With today’s housing market in a sharp decline, most people are finding that renting has become a better alternative for them. To take advantage of such a spike in the rental market, there are steps one can take to not only becoming a landlord but becoming a great landlord.
- Know the law
If you are going to become a landlord, you absolutely must be aware of what the laws are specific to your state and how they affect you as a landlord. You need to know the laws regarding security deposits, how much notice to provide before entering a premises, and even what your rights as a landlord are. In addition to state specific laws, you’ll also have to be aware of laws that are put in place by the federal government. These laws mostly are concerned with fair housing and anti-discrimination laws.
- Research your prospective tenants
This cannot be stressed enough. If you have prospective tenants applying for apartments, you will want to make sure that you’re picking responsible tenants who will pay their rent on time because, ultimately, this is a business (more on that later). A good rule of thumb when screening your prospective tenants is to focus on income levels, if there are any prior evictions, that they have good references, and that they generally have a clean background. By doing your research, you’ll have the best tenants possible residing in your unit(s) and can start the tenant-landlord relationship off on the right foot.
- Respect is key
Once you’ve filled your unit(s) with tenants, you may find that you don’t “jive” with them on a personal level after all. No matter your personal feelings towards them after renting to them, if they prove that they are able to pay their rent in a timely manner, are decent tenants, and aren’t causing damage to your property, then you should afford them the same respect that you would desire they give to you. If there isn’t mutual respect in the tenant-landlord relationship, there will be disputes about small details that come along far too often and it could negatively affect future tenants if your current tenants pass on the “bad review”. Reputation always plays a factor into being a landlord. So, you want to ensure that your reputation isn’t tarnished but instead shines when prospective renters are searching for their next homes.
- This is a business, not a hobby
All too often, the reason that most landlords fail is because they try to be the “cool” landlord who allows tenants to, essentially, do whatever they want. Landlords need to remember that this is their business. It’s not a fun hobby that they can pick up and drop whenever they want. There are property taxes involved as well as insurance for the unit(s), and obviously preparing the unit(s) for the tenants. Landlords invest a large sum of money into a property before they are able to even rent it out. You need to remember that, bottom line, you must have a return on your investment. Otherwise, you will always be in the red.
- Forget about getting “rich quick”
As previously mentioned, being a landlord boils down to remembering that it is a business. If you’re expecting to make copious amounts of money rather quickly, you should perhaps select a different career journey to go on. There are always the upfront costs but there are also the costs of maintaining a unit or a building. There are plenty of strategies for investment available, you simply need to find the one that suits your needs and your resources.
Becoming a landlord is not necessarily a difficult thing to do. It just takes a good investment strategy, a firm understanding about rental laws in your state and at the federal level and, most of all, patience. Be patient with your tenants when they have requests regarding their unit(s). Be patient and know that you may not have a large return in your first year. Lastly, be patient with yourself and trust that, after all your research and preparation, you can succeed at becoming a great landlord.