Owning a rental property comes with its ups and downs. If you are a cautious landlord, the positives will outweigh the negatives. However, contemplating the financial demands and the horrors of dealing with nightmare tenants are often enough to stress out any new landlord.
If the potential of a successful investment journey outweighs the stressors of what lies ahead, you are already on your way to bringing your new venture to fruition.
For the most rewarding and prosperous undertaking, these are the top tips that every new landlord should know:
Outline Your Responsibilities
Never mistake the role of a landlord as being hands-off. Many don’t realize how demanding the role – which often becomes a full-time job – can become. You are not simply there to collect a check at the beginning of every month. Quite the opposite. You become the point of contact any time one of your tenants needs an emergency resolved. This often means that you will have to respond to late-night leaky pipe issues or heating problems in the dead of winter.
Understand Financial Benefits
The financial profit that can be made as a landlord is worth the responsibilities and demands, however, these gains will not be immediate. New landlords are warned not to expect any profit for the first few months or even years.
Create The Right Agreement
Will you create a lease agreement or a rental agreement? If you don’t know the difference between the two, it’s important to do the research. The wording you include in your agreements will be paramount to the relationships you have with your tenants. You need to protect yourself by including all necessary legal terms, all of your rent expectations, information pertaining to damages, etc.
Once you have put together your agreement and set your expectations straight, you can start thinking about your perfect tenant. It may be more time consuming, but putting the time into screening each interested person will pay off in the long run. Of course, you can’t always predict how a tenant will be two months, six months, fourteen months down the line, but you can get a good feel for whether or not they align with your standards.