Top Tips for Getting Started as a New Landlord or Investor
The varying responsibilities of owning and managing an investment property can take its toll, but knowing why and how to outsource those responsibilities can give you a head start.
• Understand the Fair Housing Act: The Fair Housing Act prohibits landlords from using any of the following criteria when evaluating prospective tenants: race, color, national heritage, religion, gender, disability, and familial status.
You must also be aware of your state rental laws and local ordinances to fully protect yourself from a sticky legal situation.
• Develop an Understanding of Property Maintenance and Essential Costs: Property maintenance is crucial to maintaining your investment. Understanding how much you need to save for repairs, and keeping in mind that vacancies can happen (and will cut into your bottom line) will keep your investment afloat no matter what situation you find yourself in.
• Research Tenant Screening Best Practices:
A landlord should always verify the rental applicant’s credit, employment/income, criminal background, and eviction history. Good tenant screening can check for any red flags and help you avoid tenants who have been fiscally or socially irresponsible.
• Navigate the eviction process: Although many of us don’t want to think about the worse case scenarios, it is important to become familiar with the eviction process and be ready to start the process when a tenant violates the lease.
• Handle all tenant turnover tasks: Tenant turnover involves a lot of additional work. Managers handle walkthroughs, marketing, tenant screening, and ensure that new tenants understand lease requirements.
• Rent Collection: A property manager will also deal with late payments, unpaid rent, and the process of evicting a tenant due to non-payment of rent.
What you need to know as a new landlord or investor goes beyond simply rental knowledge. A property manager or landlord must wear many hats.