Tips for First Time Rental Property Owners
Rental property has been a consistently good investment choice for many people looking for steady passive income streams. A recent survey shows that 6 out of 10 landlords declare that it is more viable and profitable and to own rental property now than less than six years ago.
While rental property can provide a lucrative return on investment, care needs to be taken by rental property owners to ensure things don’t go awry. Here are some of the things that landlords should consider to make a return on investment.
Make Prudent and Profitable Investment Choices
The first and foremost consideration is in making a sound investment.
A standalone unit will attract tenants who will occupy the property over an extended period will require intensive maintenance. Multiple units, though more efficient to manage, will attract residents staying for a shorter period.
Exploit Extra Income StreamsWhile rental income is the primary form of return, do not forget to look at other ways that your rental property can earn extra money. Is there an extra room that is unused and can be rented out as storage space? Is there room on the property to host a billboard or a cell tower which will earn monthly fees from others? Seek to gain maximum return from your rental property.
Learn All Legal and Tax Requirements
Consult a lawyer specializing in property leasing to know all your rights and obligations as a landlord and the rights and duties of the tenants. Find out about the relevant housing laws that are binding in your area and what the implications are for you as a landlord.
Automate Property Management
Collecting your rent more efficiently will help cut on costs and provide convenience. Manually collecting cheques from the mail takes up a lot of time and also poses a degree of uncertainty on efficient rent collection. automating these processes through the use of modern software or outsourcing to traditional property managers takes the strain off your hands while providing you with convenience and efficiency.
Vet Potential Tenants
Ask anyone applying for a tenancy to provide their credit reports. Check public databases for any outstanding legal issues brought against them whether past or present.
Have a set date when you will choose an occupant and then allow for multiple potential tenants to apply. You can offer slightly lower rent than the market rates to get more people to apply. A large number of applicants gives you better odds of spotting good tenants.
Document All Transactions
Record all transaction-related items with your tents. When accepting new residents, create a form with all their information on it. Such information can include emergency contacts, references, their contact information and their employer’s information. Put down the conditions of their tenancy and have them sign it.
Have an Emergency Fund
Tenants can fail to pay be late in paying rent or fall behind altogether. Unexpected and costly repairs may arise. To prevent paying out of pocket for such occurrences, set some money aside as an emergency fund to cushion you at such times.
Owning rental property can be a lucrative investment. Anyone venturing into it should take the proper precautions so as not to make a poor investment. With a little care and attention, you will be smiling all the way to the bank.