First Time Landlord Woes

Homeowners have a lot to keep up with, but landlords have even more. If you own a home and are thinking about renting it out, you should definitely read the common mistakes most first-time landlords make. Learning by trial-and-error could cost you dearly and make want to get out of the business altogether. 

  1. Live near the rental property

Living close to the property allows you to check on it occasionally, fix any problems yourself, and show it often when it's time to find new renters. Look for the best investment areas, and if it's in your long-term budget you can hire a property manager to handle the daily details.

  1. Know the landlord-tenant law

Majority of states have strict landlord-tenant laws that cover issues like security deposits, certain access times to the property, and how much notice you give the tenants before you ask them to leave.

A few laws to know are the "Habitability" and "anti-discrimination" laws. Most landlords scrim over this and tell themselves they'll be fine as long as they don't say or do anything racist or sexist. If only it were this easy. Many strange situations can arise so familiarize yourself with the law so you won't be caught in a stick situation. 

  1. Enforce timely rent payment 

This does not seem like a big problem, but if you get too friendly with your tenants they may start thinking it's okay to be late on rent. And if it continues they might skip or give partial payments when they are in between work. Eventually this might put you several months behind on rent and your mortgage has become a burden. Be firm with your tenants and foster a good relationship with them, and rent should never be an issue.

  1. Interview potential tenants

Online tenant screening services are well worth your time, money, and effort to screen who will be living in your properties. You may look at their credit score and their background history.

Having face-to-face interviews with your potential tenants is a great ways to gauge what kind of person they are. Do you feel like you can trust them with your property?  The ideal candidate is a fresh graduate who has a great job offer!

  1. Lease customization

Without a parent and attorney you can still make yourself a nice lease. There are basic lease forms online but don't be afraid to put in a couple clauses relevant to your situation. For example, you may allow pets of only a certain size, breed, and how many. Write what's important to you.

  1. Check on the property often

Be specific on when and what you will be inspecting blatantly written in the lease. The smart thing to do is take before and after pictures. Let them know you'll be stopping in every couple months, and if problems arise, ask them to comply or the inspections will become more often.

  1. Not a get rich quick plan

Being a landlord isn't as easy as it sounds. There's a lot of money that you'll need to spend to get the property and living shape for tenants. There's also landlord insurance and property taxes. If the bank knows this will be a rental property they will require you have at least 20% in down payment. Being a landlord should be an investment strategy, not a get rich quick plan. 

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