A Guide To Becoming A Landlord

How to be a successful and good landlord and experience financial profit. Get the most from your investment in rental property by following these guidelines.

Real estate in the form of rental properties may be a good investment for you, if you know how to be a good landlord. But before you jump into the market there is some research to do. First, consider the demand for rental homes in your area. Secondly, go to your bank and check the availability of a loan, current interest rates, and probable payments. Add in an estimated amount for other expenses such as property taxes, insurance, home repairs. With this information you'll know how much you can spend on an investment property, and how much rent you'll need from it to turn a profit. Then, find out if it is feasible in your locale to expect this amount of rent. If the math works out, at least on paper, read on to see if being a landlord is for you.

Another scenario is that you already have a house: you've moved out of your home and it hasn't sold, or you don't want to sell it. At the same time you don't want the house sitting empty, so you're going to rent it out. Welcome to the world of landlords. You too should read on to learn how to be the best landlord possible.

Good landlords take pride in their rental property and establish good relationships with their tenants. You can become a successful landlord by following these three R's: reality, responsibility, and respect.

Be realistic and honest. Find out how much houses, similar to the one you are going to lease, are renting for in your area. Consider spaciousness, or lack of, number of rooms and sizes, condition, location, setting, quality, efficiency, and looks. Assess your home honestly. A three bedroom drafty ranch house that looks shabby won't bring the same rent as a three bedroom well-insulated ranch home that looks charming.

Find records of the cost of utilities for the past year. If you intend to pay the utilities, use this information to establish the amount of rent you will charge monthly. Otherwise, offer the would-be renters that same information to determine if they can afford those average monthly expenses. If you aren't forthcoming with this information you may find yourself with tenants who can't afford both rent and sky-high utilities.

Be realistic about this too: do you have the desire, ability, and/or means to take care of a second home? You may be fortunate to acquire good capable tenants, or you may not. Either way, it's not their house to maintain, it's yours. A tenant has no vested interest in your property. They just pay the rent and fulfill the agreements of the lease. Be aware that rent money is not free and clear even if the property is already paid for. You need a plan for setting aside a portion of it to cover income taxes, property taxes, and insurance, as well as home repairs and maintenance.



Learn your responsibilities. Drawing up a lease will make clear to your tenants what they can expect from you, and what you expect from them. This is for your protection as well as theirs. You can find lease templates on-line, visit a local real estate agency, or use a lawyer to help you write your lease. This document can be customized to suit your needs. Having a sample lease to follow will help you with details you may not think of on your own: who will be responsible for mowing the lawn and shoveling snow? Will you allow pets or no pets? Is smoking allowed in the home? Who pays for which utilities? Are appliances included? The lease will include details concerning rent, security deposit, dates of occupancy, damage reporting and repair, insurances, subletting, care of property, landlord inspections, and real estate taxes. The lease should also list rules and rights and clearly explain what happens if the tenant breaks agreements in the lease.

Another responsibility is to ensure that the premises are safe. A trip to your insurance agent's office will be helpful here. To get the best insurance policy coverage on your rental property the company will have guidelines for you to meet. A responsible landlord will follow these guidelines. Most of the guidelines are for safety sake: install smoke detectors that run on lithium batteries, have carbon monoxide detectors, keep a fire extinguisher in the kitchen, have an adequate number of exits, and put deadbolt locks on all outside doors. While you will carry insurance on the property, it is also a good idea to ask your tenants to carry renter's insurance, which is an insurance policy covering their own possessions.

A responsible landlord will ask for references from potential tenants. Then, check those references! If the applicants have rented living space in the past it will behoove you to call their previous landlords. Find out if they were responsible tenants; did they pay rent in a timely fashion, were they respectful of the rented home?

And that brings us to the final "R", respect. Your tenant is more likely to treat your leased home with respect if it is a respectable place. Keep your rental property in good repair; make it as attractive as possible. You should be proud to lay claim to being the landlord of such a house as this.

Finally, people are more important than things. Treat your tenants with respect and make every effort to build a good relationship with them. They've paid you the compliment of choosing your house to live in, complete with you as their landlord. You've checked their references and found them to be reputable people. You agreed to rent them your property. Now, give them as much autonomy as possible. Trust them to uphold their end of the lease, as they trust you to uphold yours.

A good return on your financial investment in a rental property can be expected if you are a realistic, responsible, and respectful landlord. If you can be that person, go for it. Get your ad in the paper, or put your "for rent" sign in the front yard, or start the grapevine if you're looking for tenants recommended by word of mouth. Don't delay; someone may be in the market for a rental home in your area today.

© High Speed Ventures 2011