Interested in becoming a landlord, but don't know how the process works?
Allow us to help you find a lucrative investment property, excellent tenants, and so much more in this foolproof guide!
Learn Tenant Laws Before Becoming a Landlord
Did you know that in most states victims of domestic violence with proof can terminate their lease (without penalty) with 30 days' notice? Or that in Delaware, a landlord has 20 days to return a secret deposit after a tenant has moved out while New York's law simply states within "reasonable time?"
As a landlord, it's important to know what laws are in place to protect yourself and your tenants. You can find information on laws specific to your area here.
Find a Great Neighborhood
Purchasing a property near the area you live and work in will be the most convenient, as you already know the area, local businesses, and property values. This will also make things easier for you when it comes to meeting with potential tenants or arriving onsite for emergency repairs.
When selecting a neighborhood, choose one that is already solid and established or up and coming. Check comparable properties on sites like Zillow for sales trends before seriously inquiring about a listing.
If property values are decreasing and the area isn't well maintained, skip that listing. You're looking for a clean neighborhood near successful businesses with clean streets and sidewalks.
Choosing the Type of Property
Is your interest in renting out residential properties, storefronts, or office spaces? Your desired cash flow and money you have on standby for inspections and repairs should help make your decision.
Commercial properties tend to attract business owners who are the typically higher end and long-term renters. While the expenses put into a single-family home, for example, can significantly cut profits.
And while renting out a multi-family dwelling can provide multiple streams of revenue, one bad apple can really ruin the entire bunch. A problem tenant can cost you money and their neighbors' major headaches.
These are also reasons tenant screening is so important when becoming a landlord.
When you choose to act as your own property manager, an important part of your job is attracting and screening tenants. Past payment history and credit checks are common ways to verify whether a potential tenant will be responsible and timely with making rent payments. But also keep things like criminal history, job history, and testimonies from past landlords as options.
If you aren't comfortable completing these processes yourself, there are programs like Clockwork that will provide you with the findings of each background check and even help with maintenance and rent collection.
Be sure to come develop your own list of criteria you would like tenants to meet prior to taking this step. A single tenant can be the difference in whether your property is successful or becomes a money pit.
We're Here to Help
Becoming a landlord is a tough business that requires tons of research and a special set of skills.
Check out our blog and see how we've put our expert knowledge to use to simplify your journey.