Running any business requires hard work and smart investments, and renting to tenants is no exception. As well as providing a property, a good landlord should maintain the property and make sure that they’re up to date on the local laws and regulations.
However, the rental market is booming right now. In 2019, around 36% of US households rent their homes. This means that potential landlords have plenty of opportunities to find tenants and establish a successful business. Here are some tips to help.
1. Find a Good Property
Buying any property is an investment. Many landlords buy the cheapest property that they can find, which can cause more problems and cost more money later down the road. A landlord has to maintain their property and keep it livable, which is far more difficult if the property is already in a poor condition.
Another option is to build a property. This allows you to create a property that’s perfect for your purposes, and as a new build, it won’t have the wear and tear of an older building. Check out Rockford construction projects for some great examples of what you can build.
2. Treat Landlording Like a Business
One common mistake that some landlords make is that they don’t take it seriously and focus on managing their properties. However, landlording is a business and you should treat it as such. Create a business plan and stick to it. Keep an eye on your finances and focus on improving your business. Organization is key.
Many landlords delegate the day-to-day property management to a professional, and this is a great option if you own a few properties or if you are simply too busy to manage the building yourself. In any case, you should build a solid foundation for your business before you sign your first lease.
3. Handling Tenants and Problems
Not all tenants are equal. Pre-screen potential tenants and choose carefully, as your investment will be in their care. Don’t discriminate against tenants, but don’t be afraid to set minimum qualifications with regard to rental history, income stability, and other factors.
Unfortunately, problems may arise. In this case, you should deal with the issue as soon as possible. This applies to any issue, from property damage or maintenance issues to problems with the tenants themselves.
These situations are normal for a landlord, so be prepared to deal with them swiftly and efficiently. Know your rights and the rights of your tenants. While, ideally, your tenants will always pay on time and cause no problems, things crop up. Keep the lines of communication open, but you may have to be ready to evict.
4. Choosing to Sell
As you might have guessed, being a landlord is a rewarding profession but it can be difficult. The upside is that you can always sell your property and move on with other projects. You can often make back the money from your initial purchase, or if you’d prefer, move into the property yourself. The trick is knowing when it’s the right time to sell.