When you’re ready to step into the real estate world, you might become a landlord. Owning a home that you rent out can be stressful. However, with the right tips, you can enjoy becoming a landlord for the first time.
Before you start on your journey to become a landlord, there are a few things to understand. Let’s look at the best tips for becoming a landlord as a beginner.
Top 5 Tips for Beginning Landlords
1. Understand Landlord-Tenant Laws
Before you go any further on this list of tips for landlord beginners, make sure you learn the landlord-tenant laws. There are three levels of the laws you need to learn:
- Federal laws – These laws will cover discrimination. Make sure you understand the Civil Rights Act and the Fair Housing Act.
- State laws – These laws will likely have more to do with housing standards, evictions, security deposits, and repairs.
- Local Laws – These laws may govern things, such as essential services.
Make sure you understand these laws if you want to become a landlord.
2. See your Rentals as a Business
You have to have a business mindset when it comes to your rental properties. As a beginning landlord, you must treat it like a business. If you don’t, you might make emotional decisions that hurt your profits and your business.
3. Know the Full Cost of Your Rental Property
As a new landlord, you have to go beyond the monthly mortgage payments. You should go further than this and look at the cost of insurance, repairs, maintenance, property management, and more. Make sure you know what it will cost to run your rental properties before you decide to become a landlord.
4. Always Screen Tenants
You want to always do your due diligence with tenants. Use a specific process that includes a credit check, background check, and references. You should also interview any potential renters before you choose the right tenants for your property.
Without a proper screening process, you might struggle to keep good tenants. You could rent to someone that was not telling the truth or doesn’t pay rent on time. This can become a hassle and an annoyance.
5. Hire a Property Management Company
If you plan to manage more than one property, you may want a property management company. This can help make it super easy to become a landlord as a beginner. You won’t even have to do the work. Instead, you can let your property manager take care of everything.
There are plenty of things to learn when you’re a new landlord. You want to make sure you understand the landlord-tenant laws, whether you hire a property management company or go at it alone. Understanding these laws is one of the most important things you can do when you become a landlord for the first time.
Of course, hiring a property management company can help make it much easier. There are many benefits to using a property manager, especially as a beginning landlord.