According to SmartMove, about half of all landlords manage their own properties – and that’s no easy feat. If you’re a first-time landlord managing your own properties, chances are you have a lot of questions. How do you find and screen tenants? What should you include in your lease agreement? How can you protect yourself legally?
Being a landlord is both an art and a science. It requires knowledge of legal obligations, financial management skills, tenant relations know-how, and more. That’s why it’s important to be prepared before jumping into the rental business – not only for your own peace of mind but also to ensure success as a landlord.
Here are some essential tips for first time landlords that will help make the transition smoother.
1. Get Familiar With Tenancy Laws
In every state, there are laws and regulations that landlords must abide by when dealing with tenants. These laws cover topics such as:
- Minimum habitability standards
- Tenant rights & responsibilities
- Security deposit limits and return policies
- Eviction procedures
- Rent increases
- Lease agreement requirements, etc.
Familiarizing yourself with these laws will help ensure you’re complying with the law and protecting yourself from liability. You can find a comprehensive list of tenancy laws in your state online or consult an attorney if necessary.
2. Set Up Organized Record-Keeping System
Keeping records is an essential part of being a landlord. It’s crucial to have a system in place that allows you to easily track expenses, payments, and other information related to your rental business.
That way, when the time comes to file taxes, you’ll have all the information you need in one place. You can also refer back to documentation if a tenant ever questions charges or payments.
Consider using an online software program or spreadsheet to keep track of everything, or create your own filing system using paper records and folders.
3. Draft a Clear Lease Agreement
As a landlord, you need to protect yourself – not just legally but financially as well. One of the best ways to do this is by creating a clear, comprehensive lease agreement that outlines your tenants’ rights and responsibilities.
Your agreement should include things like: rent due date, late fees, security deposit amount and return policies, pet policies, guest rules and more. Be sure to consult an attorney or housing authority in your state for help with this step; they can provide you with sample forms or point you in the right direction.
4. Screen Tenants Carefully
You want to make sure you’re renting out your property to trustworthy individuals who will pay their rent on time and take good care of the property. That’s why screening tenants is an important part of being a landlord – and something you should do carefully.
Here’s a handy checklist of what to look for when screening tenants:
- Check credit, background, and rental history
- Verify employment or income
- Call previous landlords as references
- Ask for proof of identity (i.e. driver’s license)
- Have potential tenants fill out an application form
Never take a potential tenant at face value; you never know what kind of person they are until you do your due diligence.
5. Have an Emergency Fund
As a landlord, there will inevitably be unexpected expenses that pop up from time to time. Have an emergency fund set aside specifically for rental-related costs. Repairs and legal fees can add up quickly, so it’s best to be prepared with a financial cushion.
If something then comes up suddenly (like an appliance breaking down or a tenant dispute that requires legal help), you won’t be blindsided by the expense.
Wrap-Up: Know When to Ask for Help
Being a landlord is hard work – and sometimes you just need some help. Whether it’s from an attorney, accountant, or property management company, don’t be afraid to ask for assistance if you need it.
Here at Verraterra, we’ll get (and keep) your place rented by safe, reliable tenants and make sure your property is well taken care of. Contact us for more information about our services or to set up a consultation!