Before Owning Rental Property You Must Know These Crucial Facts
Owning rental property can be highly rewarding if you know what it takes to become a successful landlord. Learn the important steps to manage your tenant and rental property with this landlord guide.
Step 1: Find New Tenants for Your Rental Property
After buying your rental property, the first crucial thing is to make sure it doesn't remain vacant. If you want to make money by owning rental property, you will need tenants for rental income.
Effective and common ways of finding new tenants include making use of "for rent" signs, advertising in the local newspaper and word of mouth recommendations. If you are willing to give up about 5 to 10% of your rent, you can also hire a licensed real estate agent to find your tenants.
Step 2: Interview and Pick Reliable, Rent-Paying Tenants
Recent studies have shown that choosing the right tenant can help you avoid up to 80% of your future headaches. There are 2 major steps in this landlord guide when it comes to picking your dream tenant: Credit checks and tenant interviews
When it comes to owning rental property, credit checks mean getting your hands on the credit report of potential tenants. The credit reports will give you a good idea of whether someone is willing and able to pay you the rent.
Tenant interviews are effective for choosing pleasant and cooperative people as your tenant. For the first round of interviews, you should screen your tenants on the telephone. For those short listed ones, you can meet them for face to face interviews and take the chance to show them around your rental property.
Step 3: Sign Your Rental Agreement and Collect Rent from Your Tenants
Now that you have found your perfect tenant, it's time to seal the deal with a written rental agreement. This is a very important landlord document so make sure that you read a good landlord guide on what needs to go into a proper and watertight rental agreement (such as type of tenancy, duration of stay and terms of your lease)
Collecting rent has to be one of the best part of owning rental property but you will have to know how to handle it correctly to enjoy regular rent payments. Make sure you and your tenant agree on a date and method of collecting rent. Most landlords accept their rent by cash, checks or Paypal.
Step 4: Keep Your Rental Property in Shape with Repairs
Owning rental property also means having to maintain in habitable condition according to your local housing safety and health standards. When it comes to property repairs, it's important to know whether the landlord or tenant is responsible for footing the repair bills.
If the rental property needs maintenance and repairs due to daily wear and tear, then it's your responsibility as a landlord to ensure that it is in a livable condition. However if the property damage is caused by your tenant due to neglect or abuse on his part, he will be the one forking out money for the repairs.
Step 5: End Your Rental Agreement Smoothly and Legally
How you can end your rental agreement depends largely on whether you have a periodic tenancy or a fixed term tenancy. With a periodic tenancy you will be allowed to end your tenancy by informing your tenants 30 to 60 days in advance. For a fixed term lease you can only end when it expires unless you have your tenant agrees to it.
Sometimes owning rental property means have to deal with nightmare tenants who don't pay you rent or breaks the terms of your rental agreement. Before you can file your eviction lawsuit, you have to give your tenant a written eviction notice giving him a last chance to clean up his mess.
Teo Zhenjie has been showing landlords how to manage their tenants and rental properties effectively on <A HREF="http://www.propertydo.com/">Propertydo Landlord Guides</A> - Visit his website at <A HREF="http://www.propertydo.com/">http://www.propertydo.com/</A> for step-by-step real estate guides, free resources and forms.
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