewhere else, their insurance covers it. Also, if there is a break-in the insurance will cover their property, and they will not have to pay to replace it. Unexpected expenses are the tenant’s problem until they cause your tenant to miss a rent payment. By mandating that your tenant has renter’s insurance, you are minimizing the chance of unexpected expenses for your tenant and therefore your risk as a landlord.
- Do require renter’s insurance, it’s for you too!
- Don’t assume renter’s insurance only benefits the tenant.
The Time and Financial Investments of Owning a Rental
While all these do’s and don’ts are meant to make your experience as a landlord easier and more profitable. As an individual owner, you will need to hire a lawyer for the lease agreement, the agency for the credit and background checks, and real estate professional for your property assessment. On your own, the process can be time consuming and expensive. While many landlords want to drop as much of their monthly cash flow to their bottom line as possible and forgo a professional property manager, in the long run, it can maximize your time and money.
- Do understand the costs of being a landlord.
- Don’t rule out professional property management.
What to Expect from Professional Property Management
A good property management company is there to be your partner, and to help you maximize your return on investment. An established property management company can help you minimize your expenses getting prepared for your first rental as well as reduce your long-term risk of damages and vacancies. You can still maintain positive cash flow while hiring a property management company and you will reduce the hours you personally spend on your rental. Whether you are a first-time landlord or looking for ways to decrease your time investment, contact Precision Realty & Management, LLC today. Precision Realty & Management, LLC is the largest and most trusted property management provider in the Houston area. Let the experts at Precision Realty & Management, LLC put their experience to work for your income property.