It might seem like being a landlord is a pretty cushy position, since you can just kick back and allow the rental fees to roll in, while you make your $100,000 a year profit. However, there’s a lot more to it than that. When everything goes according to plan, there’s no issues. But things never go according to plan for any length of time, and you could face some expensive property repairs, or some nightmare tenants that you just can’t get rid of. Providing general construction services helps maintain and make important upgrades to your properties. Here are some first time landlord tips to keep operation running more or less smoothly.
Choose the right rental property
The right rental property is one which attracts tenants, and which is easy to maintain. Find a property that is capable of producing regular cash flow, and then make sure you account for maintenance and the possibility of vacancies. These two factors combined can actually negate as much as 20% of your anticipated rental income, so it would be foolish to overlook them. If possible, find a property that’s in a desirable neighborhood and has a solid history of price appreciation. It would also be best if you can find a property that offers a number of desirable opportunities to tenants, for instance public transportation, parking, and safety features.
Avoid spending rental income
The reason you need to avoid spending income prematurely is that you should be building up a cash reserve that will be usable in times of unanticipated events or crises. The best approach is to have at least six months’ worth of mortgage money saved up which can be used to defuse emergencies and handle routine maintenance when necessary. By establishing this emergency fund, you will be insulating yourself against disaster when anything unanticipated crops up.
Document relationships with tenants
When it comes to property damage, you will inevitably hear the argument from tenants that the damage was done before they moved in. The smart landlord has photographic proof of exactly what the unit looked like before new occupants arrived. This will protect you later on, and save you from false claims by tenants. In fact, it’s a good idea to walk through the unit with your tenant when they first move in, so that the precise condition of the apartment can be noted and preserved for later reference.
Establish rules for who pays utilities
Whenever you become landlord in a new situation, make sure to find out exactly who pays for water, sewer, gas, electricity, and trash pickup. When you know exactly who’s responsible, it will avoid problems down the line with tenants who may have expected some kind of free service they were not entitled to. You may also want to find out exactly how trash pickup is conducted, so you don’t offer to pay for trash pickup when it involves the purchase of receptacles or new trash bags every week.
Perform periodic inspections
If you’re the type who pretty much ignores the unit after leasing it, you can expect to run into numerous problems with tenants. You will be much safer to conduct periodic inspections of all units, so that you can tell at an early time frame, exactly what’s going on in each apartment. You don’t want tenants to have an unrestricted run in your units, because they could be doing damage the entire time without you knowing it. By having regular inspections, you’ll catch any harmful activity at an early point, so it can be addressed somehow and so any damage will be minimized these are the first time landlord tips that every landlord must follow.
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