First-Time Landlord? Here Are 10 Tips to Be More Successful.
Whether you are buying your first rental property or converting an existing home or condo into a rental unit, congratulations! You will benefit from a steady flow of income, while still gaining equity through long-term property appreciation. This is, of course, as long as you manage the property right. It isn’t easy to be a good first-time landlord.
There are some strategies you may want to implement, as well as common property management mistakes you will want to avoid. Here are some helpful rental property ownership tips from PropertyLark:
1. Do Your Research
This should probably go without saying, but you wouldn’t believe how many rental property owners we encounter who jumped into the buy and hold investment with hardly any research. You have to study the market, set a good rent price, figure out what upgrades or repairs need to be made to the property, create a clear budget and develop a strong investment plan. Take your time to do things right if you want to truly be successful. If not, you may find being a landlord much more difficult than you hope!
2. Treat it as a Business
You always have to remember owning investment real estate is a business. Managing a rental property takes a lot of work and planning. Treat your investment like a business in order to make it as profitable as possible.
3. Understand Property Management
Poor property management is where most first-time landlords fail. They simply aren’t ready for all the responsibilities and day-to-day dilemmas. You should take the time to learn what it takes to be a good landlord if you plan to manage the property yourself. Otherwise, hiring a professional property management company may be worth the extra investment. It will eat into your profits, but it’s better than having no profits at all because you are doing things wrong when managing it yourself.
4. Get Insured
You should get proper insurance on your property, with a policy specifically for an income property owner. You can protect yourself from potential liability claims and other losses that can happen because of natural disasters, tenant accidents, etc.
5. Understand Your Ideal Tenants
Before you start marketing your rental listing, you should know the type of tenant(s) you want to have living there. This will help you have a more focused marketing approach to attract the ideal tenants at the desired rent pricing. Will you allow children and pets? What about smokers? These are all issues to address when deciding who you want renting out your unit.
6. Get Organized
Going back to treating your investment as a business, you want to be as organized as you can be. Keep full, detailed records of everything related to your property. Every tenant, repair, upgrade, rent payment receipt, etc. should be tracked and archived for your business records and tax returns.
7. Get the Property Ready
You want to make your rental property as appealing as possible through renovations/repairs and marketing. This is how you attract better quality tenants and earn higher rent checks. If you obviously don’t take care of the property, you won’t get great returns. The effort you put in is usually repaid ten-fold when you take the time to do things right.
8. Set the Right Price
Setting the right rental price is one of the toughest challenges you will face as a first-time landlord. If you set it too low, you may attract less desirable tenants. If you price it too high, then you might be dealing with long vacancy periods that will eat into your profitability. Do your market research and find the right price for your rental unit.
9. Proper Marketing
Marketing is also important getting quality tenants and keeping your property occupied. Use the great online resources available, get good photos of your listing and consider staging it if that will help. Show your listing in its best light and you’ll see better results.
10. Listen to Your Tenants
First, you must interview all tenant candidates. Make sure they are a good fit for your property and not a risk to miss rent payments. Once you have a good tenant in your place, listen to them and understand their needs and feedback. This will help you be a better landlord for future tenants and make sure you get more out of your property for as long as you own it.
These are just a few great tips for first-time landlords. Obviously, there will be a lot you need to learn and sometimes it takes a little trial and error to be successful. Following these tips will help you minimize the errors and maximize your rental income opportunities.
For more help with buying, renovating and managing rental properties, consider joining the PropertyLark investment network. We can help you with all the resources you need to be a more successful real estate investor. Fill out the contact form and brief buyer questionnaire on any buyer page of our website to get started!