Owning your first rental property is both exciting and intimidating. Being a new landlord entails a slew of challenges, triumphs, and unavoidable blunders. There are a lot of factors that come into play that essentially determine how successful you are as a landlord. First-time landlords are faced with the highs and lows of the business, and very few come out unscathed.
Rental properties can be a great way to make money. However, to be a successful first-time landlord, you must constantly learn and adapt. This article summarizes the most important tips and concepts you should know.
Understand Your Rights as a Landlord
The landlord, like the renter, has rights. Under the right conditions, you have the right to evict a tenant if they fail to keep their end of the bargain. You also have the right to enter your property for maintenance purposes with reasonable notice to the tenant.
Determine the Current Market Price
Before your rental is ready to be listed on the market, you should know the current market price for comparable properties based on location, square footage, and features like the number of bedrooms/bathrooms. Learn the going rates to stay on par with competitors and remain profitable. You want to maximize rental rates while keeping the unit off the market as long as humanly possible.
Understand Financial Concepts
Purchasing a property as an investment is a wise decision anyone can take without much knowledge of the financial system. However, becoming a landlord with financial holdings and knowledge is a significant step that makes the whole business a whole lot easier. Yes, the concepts and legalities can be overwhelming if you’re just starting, but they will surely prove themselves useful along the line. Concepts you should understand include:
- Valuation
- Book Keeping
- Cash flow
- Capital Gains Tax
- Project Management
- Screening your tenants
- Marketing ROI
Understand Privacy Laws
As a landlord, you will certainly have access to sensitive information about your tenants, such as their social security numbers, credit reports, salary, and employment history. You must put effort to ensure that you securely collect and store information about tenants and applicants and do not disclose any personal info to third parties without their permission.
Your Property Is a Business and Should Be Treated as One
It’s critical to maintain a professional demeanor with your tenants, keep your finances in order, and carry out the necessary tenant screening before the renter moves in. Your rental property will be a source of cash flow and should be paid attention to wholly.