Owning property and renting it out to tenants can be a tremendously profitable venture for those who have a thorough understanding of the real estate field. That's why many are now considering using their additional cash flow to invest in property and becoming a landlord themselves. Before you take on this challenges job, it's important to understand the intricacies involved. Here are five keys to achieving success as a landlord:
1) Remember Your Tenants are Customers
Owning property is just like running any other business - you can't become successful without treating your customers with respect. And in this scenario, your tenants are your customers. You have to react immediately to your tenant's concerns and needs in order to ensure that the relationship remains strong and open at all times. In this regard, the little actions can go a long way.
Consider, for example checking in with your tenants every couple of months to ensure that everything is satisfactory with the property, and remember to send little gifts during the holidays. This will not only enhance your relationships with your current tenants, but increase your reputation with the industry, and provide you with further business opportunities in the future.
2) Get Everything in Writing
You have to protect your interests when it comes to your property. Legal issues can arise when there are problems such as a tenant not paying rent or causing damage to the property. Therefore, in order to protect yourself against future problems, it's imperative that you hire a real estate lawyer and have them draw up documents to provide to each new tenant before they move in. While the initial fee to hire the lawyer might be quite expensive, going through this process could help you thousands of dollars in the long run.
3) Stay Informed of all Legal Responsibilities
As a landlord you're now responsible for the safety of tenants while they're inside your property. This means that you must stay aware of your obligations to tenants in areas such as fire safety, building codes and health codes in your local area. If you're not fully up-to-speed with any recent changes that have taken place within the local real estate industry, ensure that you speak with a specialist who can help provide you with all the information you need to meet your key duties.
4) Always Ask for References from Tenants
If you're a new landlord, you might want to get started bringing in tenants as quickly as possible in order to begin creating income. However, without qualifying your tenants first you may find yourself stuck with a highly unreliable tenant who does not follow the rules of living in your property. Make sure you ask each new tenant for at least two references. Those acting as character references should not be related to the tenant, and they must have known the tenant for at least a year in order to ensure a verified opinion.
While the Money can be Superb, Prepare for Heavy Workloads
There is a tremendous amount of profit to be made from owning and renting out property. However, being a landlord involves more than simply sitting back and collecting rent checks. You must be actively involved in your job in order to make your property a cash cow. Putting in maximum effort to learn the duties of the job will allow you to gain maximum rewards.