No matter if you already have a property that you would like to rent out to other people or are only thinking about purchasing something you could lease, it’s vital that you understand what being a landlord entails. Here are some important things to keep in mind if you want to be successful in this business venture.
Acquiring the right property
For starters, you need a property that can be leased. If you’re only now looking into what to buy, you want to consider the location, how many rooms it has, whether it’s a single unit home or part of a building or strata, and so on. Furthermore, you should also know that you shouldn’t go overboard when it comes to renovating and upgrading this property. It should have all the necessities and be pleasant-looking but investing too much might result in you not getting a good return on investment.
Remember that this is a business
Furthermore, seeing as how your ROI is important, it’s vital that you treat this as a business. After all, this will be a source of income for you. With that in mind, do some calculations and set a break-even point for yourself. If you see that renovating is not worth it, simply do some small updates and refresh the space a bit.
Familiarize yourself with your rights and obligations
Something you can do while still looking for the right property is learn more about various local and state laws that concern landlords. These are in place to protect both you and your tenants. In many countries all over the world like in Australia, you’re not allowed to go inside your tenant’s home unless you were invited. It seems normal that you want to check up on your property once in a while but you need to contact them and schedule a visit first. Moreover, bear in mind that you need to have smoke detectors installed, keep up with the maintenance of the property, and notify your tenants if you plan on making any modifications to the contract.
Look to experts for drafting your tenancy agreement
When writing the contract, you want to have a legal expert on your side. For example, you might be able to find samples online and see what a lease agreement should look like. Still, it’s a good idea to have a professional go over it and ensure you’ve covered all the bases.
Come up with a reasonable price
You also need to set a reasonable price for your rental property. There are several factors that play a role here, such as the size of the rental, its location, and its appearance. If you’ve included some state-of-the-art appliances and other amenities, you could make the asking price a bit higher but keep it realistic. If you ask for too much, you might not find any tenants, but if you lower it too much, you might not be making enough – so take everything into account. Moreover, remember to set clear expectations about when you expect the rent.
Vet the potential tenants
Having put up the ads that accurately describe your property and what you are looking for, you want to vet the people that have applied. You can check their credit report, criminal past, and perhaps even their social media. No matter if your gut is telling you they seem nice, you still want to do your due diligence.
Turn to property managers to maintain it
While taking proper care of your rental is essential, sometimes you just don’t have enough time to deal with it, especially if you have several properties. In that case, you want to turn to professionals. For instance, if your property is in Sydney, you can rely on experts for strata management in Northern Beaches and rest assured everything from emergency repairs to regular maintenance is handled in the right way.
Be good to your tenants
Finally, when it comes to being a landlord, you should also be good to your tenants. Even though you’re not friends and this is still business, you still want to check up on them on occasion. Do it even if they’re regular with their payments. See if they’re having any issues and whether they need help with something. If they’ve had an emergency and couldn’t pay on time, you can be lenient a few times before you consider taking further action. Plus, by being nice to them, they’re more likely to take good care of your rental.
Being a landlord is not always easy, which is why you should be prepared before going down this path. Keep these tips in mind for a successful venture.