If you’ve been considering the idea of purchasing rental property, you may have heard how horrible the landlord title can be. Other landlords or investors may have said that your tenants will never pay rent on time; they’ll destroy your property; you’ll be on call 24/7. It’ll be a nightmare and you’ll never make money.
Well, there are certainly some horrible stories out there, but for the most part, being a landlord can be a very satisfying and profitable venture. Usually the problem isn’t being a landlord, it is a lack of planning, organization and follow through that causes the problems.
You can avoid the horror stories if you:
Know Your Market – Whether you rent section 8 properties or high end properties, it’s important to understand your market. What do tenants in your market expect? Figure it out and offer a little better than average.
For instance, if you want to rent middle class homes to middle class families, try not to have a “no pet” policy. Instead, charge a fee for the pet, plus rent for the pet. If you really want good families who will stick around you want families with pets.
Set Your Policies & Rules — Don’t just make up rules and regulations off the top of your head. Winging rules will cause many problems. Instead, have a standard lease that outlines all the policies, procedures, rules and regulations. Then, stick to it. It can be difficult sometimes to stick to your rules, but doing so will make your life easier.
Have Set Office Hours – It’s important that your tenants can find you for emergencies and for non-emergency reasons. Ensure that you offer a phone number for office hours and a phone number for emergencies. You can get numbers free from Google Voice as well as for a fee from Skype, or check with your phone company about different phone numbers.
Use Contractors – So that you don’t have to work 24/7 hire a contractor to handle repairs and after-hours emergency calls. You’ll be glad you did because these issues are the main reasons for dissatisfaction with being a landlord. You can find contractors by networking in your community or placing an advertisement on Craigslist.org. You just pay a contractor for work done, so it can be a true win-win.
Follow the Law – It’s important to know the laws about renting and being a landlord so that you don’t accidentally break them either within your lease or by your actions. Get the help of a trusted real estate lawyer to ensure that everything you do and say is above board and legal. Having an ironclad lease that doesn’t break any rules, locally, statewide or nationally is an imperative that you can’t ignore.
Being a landlord as an owner can be a challenging but profitable way to be involved in the world of real estate. You can start with just one house, or a duplex renting out just one side while living in the other. It’s up to you. As a real estate investor who is essentially letting other people pay the bills while building equity, what could be better or more lucrative?