Being a landlord is an excellent way to make money. Even when the economy takes a downward turn, people still need a place to live. Before you dive in, you need to know how to be a landlord. Here are some tips to get started.
Create a Budget
When considering how to start a rental property business, you need to think about the budget. Many people think they know how to be a landlord, only to discover they didn’t budget for all the expenses, and they end up in the red. Expenses include maintenance, repairs, inspections, property tax, mortgage payments, and insurance. You also need to pay to market the property and for screening tenants.
Spend some time thinking about how much your rental can cost you. Remember that it might sit vacant from time to time, and you will still have to pay expenses.
Know the Law
Landlord-tenant rights and laws vary from state to state. You need to familiarize yourself with the laws in your state so that you can follow all the guidelines. If you fail to comply with the regulations, you could get in some serious trouble. Don’t’ make that mistake when working as a landlord.
Purchase Landlord Insurance for the Rental Property
You need to get landlord insurance for your rental property. While policies differ, most cover the property’s structure as well as legal costs and medical expenses associated with the property. Insurance also covers the loss of rental income if you have to make repairs. Along with landlord insurance, encourage your renters to get renter’s insurance to protect their belongings.
Take Care of Maintenance and Repairs
You need to keep the property habitable. That means you need to make maintenance and repairs as required. This might cause you to wonder, “Is it a landlord’s responsibility to paint?” Laws usually do not require that landlords paint rental properties. However, most choose to do so to make the properties look modern and new. Many landlords even put it in the lease, outlining how often they will paint. If you put it in your lease, you must follow that, or your tenant can hold you accountable.
Screen Tenants Before Offering an Agreement
When figuring out how to be a landlord, don’t forget that you need to screen tenants. You want to make sure you only rent to people who are likely to pay the rent and take care of your property. Because of that, you need to check the person’s background and history. Look for eviction records, criminal convictions, bankruptcies, and more. Also, verify the person’s employment before providing an agreement. As a first-time landlord, you don’t want to start with a bad tenant.
Get It in Writing
You should create a customized lease for tenants. It should include all the rules and guidelines, as well as the amount of the rent and late fees. Before you give the tenant the lease, have a lawyer look over it, and then review it with your tenant.
Start Making Money as a Landlord
Now that you know how to be a landlord, you can start the process. Find a rental property, choose a tenant, and start making money as a landlord.
Did you know that you can find landlord insurance coverage at Freeway? We remain open and ready to meet all of your insurance needs, start your free landlord insurance quote online or over the phone today.