When a person becomes a landlord and rents a property to tenants, they wish to have a good rental income. But landlords need to be aware of certain things before advertising the property to tenants.
The habits that first-time landlords form at the beginning help them to survive in the business. It also decides how much money, time, and frustration landlords spare throughout their careers.
To help you reach your financial goals faster and become an excellent landlord, we have highlighted certain do’s and don’ts. You can also hire a property manager or attorney to know landlord rules.
Do’s as First-Time Landlords
Knowing what new landlords must do can help you avoid many legal issues. Note down these tips for first time landlord to become successful in the rental property business.
#1 Screen Tenants
You need to screen tenants properly before leasing your rental property. When you screen the tenants, you get to learn a lot about them.
Basically, you need to know about your prospective tenant’s rental history, eviction, rent-paying habits, job history, and what other bills they pay. Plenty of free and paid tools are available for conducting proper tenant screening process.
Many landlords have a strict rule about not leasing their place to prospective tenants with recent late rent payments or eviction history. But some landlords look at every individual’s past record differently and give them a second chance.
It’s totally up to you; either be a strict landlord or be easy with your prospective tenants. But remember to follow the rules and conduct proper screening to get quality tenants.
#2 Know the Law of Rental Property and Hire Property Manager
New landlords must know the federal and state landlord tenant laws to prohibit housing discrimination. While denying renting a property, make sure your reasons are acceptable and justified.
For instance, you can deny renting your property to someone with an eviction history or a late rent-paying habit. But you cannot deny renting because they belong to a certain religion.
If you do this, fair housing laws allow tenant to file a discrimination lawsuit against you, which can cost you a lot of money. First-time property owner must avoid legal issues as it will poorly represent their renting business and take down your property value.
In addition, if you wish to evict a bad tenant, you must know the rules. Whether your tenant is not making rent payments or commits a lease agreement violation, follow the legal process to make them leave your rental property immediately.
Following the eviction process can get you reimbursed for your losses. Work with an experienced rental property manager or attorney to understand the correct eviction process.
#3 Stick to Your Promises and Policies
First-time landlords must always stick to the promises and policies they have made while renting their property.
Your renting policy should include the rent due date and the basic tenant rights. You can also mention any other things that are important to you.
#4 Safety Measures and Inspections of Rental Properties
Landlord’s first responsibility is the safety of their tenants. For this, they must perform regular investment property checkups to ensure everything is okay.
Every state has a list of safety measures the landlord must follow. For instance, landlords need to install functional smoke alarms for their tenants. Also, a carbon monoxide detector must be installed in rooms with a fuel-burning application.
Here’s what needs to be safe before you lease your rental property to the tenants:
- The infrastructure of the rental property (walls and roofs)
- Communal areas (staircase and hallways)
- Plumbing, ventilation, elevators, and HVAC systems
- Hot water heating systems
In addition, the rental property must be free from vermin and rodent infestations. Plus, it should not have molds, asbestos, and something similar. You can also get renters insurance.
#5 Respect Tenant’s Privacy
After screening tenants, you get a lot of information about your tenants. Make sure you don’t reveal it to anyone. If you ever want to release any information, get a signed release from your tenant, so you don’t get into any legal trouble.
Respecting your tenant’s privacy also means informing them prior to visiting the rental property. You may only enter the place unannounced in case of a true emergency, like tenants not paying rent on time.
When making the lease agreement, you can specify the reasons you might enter the rental property. In addition, you should establish a practical method to contact your tenants. You can preferably choose between a phone call or an email.
#6 Let Your Prospective Tenants Feel Comfortable
When you rent a place, tenants know they don’t own the rental property as they have to pay to live there. But they have the right to feel at home while staying at your rental property.
By allowing minor improvements like painting the walls or adding hardware for windows can make your tenants feel more comfortable. The more your tenants feel at home, the more they are likely to renew their lease.
You can get renters insurance. Remember that you are owning rental property, but it’s their home.
#7 Have a Rule on Keeping Pets
For many people, pets are like family members. So, if you entirely say no to pets, it might limit your tenant options, or it can lead to vacant units.
Instead, you can have a rule on keeping pets. For example, you can allow dogs but put a restriction on keeping certain breeds that are more likely to cause damage. Similarly, you can limit tenants to having one dog under 20 pounds.
Another option is to ask the tenants to pay a deposit for keeping pets. Or add a fee to the rent for those who wish to have pets. So, you can be pet-friendly, but don’t be too pet-friendly.
Don’ts as First-Time Landlords
There are a few things that first-time landlords must avoid. Here’s a complete list of don’ts.
#1 Don’t Rent to Family or Friends
Try not renting your place to friends or family because it might not end well. Your close friends and family members might want to pay less or expect an extension.
As you are renting the property to make a profit, it doesn’t really make sense to have tenants who are more likely to cost you money.
#2 Don’t Become Your Tenant’s Friend
As a landlord, you need to draw a line between being friendly and being friends with tenants. Being friendly will make your tenants respect you but try to treat each of your tenants with the same friendliness.
Try not becoming your tenant’s friend because tenants are likely to backfire. When you become friends, your tenants might expect favors from you, which you might not like. The friendship is not worth the financial loss.
#3 Don’t Own Property in Your Name
If you have multiple investment properties, do not own them all in your name. When your rental property is in the name of a corporation or LLC, you can claim that you don’t have the authority to make decisions.
While this won’t take the pressure of making a decision, tenants won’t blame you personally for things.
#4 Don’t Chase Security Deposit
Chasing security deposit and rent checks is the worst possible thing first-time landlords do. While screening the tenants, you need to understand whether or not they will pay the rent on time.
The best solution to not chase security deposits is to ask the tenants to pay deposits before you hand them the keys. Don’t become lenient about the security deposit and collecting rent because it can get you in trouble.
In addition, you can establish a functional system for collecting rent. It will save you from monthly chasing the tenants for money. Mention everything in the lease agreement before your tenant signs it.
Give more than one option to your tenants so they can easily pay rent on time. You can also have late fees, so you collect rent on time.
#5 Don’t Do Repairs
A landlord’s responsibility is to keep the building safe and livable. But if there’s damage, don’t repair it on your own, as you are not qualified.
You might feel repairing the damages is a cost-effective way to handle maintenance. But you would have to pay a huge amount if anything goes wrong. Call a professional, especially if the damage is related to plumbing or electricity.
Trying to repair damages on your own can not only be frustrating, but it can also be time-consuming. As a responsible landlord, you can ask professionals to inspect the rental property before you give it to tenants.
#6 Don’t Invest All of Your Time
If you do your landlord’s job right, you can expect a positive cash flow. But you cannot invest all of your time looking after your rental properties and tenants.
While taking time off, if you are worried that something wrong might happen, hire a property management firm. They will take care of your rental properties.
Also, if you have properly conducted screening and your tenants are following policies, you don’t have to remain available all the time.
Most tenants contact their landlords when they need repairs or while signing a new lease. Ask your tenants to email you non-emergency issues so you can have more time for yourself.
First-time landlords are bound to make mistakes. But it’s better to know the tips for first time landlords before renting your property to tenants. It will save you from making costly mistakes.
You can also consult an experienced property manager or attorney to know about the do’s and don’ts of a landlord in your area.