Landlord 101: First Steps to Becoming a Landlord
The lukewarm real estate market that has characterized our current decade has resulted in many homeowners becoming landlords, and many of them entered that particular role extremely unprepared. If you are considering renting out your home, there are five ways that you can pave your path to sustainable property stewardship.
Repairs and Updates
As a landlord, you’ll be responsible for keeping the property up to city or county code, so it’s best to get off on the right foot by taking care of any necessary upgrades before you list the home as available for rent. Many municipalities require home inspections of rentals prior to being put on the market, so be sure to hire a contractor who’s familiar with rental codes.
Creating an attractive ambiance may help you attract responsible tenants. Naturally, cleanliness is important, and freshly painted walls are the icing on an already tasty cake. Prospective tenants also appreciate well-kept outdoor living spaces, but it’s probably best to steer clear of fussy vegetation that requires significant upkeep. Also, make sure that none of your exiting landscaping plants are poisonous—this is more common than people think, and could pose problems if your tenants have children or pets.
Alert Your Mortgage Holder
You will need to contact your mortgage holder to alert them to the fact that you will be renting out the home rather than continuing to live in it yourself. You’ll also have to contact your city office to change your home’s status in order to comply with local ordinances.
Purchase Landlord Property Insurance
Your current homeowners insurance won’t cover your new role as a landlord, so you’ll have to get a policy specific to rental properties before handing over the keys. Your insurance agent should be able to assist you with this. Keep in mind that this type of policy will most likely be more expensive than regular homeowners insurance.
Consider Hiring a Property Management Firm
Most homeowners who evolve into landlords end up hiring professional property managers after discovering that being a landlord is much more complex than they had thought. Property management firms can take care of tenant screening procedures, maintenance, collecting rents and dealing with evictions should they become necessary. Even though this service costs money, you may be better off using one than trying to do everything yourself. When you factor in your time and effort, you may actually be coming out ahead financially.
Most of all, keep in mind that the day will come when you will want to put this property up for sale, so make certain that it’s being properly maintained whether you hire a property management company or do the work yourself.
Information Source: The Dhanji Team