6 Renting Secrets Every Landlord Should Know
Smart landlords know the best ways to find good tenants, minimize problems, and keep those rent checks coming in like clockwork. To make sure rental nightmares don’t end up costing you, here are the do’s and don’ts of being a smart landlord.
1. DO conduct background checks
Pull a credit report. Ask for at least three references (and actually call them). Call the applicant’s employer. Find out the truth about a prospective tenant before signing a lease.
What you don’t know could hurt you. If you don’t have time to conduct background checks yourself, hire a service to do it for you.
2. DON’T rent out an out-of-state property yourself
Being an absentee landlord can work out just fine – if everything goes smoothly.
If you aren’t around to keep an eye on the property, you’ll have no idea how well it’s being maintained or whether there are any repairs that need to be made.
If you must rent out a property in another state, hire a property manager to take care of things. In the long run, it will actually save you money.
3. DO familiarize yourself with your local landlord-tenant laws
Laws governing the rights of tenants and responsibilities of landlords vary widely. Some states and municipalities require you to take classes or obtain certification before you can become a landlord.
Learn as much as you can before you start renting out a property. If you ever have trouble with a tenant, the last thing you want to do is make things worse by unintentionally breaking the law.
4. DON’T sign anything without consulting an attorney
Generic downloadable lease agreements are usually a bad idea. Your specific legal situation is unique, depending on where the property is located. Make sure you have an attorney draw up a lease for you.
The first time you run into trouble with a tenant, you’ll be glad you did. The services of a good attorney will pay for themselves many times over.
5. DON’T take matters into your own hands with a deadbeat tenant
Almost every landlord get stuck with a bad tenant at some point. Although most tenants are relatively trouble-free, occasionally you’ll find someone who makes a habit of cheating landlords and squatting in rentals as long as possible.
If this happens to you, don’t lose your temper. Call your attorney and take the proper steps to evict this tenant quickly and legally.
6. DO keep an emergency fund in place to cover the inevitable
Sooner or later, something will go wrong in your rental property. It could be an unexpected major repair, a costly eviction, or a lengthy vacancy. Keep enough savings on hand to cover at least six months of unpaid rent, so that if you do run into trouble, you won’t be forced to go into debt or sell the property.
Remember, rental property is one of the most dependable ways to build wealth, if you do it right. Keep these tips in mind to help you find the best tenants and keep those rent checks coming in on time every month.