8 Tips for Beginner LandLords
Being a landlord can be a rewarding experience if done right, I will always suggest using a flat rate property management company like Loose Leaf Property Management to handle all your property management needs. But for those of you that do not have the luxury of working with them in the San Fransisco Bay Area. Here is my list of the Top 10 Tips for Beginner Land Lords.
1. Collect Your Rent on the 1st
This rule goes hand in hand with another rule I have which is try your best not to rent to family if you are going to be serious about your investment property. You must make sure the rent is collected every month on the specified date you and your tenant picked. Make sure to take late fees seriously and document all 3-day notices in the unfortunate case that you have to evict this tenant in the future.
2. Consider an investment partner
Don’t be afraid to partner with an experienced investor on your first rental home. They will be able to give you more tips and tricks on how to pick the right property. They will be financially invested as well so you will be able to trust their judgement if you picked the right investment partner.
3. Screen Your Tenants
Make sure you take your time with this step as you will be in a contract with the tenants you end up going with for at least a year. Income is important, make sure your tenants can comfortably make their rent payments every month. Call their past residency and verify that they lived there. Run their credit and use the following chart to determine if they are the right tenant for you.
Excellent credit — 750 and above
Good credit — 700 to 749
Fair credit — 650 to 699
Poor credit — 600 to 649
Bad credit — anything below 600
4. Be Wary of Pets
Pets can add value to your rental because most people are willing to pay more if they can have their four legged companion living with them. Make sure you collect a pet deposit if the pet is not registered as an emotional support animal. Most pet owners take good care of their pets but you will want to be able to protect yourself if their furry friend leaves some stains on your carpets.
5. Get Familiar with Your States Housing Laws
Make sure everything you are doing is in line with your states housing laws. Loose Leaf Property Management is always checking for updates in the rental laws as owners could be affected negatively if neglected.
6. Not All Upgrades Will Lead to Higher Rents
This may be a hard pill to swallow but not all upgrades are going to raise the rent of your property. Major upgrades will positively affect your rent. Adding an A/C unit to your home in a neighborhood that generally doesn’t have A/C will be a selling feature. Making sure your home has all the necessary appliances will add value to your home. Small upgrades like a fancy black-splash or crown molding are pretty to look at but do not justify a higher rent in most neighborhoods.
7. Collect Rent Online
Most property management companies will have a software that helps them collect rent online. This makes the rent collection process very easy for property management companies and allows the tenant to use an online portal to pay their rent. You should look into methods of collecting rent online to avoid any late rent due to errors in the post office or a mistaken address etc.
8. Market Rental Properties Effectively
When marketing your property make sure that you are highlighting aspects in the neighborhood of the property that will add value to your rental. Do your best to make a good description that will answer most of the questions the potential renter will have. In your marketing description you can also include the criteria for renting your property whether you're excepting pets, and utilities that may be included and if you're in an HOA community any amenities that are available to the residence.