Many people are thinking more and more about entering the landlord business. It is a tried and true way of earning recurring income. But where do you start? Keep the following in mind before you get your first tenant:
It's a business
Don't forget it! Thus, you will need to gather the resources to run said business. This typically includes book keeping, marketing, accounting, rent collection, taxes, and legal. All of these should be integrated into your business and are funded by your rent income.
Be Clear on Policies and Procedures
In addition to a lease agreement, you should have policies and procedures that cover your geographic and other specific concerns. These could include: pets, parking, loud music, smoking, landscaping, shared areas, guests, and utilities.
Enforce the lease terms
You have to perform and enforce the contract. If you do not enforce late fees then it will set a precedent. Bounced checks may have fees that will be in addition to the late fee. Both should be enforced. You may see other disruptions that will affect good tenants, such as noise, pets, and criminal activity and those provisions should be enforced.
Understand your security deposit
Move in forms need to be very specific. Tenants should go through and mark up the issues in the home beforehand just like they would a rental car.
Take photos of anything you will charge the tenant for. For example, cleaning fees, dry wall damage, and pet stains. This way you can fix the issues and get a new tenant. Notify the tenant in writing with details regarding the withholding of their deposit.
Criminal and credit background checks
The tenant will pay for the background checks so this should be a no-brainier.
Fix your rental
Quality renters come from quality landlords. Get a handyman on speed dial. If you stay available then the tenant will likely renew their lease. Generally, it is a bad idea to let a tenant do their own work.
Non-refundable deposits are really fees in practice and it might be more clear to list them as such. For example, a cleaning fee, pet fee, etc.
As always, speak to an attorney first before starting up your rental business.