Whether you have been a landlord for some time or you are new to the role, it is important that you are always up to date with processes and procedures. If you don’t stay on top of things and aren’t in the loop when it comes to new rules and legislation, then being a landlord can be really hard work.
There is an ever-growing list of dos and don’ts when it comes to being a landlord, and by following these guidelines you can protect yourself, your tenants, and your extra income stream. So, we have put together our top tips for all landlords in 2021.
1. Prioritize Property Maintenance
First, if you want to be a good and successful landlord, you should always prioritize the maintenance of your property.
No matter how busy you are, or how much money repairs may cost, you should never let out substandard properties. Not only could this cause you more issues further down the line, but you may get a reputation as a bad landlord.
From ensuring that the facilities in the property are all in working order, to checking the interior walls of the property for things like mold, you need to ensure that your properties are in good condition when renting them out. Depending on the age of your building, you may find that more work needs doing.
We would especially recommend knowing how to remove mold inside a commercial building, otherwise, you could be putting your tenant’s health and wellbeing at risk.
2. Stay on Top of Tenant Checks
Even if you are in a rush to get a tenant into one of your properties so that you can start making money, you should never skip parts of the process.
For example, all tenants require checks, as this ensures that they are responsible and reliable tenants. Tenant screening checks often include credit eligibility and references from previous landlords. You should always have these checks completed before tenants move into your property.
3. Get the Right Insurance
It is also crucial that you spend time looking for a good insurance policy so that you are covered for losses, such as damage, legal expenses, and loss of rent. You should remember that you will need to get the extra coverage that is needed as a landlord, as most standard building insurance policies do not cover your needs.
So, it is worth spending the time hunting for the right specialist landlord cover, so that you have peace of mind if anything were to go wrong. It may cost you more than a standard policy, but it could save you considerably in the long term.
4. Always Have a Tenancy Agreement
Tenancy agreements are not always a legal requirement when it comes to renting out properties, but no matter how well you know your new tenants, we would recommend always having a tenancy agreement in place. This is an agreement signed by both you and the tenants and ensures that both parties know exactly what is expected of them throughout the tenancy period.
The lease needs to include all the basic clauses, terms, and language based on the laws of the state. Preferably, have an experienced real estate attorney help you. The tenancy agreement has to include several items, like:
- Lawn maintenance – Who will be responsible for this? Is it a part of regular maintenance?
- Property alternations – This includes things like painting walls. Is it something that is allowed or not? Maybe approval is needed for a specific color.
- Parking – You have to include the areas that tenants can use to park and how many cars are allowed inside the parking area per tenant.
- Pet clause.
- Property use – When you rent residential properties, the unit needs to mainly be used for living purposes. It should not be for running businesses. Make sure you highlight what the property can be utilized for in the agreement.
- Subletting – Will this be allowed? Maybe it can be, with pre-approval.
5. Have A Strict Tenant Screening Process In Place
A very challenging part of the work you do as a landlord appears when you choose your tenants. This is a process that should never be underestimated.
When you manage to competitively price your rental and you keep it in the best possible condition, much interest will be shown from tenants. Your screening process needs to establish tenant requirements so that you can weed out all tenants who do not qualify due to low income, eviction history, and other vital factors for you.
All interested tenants should complete written rental applications. You need to confirm your rental history and then review your income.
As an example, most landlords will follow a simple rule: the tenant needs to have an income of at least three times how much rent is. This is why you need to run a background and credit check.
Keep in mind that if the screening process you use is not thorough, there is a high possibility you will end up with tenants who will be really problematic. This can only lead to issues.
6. Don’t Forget About Potential Extra Income Opportunities
There are numerous properties that will allow you to collect some additional rental income. As an example, it is possible to collect some extra rent besides what is included in the lease agreement for things like:
- Garage space.
- Storage sheds.
- Pets (the best example is the nonrefundable pet deposit but you can also opt for a monthly pet fee).
- Parking space (this is particularly effective as an extra income option when parking is considered to be a premium).
By staying on top of the legalities and maintenance that come with being a landlord, the process can be a lot less stressful, more straightforward, and easier for both you and your tenants.
As you can easily notice, it is not at all easy to be a landlord. Laws get more and more complicated and it is so easy to make mistakes that will turn out to be very costly. Take the powerful tips above into account and you will have a much higher chance of being successful.
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I am Adeyemi Adetilewa, a media consultant, entrepreneur, husband, and father. Founder and Editor-In-Chief of Ideas Plus Business Magazine, online business resources for entrepreneurs. I help brands share unique and impactful stories through the use of public relations, advertising, and online marketing. My work has been featured on the Huffington Post, Thrive Global, Addicted2Success, Hackernoon, The Good Men Project, and other publications.