If you're thinking of renting out your house or condo, you're most likely overwhelmed at the thought. How can you be the best landlord and make the most profit? Here are four tips for the beginner landlord:
1. Know the law
Know the tenant laws for your area. If you're unsure of any legal matter regarding renting, consult a lawyer. Here is a general guideline of legal questions:
- Is my property correctly zoned and permitted for leasing?
- Do I need to make any repairs before the property is fit for habitation?
- What type of account do I put the security deposit in? How long must it be held in that account?
- What rules can I legally give to tenants?
- On what grounds can I evict tenants? How much of a notice do I have to give for eviction?
2. Take pride in your property
Picture the perfect tenant. This tenant is responsible, quiet, clean, and prompt. Will this tenant want your property? Be brutally honest with yourself. Your property must attract the kind of tenant you want. You must be willing to invest in maintenance and repairs for your property. Here are some tips:
- Clean the place until it's spotless.
- Add a fresh coat of paint and new carpet. If you have hard flooring, buff it.
- Repair or replace appliances.
- Hire an exterminator to get rid of pests and do preventative spraying.
3. Hire a property management company
Rental property management companies, like Cambridge Companies, are great for inexperienced landlords, as well as landlords who own many properties. The property management company handles all interactions with the tenant. The company collects rent, runs background checks on tenants, handles maintenance and repairs, and deals with tenant complaints. You will not have to deal with the tenants yourself. In exchange, the property management company takes a percentage of the rent.
4. Set aside an emergency fund.
If you're a landlord, you need a hefty emergency fund. You should aim to transfer at least 20% of rent you collect into a savings account. You never know what will happen, and cash flow is essential for running a property. What if a pipe bursts? What if there's a fire? What if your tenant leaves and it takes months to find a new one? What if you have to take a tenant to court? With a large emergency fund you can handle these issues quickly and without unnecessary stress.
With these tips you will be well on your way to becoming a successful landlord.Share