Becoming a landlord is pretty simple, but becoming a successful landlord takes a lot more effort. To become a landlord, you need a property that is
Find the Right Tenants
The first step toward becoming a successful landlord is finding the right the tenants that fit your lease and your property. Consider where your rental unit is located and who is looking to live in that area. For instance, if you are renting out an apartment in a college-town, it’s probably better to market your property to college students. If you are renting out a spacious home near parks and a school, you may benefit from marketing your property to families with children.
Once you know who your target audience is, you’ll want to tailor your lease and your rental. Make sure your lease agreement accommodates the kinds of tenants you’re looking for; if you’re property attracts families, maybe making your rental good credit and that they are able to afford the rent (tenants’ income should be at least 3x the monthly rent amount). Remember, however, to never discriminate against potential tenants and to review the Fair Housing Act. Adhering to landlord-tenant law is imperative when being a landlord.
Set Up the Rent
As one can expect, rent is a key component of a landlord’s success. In order to generate the most profit, a landlord must determine what the best monthly rent price is and ensure that tenants pay regularly and on time. The most efficient method of receiving rental payment is online. This way, everything is recorded (with no paper trail) and automated. It will make paying rent easy for tenants, especially if they can set up auto-pay, and you won’t have to worry about waiting for mail or losing important documents. However, this also depends on the kinds of tenants you have. The majority of people in this day and age prefer doing everything online, but if you’re renting out to seniors, then you may have to adjust the process for them.
Know Your Laws
Perhaps one of the most vital parts of being a landlord is being familiar with your state’s landlord-tenant laws. Making sure your lease and rental practices are legally compliant is a sure-fire way of reaching success. When you’re up-to-code in all areas of your rental business, you’ll be sure to never run into legal trouble. And, if you have an issue with a tenant, you’ll know that you’ve been following the rules all along. You may even want to consider having a lawyer review your lease so you won’t have room for mistakes.
Build a Relationship
Happy tenant, happy landlord — this should be your motto. In order to keep your best tenants and avoid headaches, you should aim to build a relationship with your tenant. Always remain professional, but also be caring and compassionate. You want to hear your tenant out, but also stick to the lease. Make an effort to talk to your tenant and establish a rapport with them. Give them a way of contacting you and try setting “office hours” so they know when to reach you. If tenants make complaints or requests, respond as soon as possible and work with your tenant to resolve any issues.
Treat Your Rental Like a Business
Oftentimes, landlords will treat their rental business more like a hobby than an actual business. The success of your rental relies on your professionalism and ability to handle situations carefully. One tip you should take into consideration is not to rent to your family; this will likely cause tension and is not ideal for business. You should also get some landlord insurance and require your tenants to get renter insurance so that you’re covered no matter what. In addition, always respect the privacy of your tenants and be fair. If you find yourself needing some extra help, refer to the guides on our website or hire a property manager. Not sure what the right move is? Read this first.