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5 Tips for New Landlords

The constant fluctuations of the housing market can mean many things in terms of property investment, rental rates and the life of a landlord. We know, for instance, that there is a higher percentage of renters in the United States than there has been in quite sometime. But what we haven’t addressed is that there are also more landlords.

Whether you have found yourself in a property investment deal that didn’t go quite as planned or you’ve moved to another house while your old property has sat on the market for far too long, you yourself may have already become a landlord due to a lack of options. The life of a landlord can be financially rewarding, but it can also be complex and draining with many rules, laws and advice to wade through. In this article we want to distill a few of the more important tips that will lead to a better life for both you and your tenants.

1. Have a Knowledgeable Attorney on Speed Dial

And we don’t mean your friend from high school who now works in criminal law or your neighbor who used to be a paralegal. You should find an attorney who specializes and is intimately familiar with landlord/tenant law and the evictions process. No one wants to think about evictions when you don’t even have a tenant yet, but the fact is that at some point you will have to deal with the process. If you develop a good relationship with an attorney sooner rather than later, it can save you a lot of headache and maybe a few bucks in the future. A good attorney can also help you by reviewing your lease agreement to make sure there aren’t any glaring errors or problems.

2. Consider Professional Property Management

It may seem like an expensive prospect, but the fact is that unless you live next door and can dedicate a significant amount of your time to dealing with your tenants, you will be much better off having the property managed professionally. A trusted manager can fix problems as they arise, collect rents and develop a professional relationship with your tenants so that you can go on living your life without the constant threat of a phone call with an emergency plumbing situation.

3. Set Expectations Right Away

Most landlords agree it’s important to set your expectations up front and not back down, even if it makes you uncomfortable at first. As a landlord, it is important to remember that while you may respect and even like your tenants, you are NOT friends with them. Insist that they pay their rent in full, on time, from the very beginning. This makes it less likely that they will offer up excuses in the future. You’ve become a landlord to recoup an investment, one way or another, and you won’t be able to do that unless you actually collect rent.

4. Find a Good Tenant Application

Having an application system in place before you even put out a yard sign for your vacancy will make your rental process go more smoothly. We find that an online rental application is much simpler to use than a paper form. You can collect all the information you need – including references, driver’s license number, credit check approval and a new tenant’s contact information – and keep it safely in one place online for future reference. Even if you don’t choose to go online with the process, make sure you have an application ready as soon as tenants start calling.

5. Choose Tenants Wisely

If you’re desperate to start generating income from your property, you may want to place the first person who shows an interest, but that is not the best idea. Screen your tenants, run a credit check on your tenants, interview your tenants, call your tenants’ landlords. Make sure they are trustworthy people who are not likely to destroy your property and run off in the middle of the night without paying rent.

Of course, being a landlord is not as simple as five easy tips, but keeping these tips in mind as you venture into the world of landlord-hood should make your new role a little easier.

  1. Comment by Daniel Baber
    June 6th at 11:02 am 

    Great article. Couple things I would add to the list if you try Manage the home on your own:
    1. Perform a Move In Inspection with your tenant, have them sign the Report with Photos and possibly take a Video, & show them how to maintain the home.
    2. Learn & Comply with the Fair Housing Laws
    3. Make sure you see tenant’s Photo ID and the persons/name on ID matches the lease.
    4. Require a certified check or money order at move-in for the first months rent & any remaining balances.
    5. Be Prepared! Have a plan for everything and a team available as needed (otherwise hire a property manager and try to relax)

  2. Comment by Nancy Mitchell
    June 6th at 12:00 pm 

    I appreciate your information on landlords…however, I do wish the website would tell you up front what their fees would be. They say “free” but that’s not always the case.


  3. Comment by George s
    June 6th at 1:36 pm 

    Hiring a property manager is a great Idea, for those who have no clue about property or repair and maintenance, on the other hand if the owner is out of state and the rental property is in a different state, the property manager can have a field day,the owner is not there to check the manager can make up false charges like maintenance that is not needed, and send his people there and charge the owner more$$. It happens a lot in this business, that is why it is important to do a check on the Property management company, check their website and see if there are any complains, they charge tenants extra fees that the owner is not aware and pocket the money, the best idea is to get an attorney that specialzes on Real Estate and evictions for that state and have the Attorney draft up the lease to make sure it is legal and can hold in court.And it is true, do not be buddies with your tenant, its strictly a business transaction, have a good lease drawn up and stick to it.

  4. Comment by George s
    June 6th at 1:44 pm 

    Most of the charges by property management companies are 1st months rent and 10% of the rent per month to manage, but make sure you fully understand what the managements responsibility is and what will they do, and what is your responsibility as an owner, remember YOU are responsible not the company, have everything in writting

  5. Comment by Frank Jutras
    June 20th at 10:38 am 

    These are very useful tips for somebody who is beginning to invest in rental real estate. I love the idea of having an attorney and a property manager at hand; it is part of what I call a ‘’Dream Team,’’ which is a team of experts that have contacts and knowledge of the real estate market and transactions. I normally suggest that people have a team of about 10 people: an attorney, an accountant, a number of real estate brokers, a mentor, a notary, a property manager, a team for rehab, etc. The main point is to be ready when something comes up, and you want to have people you can trust.

    Another important point is to choose good tenants; do not take the first tenant that shows interest. Your quality of life as an investor will be better, and the experience will be more delightful if you have good tenants.

  6. Comment by g Gomez
    October 9th at 11:01 am 

    to George s. I feel it is irresponsile to claim that Property Management companies will over charge and make up charges. If they are professional there is no reason for this to happen. As a property owner you should use common sense and every month when your statement comes in from the management company make sure you go over it and if there are charges that do not add up then simply ASK. A manegement company with that type of reputation will not be in business very long. Asking questions is always your best deffence

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