Rental properties must be treated like businesses, and first-time landlords will encounter many challenges while managing tenants. When you own a rental property for the first time, it is crucial to perform research to prevent common errors that most new landlords make. For example, when it is time to create rental agreements and negotiate contracts with your tenants, the right approach is key. Understanding your role as a landlord will help you to avoid many of the common problems rental owners experience.
Your tenant’s safety is the highest priority when you allow them to rent your property. You will need to create a schedule and perform routine checkups and maintenance for the rental. For example, there have to be functional smoke alarms on every floor and carbon monoxide detectors near any appliances that burn fuel. Heating, hot water, plumbing, electrical, HVAC, and ventilation systems all must be regulated according to local law. You will also have to make sure the stairs, floors, roofs, and walls of your property have no infrastructure code violations. Perform a combustion test on the furnace, make sure all the vents are free of debris, and also test the smoke and carbon monoxide detectors.
It is important to keep a paper trail of all of your expenses and revenue. For example, tenant applications, purchases, receipts, licenses, and maintenance on the property should be kept on record. You should also consider digitizing this information so that you can keep this data on a hard drive or in the cloud for convenience. An office administrator or accountant can manage your taxes and other important paperwork so your affairs are in order. Know Your Rights
You should get educated about state laws regarding your rights to protect yourself from irresponsible tenants. Also, get educated about tenant rights so that you don’t infringe on their privacy and accidentally break the law.
Don’t try to make most of your money off the rent, as this can turn away potential tenants through overpriced rentals. Consider using alternate avenues to make revenue, such as renting out storage space, installing vending machines, or leasing a billboard on one of your larger buildings.
Insurance and Liability
Landlord insurance will prevent you from any severe financial pitfalls when natural disasters, maintenance issues, and accidents happen on your property. You can also negotiate with your tenant to have them pay for the rental insurance. This protects you when the renters’ items are ruined due to an accident because they may file a lawsuit.
Always Take Photos
You should document how the property looks before and after a tenant lives there. This is useful proof to show that the damages are accurate, so you can hold the tenant liable for a deduction from their security deposit. The tenant cannot win in court if you have verifiable proof that they ruined your property.
Get a Property Manager
Instead of your tenants calling you at all times of the day, you should work with a property manager to save you time. Owning a rental property can be a major hassle when tenants have maintenance issues, are late with payments, or have disputes. A property manager can save you time and money when you begin to expand to multiple properties.
More Tips for First-Time Landlords
You should also learn how to create professional contracts for lease and rental agreements. You can learn more about being a landlord by doing additional research online.