Stepping into a landlord role can be challenging for new property owners. However, adopting the best management practices and being consistent with them helps you streamline your rental operation. The more efficient systems you build, the fewer property problems and emergencies you will encounter.
Managing your rental well also encourages long-term stays, which create a steady source of income for you. This income can be used to build up more property value by performing renovations, which lead to attracting more residents to your property. Here are some vital tips for first-time landlords to help them succeed:
Develop a Bookkeeping System
It’s vital to get your books in order. You should be able to track your revenues and expenses, so when tax season rolls around, you can file everything more efficiently. Making business decisions is also simple when you have an excellent bookkeeping system to rely on. You can quickly determine whether you have a budget for property upgrades.
Whatever accounting software you use for your business, the essential thing is to record your finances, such as mortgage payments, property taxes, rental payments, and maintenance costs. Keeping and storing receipts properly is also important for reference when computing tax deductions.
Opt for a Written Contract
You may think that agreeing verbally with a renter is enough when leasing out your rental. However, it is highly recommended for landlords to draft a written contract and have it signed.
If you want to reduce property problems and potential disputes with residents, putting everything in writing is the best solution. You must provide guidelines on rental payments, rental due dates, property policies like subletting and accommodating pets and handling property maintenance requests.
If there are changes to the original rental or lease agreement, this should be recorded in writing, too. This can refer to notices on property inspections and handling simple property repairs. Providing a written lease contract can save you time as well as prevent conflicts. Residents can easily check the lease to learn the proper procedures, payment options, and various policies.
Perform Tax Planning
Running a rental business requires you to plan your taxes. You need to learn the tax deductibles to maximize your advantages as a landlord. Consulting a tax expert is advisable to manage your tax payments and know how much tax you must pay for your rental unit.
Outline a Clear Lease Agreement
Since your lease guides residents, you need to clarify situations that violate the lease. You must be specific about the consequences when a resident fails to pay the rental payment on the due date or creates noise disturbance that leads to complaints from other tenants or neighbors.
Provide details on how policy violations are handled and what the available resolutions are. You can inform the residents about the process performed for handling violations, such as issuance of written warnings, paying fines, or being evicted.
Remember to Document with Pictures
Taking pictures before a resident moves in and after a resident moves out is crucial. This step aids in determining whether property damage has existed before the occupancy. You can also check whether the damage is caused by normal wear and tear or if it is due to negligence on the tenant’s part.
Photos can reduce conflicts and make it easy to evaluate whether the costs of repairs will be absorbed by the landlord or taken from a resident’s security deposit.
Be Ready for Vacancies
Facing a rental vacancy is inevitable sooner or later. As a landlord, being prepared by setting aside savings funds for maintenance expenses and marketing costs is a great strategy. If you have monthly mortgage payments, then it’s even more important to plan and develop other strategies to meet your payment obligations.
Design a Pet Policy
It can be daunting to welcome pets in your rental unit, but there are ways to mitigate the risks. You can decide early on whether you are open to accommodating tenants with pets or not. If you permit residents to bring in pets, you need to craft detailed pet policies.
Think about conducting pet screenings and charging pet fees or pet rent. However, ensure you check your state laws first to learn what pet fees you can charge as a landlord. What’s more, ensure that your pet policies don’t violate Fair Housing Laws.
Seek an Outstanding Local Maintenance Specialist
As a landlord, you must provide a livable space for residents. This responsibility requires handling property repairs when needed. Having a reliable person to maintain your rental space can reduce complaints from the residents. It can also build more property value since damage are fixed right away.
Perform a Tenant Screening
Screening potential residents can prevent a lot of problems. As a landlord, it pays to check out a candidate’s tenant history. Contact former and current landlords to learn more about the tenant. You should also review the credit score, verify employment and income, and check for eviction and criminal records for added safety.
Performing tenant screening also helps you avoid losing income since you can check the financial health of candidates and learn if they have a good record of paying the rent on time.
Engage in Property Management Services
Hiring a team of professionals to manage your rental property can create peace of mind, especially for long-distance landlords. Property managers can aid in marketing your rental space, performing tenant screening, creating a lease, and meeting the residents for signing, collecting the rent, and coordinating property maintenance and repairs. When emergencies arise, you can also rely on the property manager to resolve situations quickly.
Bottom Line
Try the tips listed above to increase the success of your rental business. The strategies outlined not only limit your risks but can also reduce tenant complaints. Delivering a habitable rental space also encourages your renters to stick around longer.
Are you looking for a trusted property management company? If yes, contact Stonelink Property Management today!
