Landlords don’t just collect rent checks. Successful landlords must understand the law, negotiate different personalities, and adapt to various problems that can pop up at any time. Here are six things every potential landlord should consider before taking a launch.
Landlords don’t punch time clocks and work regular hours. While some days can be blustery, others may be intensive and exhausting, where obligations change on a dime. For example, you may plan to swing by the properly just to collect a rent check, when you unexpectedly encounter a tenant with a small plumbing leak, and you must decide to whether to disregard their situation, personally handle the issue, or call a plumber to assess the problem. In any case, if you decide to address the problem immediately, your ten-minute rent collection plans can quickly become a three-hour ordeal.
A landlord’s tasks can be vast and varied. Here are just a few examples of the role a landlord plays:
All of the above listed roles can vary from time to time depending on present situation of the property, tenants etc.
Learn the landlord-tenant laws. First, there are federal laws related to habitability and anti-discrimination that you need to be familiar with. As a landlord, you cannot discriminate against tenants based on race, color, national origin, religion, sex, disability, familial status, children, etc. In addition, most states have further landlord-tenant legal provisions. These can regard a variety of issues such as security deposits, level of access to the property, notice you need to give the tenants before you want them to leave, etc.
Once you have bought an investment property and are on your way to becoming a landlord, you have to screen potential tenants. You should do a background and credit check on potential renters – it is worth the time. Although a credit score should not be the sole reason you accept or reject a tenant, it is a useful screening tool. Take the time to check references, particularly from employers and past landlord. You should also conduct an interview with the potential tenants to make sure you are comfortable communicating with them. Throughout don’t forget that it is illegal to discriminate against tenants based on the criteria listed above.
That’s why it is important to choose a location that is convenient for you. To avoid problems and misunderstanding with the tenants, explicitly state how often you want to perform inspection of the property in the lease documents. Three months is usually a reasonable period which allows for keeping an eye on the property without disturbing the tenants too much. Remember to document the move-in condition of your rental property by taking pictures in order to establish a baseline. If you find any problems during an inspection, it is a good idea to issue a notice and set another inspection in a week or two.
Consider whether it is worth hiring a property manager. A property manager comes at a price, but he/she will save you a lot of time and effort. Usually a property manager can market your rental property, select tenants, maintain the property, create budgets, and collect the rent. If you opt for hiring a property manager, identify his/her responsibilities clearly. Whether you decide to go for a property manager or do these tasks on your own depends on your financial situation, other commitments, and personal and professional skills.
Before you jump into becoming a landlord, make sure to know what becoming a landlord is all about. While it can be a way to make money, it is not about getting rich quick. Learn your responsibilities and proper laws first. After all, becoming a landlord is opening a business like any other, so it should be considered and tackled carefully.