There are over ten million landlords in the U.S. and this is expected to grow in the coming years.
Understanding what to do as a first-time landlord will prevent you from making costly mistakes. Luckily, once you know the basics, it'll be easier to make the right decisions for your business.
Sounds like your situation? Here's everything to know as a first-time landlord, from transforming into a businessperson to rental analysis.
1. Treat Your Rental Like a Business
One of the top real estate investment tips is treating your rental like a business.
The key is to conduct a rental market analysis by seeing what similar properties charge as it gives you a starting point. You don't want to overcharge because you won't attract tenants and you don't want to sell yourself short. Then, you can create rental yield strategies and ensure that the property yields 5-8% for a decent profit.
When you advertise your property, mention amenities that tenants will appreciate. For instance, the rental may be in a great school district or have a community pool. Regardless of the amenities, this should be reflected in the rental price.
2. Invest in Regular Maintenance
A major part of property income optimization is routine maintenance.
Many first-time landlords make the mistake of ignoring its importance, but spotting potential problems can save you a fortune. Aside from protecting your investment, tenants are more willing to renew their leases, giving you peace of mind.
3. Hire a Property Manager
Owning and managing properties is no easy business, which is why most landlords hire a property management company. Not only will you gain valuable property management insights, but these professionals know everything you need to run the business.
Many landlords are unfamiliar with tenant-landlord laws and if you don't have these memorized, you could face an expensive lawsuit that will damage your reputation. Property managers will keep you updated about rent control laws, the eviction procedure, and how a tenant's rights can affect your approach.
Note, that property managers can also help with accounting. They will hold onto important receipts and proof of rental payments, so filing taxes is a breeze.
Further, property managers know how to properly screen tenants. Managers will conduct a thorough background check, including diving into their credit reports and rental history. This helps you spot trustworthy tenants who will pay their rent and are less likely to damage your property.
Once you're happy with the tenant, property managers will handle the communication. Most use a tenant portal, so you can read messages on the go and act on their feedback.
First-Time Landlords: Rental Analysis to Tenant Screening
Now that you know the basics of becoming a first-time landlord, it's time to start the process.
At PMI Cuyahoga Valley RAL, we keep both tenants and landlords happy by handling daily tasks. From rental analysis to maintenance, we guide landlords through the process. If you're interested in our services, we'd love to help.
Reach out to us and chat with a member of our team.
